Table of Contents
- Roman Sterlingov, the founder of Bitcoin Fog, was convicted of money laundering in a United States District Court on March 12.
- Bitcoin Fog is a massive $400 million crypto-mixing service.
- Evidence presented during the trial revealed that Sterlingov operated Bitcoin Fog from October 2011 to April 2021, serving as a money laundering service for criminals.
In a landmark trial that has sent shockwaves through the cryptocurrency community, Roman Sterlingov, the founder of Bitcoin Fog, a massive $400 million crypto-mixing service, was convicted of money laundering in a United States District Court on March 12, 2024, Tuesday. This verdict marks a significant win in the government’s ongoing crackdown on crypto mixers and their founders.
Details of the Conviction
The trial lasted four weeks and saw Sterlingov facing charges of money laundering, money laundering conspiracy, operating an unlicensed money-transmitting business, and violations of the D.C. Money Transmitters Act. Despite his defense team arguing that he was only a user of the service and not its operator, the jury found him guilty on all counts.
Evidence presented during the trial revealed that Sterlingov operated Bitcoin Fog from October 2011 to April 2021, serving as a money laundering service for criminals seeking to hide their illicit proceeds from law enforcement. Over 1.2 million Bitcoin, worth $400 million at the time of the transactions, were moved thanks to the service. Reportedly, the majority of the cryptocurrency came from darknet marketplaces connected to drug trafficking, computer fraud, identity theft, and even the distribution of child sex abuse and pornography materials.
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“Evidence presented at trial clearly showed that the defendant laundered hundreds of millions of illicit funds from the dark web through Bitcoin Fog in an attempt to conceal the origin of those funds,” Jim Lee, Criminal Investigation Chief of the Internal Revenue Service (IRS), stated.
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division echoed this sentiment, emphasizing the department’s commitment to prosecuting those who use technology to hide their crimes, regardless of the sophistication of their schemes.
Sterlingov’s Party Planning an Appeal After Guilty Verdict
Despite the guilty verdict, Sterlingov’s attorney, Tok Ekeland, announced plans to appeal the decision. Additionally, J.W. Verret, a professional witness in the case, pledged support for Sterlingov’s appeal, citing concerns about the on-chain forensics used in the trial.
The jury also approved the seizure of assets taken from Bitcoin Fog, which included about $350,000 worth of different cryptocurrencies kept in a confiscated Kraken account and 1,354 BTC kept in a Bitcoin Fog wallet. The most serious allegations against Sterlingov carry a possible punishment of 20 years in jail apiece, and his sentencing is set for July 15, 2024.
As the legal landscape around cryptocurrency continues to evolve, Sterlingov’s trial serves as a crucial milestone in the government’s efforts to combat illicit activities facilitated by crypto-mixing services.
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