Key Takeaways
- Sterlingov has been found guilty of money laundering, money laundering conspiracy, operating an unlicensed money-transmitting business, and violations of the D.C. Money Transmitters Act.
- The government’s case emphasized Bitcoin Fog’s extensive involvement in laundering more than 1.2 million BTC, valued at $400 million during the transactions.
On Tuesday, March 12, Roman Sterlingov, the founder of Bitcoin Fog, a major crypto-mixing service, faced a United States District Court trial and was convicted of money laundering. ]
Throughout the trial, Sterlingov maintained that he was merely a user of Bitcoin Fog and not its operator. However, evidence presented during the proceedings contradicted this claim, revealing Sterlingov’s active role in operating the service from October 2011 to April 2021. Bitcoin Fog facilitated money laundering for criminals seeking to conceal their illicit proceeds from law enforcement.Â
After a month-long trial, jurors delivered guilty verdicts on all four counts brought against Sterlingov, which included money laundering, money laundering conspiracy, operating an unlicensed money-transmitting business, and violations of the D.C. Money Transmitters Act.
Sterlingov’s conviction is the latest development in a series of legal actions taken against individuals associated with crypto mixing services. Testimony from other prominent figures in the crypto space during Sterlingov’s trial, including Larry Harmon, the former CEO of bitcoin mixer Helix, and Ilya Lichtenstein, implicated Sterlingov further in illegal activities. Lichtenstein has already pleaded guilty and awaits sentencing, while Harmon pleaded guilty in 2021.
The government’s case emphasized Bitcoin Fog’s extensive involvement in laundering over 1.2 million Bitcoin, valued at $400 million during the transactions. A significant portion of the cryptocurrency originated from darknet marketplaces associated with illegal activities such as narcotics, computer fraud, identity theft, and the distribution of child sexual abuse material.
IRS Criminal Investigation Chief Jim Lee highlighted the significance of the case, stating that the evidence clearly demonstrated Sterlingov’s complicity in laundering hundreds of millions of illicit funds through Bitcoin Fog. Acting Assistant Attorney General Nicole M. Argentieri echoed these sentiments, underscoring the Justice Department’s commitment to prosecuting individuals who exploit technology to conceal their crimes.
In addition to Sterlingov’s conviction, the jury authorized the forfeiture of assets seized from Bitcoin Fog, including 1,354 BTC held in a Bitcoin Fog wallet and approximately $350,000 in various cryptocurrencies held in a seized Kraken account.
