Bitcoin Fog Founder Convicted for Money Laundering, Tornado Cash Co-founder's Trial Next
Summary:
Roman Sterlingov, founder of the $400 million crypto-mixing service Bitcoin Fog, was convicted of money laundering and related charges by a US District Court. Sterlingov, who operated Bitcoin Fog for nearly a decade, used it as a laundering hub for criminals. After a four-week trial, assets were seized from the crypto mixer, including Bitcoins and various other cryptocurrencies. Sterlingov's sentencing is set for July 15. Meanwhile, another crypto mixer founder, Roman Storm of Tornado Cash, is set to face trial later this year.
Roman Sterlingov, the man behind the $400 million cryptocurrency-mixing service, Bitcoin Fog, was convicted on charges of money laundering by a US District Court on March 12. This marks the latest accomplishment by the government in its pursuit of crypto mixer platforms and their creators. Sterlingov, aged 35, faced charges of money laundering, involvement in a money laundering conspiracy, running an unauthorized money transferring business, and breaching the D.C. Money Transmitters Act. Sterlingov's legal representative, Tok Ekeland confirmed on March 12 that they will challenge the court's decision.
Trial prosecutors presented that Sterlingov had run Bitcoin Fog for almost ten years from October 2011 till April 2021. The platform played the role of a money washing center for criminals hoping to shield unlawfully obtained money from detection by law enforcement agencies. The FBI Washington Field revealed that Bitcoin Fog had conducted transactions involving over 1.2 million Bitcoin (BTC), equivalent to $400 million at the time. Most of the cryptocurrency was sourced from darknet marketplaces connected to drug distribution, computer misconduct, and identity theft. Furthermore, Bitcoin Fog also catered to distributors of materials featuring child sexual abuse.
Evidence which played a decisive role in Sterlingov's conviction indicated that an overwhelming majority of crypto deposited in his crypto exchange accounts originated from Bitcoin Fog-associated "Bitcoin clusters". Jim Lee, Chief of the IRS Criminal Investigation, stated that the trial conclusively demonstrated how Sterlingov funneled hundreds of millions in illicit funds from the dark web through Bitcoin Fog to camouflage the original source. Nicole M. Argentieri, Acting Assistant Attorney General of the Justice Department’s Criminal Division, asserted the division's staunch resolve to unmask and prosecute those who leverage technology to conceal their illicit activities, regardless of how intricate their methods.
J.W. Verret, who testified in the case, has also vowed to assist Sterlingov in his appeal. He has persistently contested the reliability of the on-chain forensics employed to prosecute Sterlingov. After the verdict was announced on March 12, the jury confirmed the confiscation of assets seized from the crypto mixer, which comprised of 1,354 BTC residing in a Bitcoin Fog wallet and nearly $350,000 in assorted cryptos in a seized Kraken account. Money laundering conspiracy and money laundering sting, the most severe charges, each carry a maximum sentence of 20 years in prison. The remaining two charges each hold a maximum sentence of five years. Sterlingov's sentencing is scheduled for July 15.
Later this year, the founder of another crypto mixer, Tornado Cash, will also face trial. Roman Storm, a co-founder, is set to stand trial in September for three charges of conspiracy linked to money laundering, unauthorized money transmitting, and violation of the International Emergency Economic Powers Act. He has denied all raised charges.
Published At
3/13/2024 3:53:33 AM
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