In a win for the U.S. government’s crackdown on illicit crypto-mixing services, Roman Sterlingov, the 35-year-old founder of Bitcoin Fog, was found guilty of money laundering and related charges in a United States District Court on Tuesday, March 12.
TLDR
- Roman Sterlingov, the 35-year-old founder of Bitcoin Fog, was found guilty of money laundering, money laundering conspiracy, operating an unlicensed money-transmitting business, and violations of the D.C. Money Transmitters Act.
- Bitcoin Fog, which operated from October 2011 to April 2021, moved over 1.2 million Bitcoin (worth $400 million at the time of the transactions) primarily from darknet marketplaces tied to illegal activities.
- Sterlingov’s defense team, led by Tok Ekeland, plans to appeal the verdict, arguing that the on-chain forensics used to accuse Sterlingov is flawed.
- The jury granted forfeiture of assets seized from Bitcoin Fog, including 1,354 BTC and nearly $350,000 in various cryptocurrencies.
- Sterlingov’s conviction is part of a larger crackdown on crypto mixers and their founders, with Tornado Cash co-founder Roman Storm set to face trial later this year.
The jury convicted Sterlingov, a Russian-Swiss citizen, on four counts: money laundering, money laundering conspiracy, operating an unlicensed money-transmitting business, and violations of the D.C. Money Transmitters Act.
Bitcoin Fog, which operated from October 2011 to April 2021, acted as a money laundering service for criminals seeking to conceal their illicit proceeds from law enforcement.
According to evidence presented at the trial, the service moved over 1.2 million Bitcoin, worth approximately $400 million at the time of the transactions, with the majority of the cryptocurrency originating from darknet marketplaces associated with narcotics, computer fraud, identity theft, and child sexual abuse material.
Bitcoin Fog Operator Convicted of Money Laundering Conspiracy https://t.co/R4KEElyZ9T@DOJCrimDiv @IRS_CI @USAO_DC pic.twitter.com/4SJpCfUGyQ
— FBI Washington Field (@FBIWFO) March 12, 2024
Throughout the trial, Sterlingov maintained that he was merely a user of the service and not its operator.
However, the government’s evidence showed that the vast majority of crypto deposited into Sterlingov’s exchange accounts came from Bitcoin clusters tied to Bitcoin Fog.
Despite the verdict, Sterlingov’s defense team, led by Tok Ekeland, has vowed to appeal the decision.
J.W. Verret, a professional witness in the case, has also pledged to assist with the appeal, arguing that the on-chain forensics used to accuse Sterlingov is flawed.
The jury granted forfeiture of assets seized from Bitcoin Fog, including 1,354 BTC held in a Bitcoin Fog wallet and nearly $350,000 in various cryptocurrencies held in a seized Kraken account.
Sterlingov faces a maximum sentence of 20 years in prison for the most serious charges, with sentencing set for July 15.
This conviction is part of a larger effort by U.S. authorities to crack down on crypto mixers and their founders.
Roman Storm, the co-founder of the controversial cryptocurrency mixer Tornado Cash, is set to face trial later this year on charges related to money laundering and operating an unlicensed money-transmitting business.
As the government continues to target illicit crypto-mixing services, the Sterlingov verdict sends a clear message that those involved in facilitating money laundering through these platforms will face serious consequences.
