The founder of crypto mixer Bitcoin Fog was found guilty of money laundering
Roman Sterling has so far become the latest victim of a repressive campaign by the US government against illegal cryptocurrency mixing services, the so-called crypto mixers. However, his lawyers are by no means resigned to the verdict and are ready to fight to protect his rights.
The founder of Bitcoin Fog, a massive cryptocurrency mixing service valued at $400 million, was found guilty of money laundering in US District Court on Tuesday, March 12. This is the latest milestone in the government's efforts to combat crypto mixers and their creators.
The founder of Bitcoin Fog, a massive cryptocurrency mixing service valued at $400 million, was found guilty of money laundering in US District Court on Tuesday, March 12. This is the latest milestone in the government's efforts to combat crypto mixers and their creators.
Founder Roman Sterlingov, 35, was sentenced on charges of money laundering, conspiracy to launder money, operating an illegal money transmitter and violating the District of Columbia financial transactions laws.
However, throughout the entire process, Roman Sterlingov insisted that he was just a user of the service, and not its operator. In a March 12 statement, Sterlingov's lawyer, Tok Ekeland, said his team intends to appeal the verdict.
According to evidence presented at trial, Sterlingov actually operated Bitcoin Fog from October 2011 to April 2021, turning it into a money laundering service for “criminals wishing to hide their illicit proceeds from law enforcement.”
However, throughout the entire process, Roman Sterlingov insisted that he was just a user of the service, and not its operator. In a March 12 statement, Sterlingov's lawyer, Tok Ekeland, said his team intends to appeal the verdict.
According to evidence presented at trial, Sterlingov actually operated Bitcoin Fog from October 2011 to April 2021, turning it into a money laundering service for “criminals wishing to hide their illicit proceeds from law enforcement.”
Source: FBI Washington social media page X.
According to the government, Bitcoin Fog has processed more than 1.2 million Bitcoin transactions. Over a ten-year period, the value of all service operations is estimated at $400 million at the time of transactions. Most of the cryptocurrency was obtained from darknet markets related to drugs, crypto fraud and identity theft.
Evidence presented during Sterling's trial indicated that most of the cryptocurrency transferred into his cryptocurrency exchange accounts originated from "bitcoin clusters" associated with Bitcoin Fog. In such investigations, funds flow analysis services such as our Bholder solution are used.
“The evidence presented at trial clearly demonstrated that the defendant laundered hundreds of millions of dollars in illicit funds from the dark web through Bitcoin Fog in an attempt to conceal the origin of those funds,” said Jim Lee, director of criminal investigations for the Internal Revenue Service (IRS).
The jury ordered the forfeiture of assets seized from the crypto mixer, including 1,354 BTC stored in the Bitcoin Fog wallet, as well as almost $350,000 in various cryptocurrencies held in the seized Kraken account.
The most serious charges, conspiracy to commit money laundering and attempted money laundering, can carry a maximum penalty of 20 years in prison, while the other two charges carry a maximum penalty of five years in prison. The sentencing date is set for July 15.
Another crypto mixer founder will appear in court later this year
Roman Storm, one of the co-founders of the notorious cryptocurrency mixer Tornado Cash, which was sanctioned in August 2022, will appear in criminal court in September.
He faces three charges: conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business and conspiracy to violate the International Emergency Economic Powers Act.
Storm refuses to plead guilty to all charges.
He faces three charges: conspiracy to commit money laundering, conspiracy to operate an unlicensed money transmitting business and conspiracy to violate the International Emergency Economic Powers Act.
Storm refuses to plead guilty to all charges.
Opinion AML Crypto
We, value every user's right to privacy. Checking the wallet for risk and AML checking the counterparty's address are one of the few things that a user who wants to freely use anonymization tools should do. And, it would seem, such a “witch hunt” for representatives of crypto mixers could look like a threat to the principles of the cryptocurrency world.
But on the other hand, we must admit that such services are too often used by attackers to hide their tracks. This happens so often and in such volumes that regulators cannot ignore it. In this matter, the balance between compliance with blockchain principles and protecting users from criminals is important.
We hasten to remind you that aml wallet verification is available in our solution Btrace. Free first wallet risk check for every new user.
But on the other hand, we must admit that such services are too often used by attackers to hide their tracks. This happens so often and in such volumes that regulators cannot ignore it. In this matter, the balance between compliance with blockchain principles and protecting users from criminals is important.
We hasten to remind you that aml wallet verification is available in our solution Btrace. Free first wallet risk check for every new user.
Check blockchain address using Btrace
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