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Crypto Founder Faces up to 20 Years in Prison for Money Laundering Charges

2 mins
Updated by Harsh Notariya
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In Brief

  • Roman Sterlingov faces up to 20 years for money laundering with Bitcoin Fog.
  • Sterlingov’s operation laundered $400 million; assets including 1,354 Bitcoin seized.
  • Bitcoin Fog's role in darknet markets such as Silk Road was highlighted in the trial.
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Roman Sterlingov, the founder of crypto mixer – Bitcoin Fog, faces up to 20 years in prison. A jury in the US District Court for the District of Columbia delivered this verdict, marking a significant moment in the fight against digital financial crimes.

US Attorney Matthew M. Graves, alongside a team of top officials, announced the conviction, underscoring the concerted effort of law enforcement agencies to tackle this complex case.

Crypto Mixer Founder Faces Money Laundering Charges

At 35, Sterlingov was found guilty of several charges. These include money laundering conspiracy and operating an unlicensed money-transmitting business. Furthermore, the court ordered the forfeiture of a substantial cache of assets.

These assets include over 1,354 Bitcoin and various other cryptocurrencies, highlighting the substantial financial implications of Sterlingov’s criminal activities.

Bitcoin Fog, the operation led by Sterlingov from October 2011 to April 2021, functioned as a “mixer” or “tumbler.” Essentially, it obscured the origins of illicitly obtained Bitcoin, making it a cornerstone in the digital underworld’s financial strategies.

Remarkably, the service processed transactions worth nearly $400 million, drawn from various illegal enterprises. This operation ceased only with Sterlingov’s arrest, illustrating the shadowy dance between cybercriminals and law enforcement.

“Darknet criminals should know by now that operations like Bitcoin Fog cannot provide the anonymity for cryptocurrency transactions that they claim they can. This conviction demonstrates that the United States can and will combat the use of technology to carry out crimes in cyberspace,” Graves said.

Read more: 4 Best Bitcoin Mixers and Tumblers in 2024

Sterlingov’s Bitcoin Fog catered primarily to darknet markets like Silk Road and AlphaBay. It offered a semblance of anonymity for Bitcoin transactions, a promise that attracted a vast user base among those markets.

This practice, however, was clearly illegal under US law. The trial exposed the mixer’s extensive involvement in laundering money from these illicit platforms.

Testimony from Ilya Lichtenstein, implicated in the Bitfinex hack, added a critical dimension to the case against Sterlingov. Lichtenstein’s insights into using Bitcoin Fog for concealing stolen funds underscored the interconnected nature of crypto laundering operations.

Read more: Top 7 Tornado Cash Alternatives in 2024

Furthermore, the case contributes to the broader discussion on cryptocurrencies and crime. Despite the focus on digital currencies, the US Treasury Department asserts that traditional cash remains the primary tool for money laundering among criminal networks.

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Harsh Notariya
Harsh Notariya is a journalist at BeInCrypto, who writes about various topics, including decentralized physical infrastructure networks (DePIN), tokenization, crypto airdrops, decentralized finance (DeFi), meme coins, and altcoins. Before joining BeInCrypto, he was a community consultant at Totality Corp, specializing in the metaverse and non-fungible tokens (NFTs). Additionally, Harsh was a blockchain content writer and researcher at Financial Funda, where he created educational reports on...