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Roman Sterlingov Found Guilty of Money Laundering: When Will Bitcoin Fog Founder Be Sentenced?

Last Updated March 13, 2024 11:36 AM
Shraddha Sharma
Last Updated March 13, 2024 11:36 AM
By Shraddha Sharma
Verified by Peter Henn

Key Takeaways

  • A Washington DC court has convicicted the founder of the Bitcoin Fog cryptocurrency mixing service.
  • Roman Sterlingov laundered money through darknet market sales.
  • Decade-long operations point towards the use of crypto mixers for illicit activities.

Roman Sterlingov, the mastermind behind crypto mixer Bitcoin Fog, is guilty of money laundering. Sterlingov was convicted of orchestrating a sophisticated money laundering operation by a Washington DC federal court

Sterlingov facilitated the laundering of millions of dollars, according  to the US Department of Justice. While the case sheds light on the implications of Sterlingov’s activities, it also brings the use of crypto mixers to the forefront.  

Conviction and Upcoming Sentencing

Roman Sterlingov, a dual Russian-Swedish citizen, was found guilty of multiple charges. These not only included money laundering conspiracy and sting money laundering, but also the charge of operating an unlicensed money-transmitting business.

Sterlingov’s conviction also includes violations of the DC Money Transmitters Act. The jury also ruled in favor of forfeiting Sterlingov’s assets. These include over 1,354 Bitcoin and various other cryptocurrencies, worth millions of dollars. Scheduled for July 15, 2024, Sterlingov could get 20 years in prison as a result of the money laundering charges alone.

Officials emphasized the work of agents, analysts, and prosecutors in tracing Bitcoin transactions through the blockchain to hold Sterlingov accountable. The case demonstrates the use of technology for criminal activities in cyberspace. It also sends a clear message that operations like Bitcoin Fog, which claim to offer anonymity for cryptocurrency transactions are on the list of clampdowns.

Operation of Bitcoin Fog

Bitcoin Fog emerged as a notorious cryptocurrency “mixer” or “tumbler”, helping criminals seeking to obscure their illegal proceeds launder money. From its inception in October 2011 until Sterlingov’s arrest in April 2021, the service processed over 1.2 million BTC. This corresponded to nearly $400 million at the time of transactions.

These funds predominantly originated from darknet marketplaces. These sites featured the sale of illegal narcotics, computer fraud, identity theft, as well as child sexual abuse material. By charging a fee for its services, Bitcoin Fog attracted the largest users from darknet markets. These include such notorious sites as Silk Road and AlphaBay.

Acting Assistant Attorney General Nicole M Argentieri of the Justice Department’s Criminal Division said: “As the jury’s guilty verdict shows, that belief was mistaken. The Criminal Division is committed to unmasking and prosecuting those who use technology to hide their crimes, no matter how sophisticated the scheme may be.”

Over the years, cybercriminals have transitioned their operations across various cryptocurrency mixers. There has been a shift from Tornado Cash to the likes of Sinbad and YoMix as a strategy to launder illicitly obtained digital assets.

Crypto Mixer Clampdown

Roman Sterlingov’s conviction is not the only attempt to dismantle the digital infrastructure supporting cybercrime. Indeed, the authorities are paying attention to crypto mixers which help transfer illegal proceeds anonymously.

Through the Bitcoin Fog mixer, Sterlingov enabled criminals to launder millions believing he could evade detection. However, international law enforcement agencies are tightening their grip on these cases.

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