Roman Sterlingov, the creator of Bitcoin Fog, a significant cryptocurrency mixing platform, has been found guilty of money laundering by a United States District Court.
In the ruling delivered on Tuesday, Roman Sterlingov, aged 35, was convicted on various counts, which include money laundering, conspiracy to commit money laundering, running an unlicensed money transmitting business, and breaching the D.C. Money Transmitters Act.
Despite his claims during the trial, Sterlingov persisted in asserting that he was solely a user of the service and not its administrator.
Sterlingov Operated Bitcoin Fog till 2021
As per a press release from the US Department of Justice, the evidence disclosed during the trial illuminated that Roman Sterlingov, the founder of Bitcoin Fog, had overseen the operation of the business from October 2011 to April 2021. The service functioned as a conduit for criminals aiming to obscure their unlawful gains from law enforcement scrutiny.
Over the span of a decade, Bitcoin Fog facilitated the transfer of more than 1.2 million Bitcoin, valued at approximately $400 million during the transactions. The bulk of these funds were linked to underground online marketplaces involved in activities such as narcotics trading, cyber fraud, identity theft, and the dissemination of child sexual abuse material.
Jim Lee, Chief of the Internal Revenue Service (IRS) Criminal Investigation, remarked, “The evidence presented during the trial undeniably demonstrated that the defendant laundered hundreds of millions of illicit funds from the dark web through Bitcoin Fog in an attempt to obfuscate the source of those funds.”
Meanwhile, Sterlingov’s attorney, Tok Ekeland, has announced their intention to appeal the verdict.
The jury has decreed the forfeiture of assets confiscated from Bitcoin Fog, encompassing 1,354 BTC housed in a Bitcoin Fog wallet and almost $350,000 in assorted cryptocurrencies situated in a seized Kraken account.
The gravest offenses, namely money laundering conspiracy and money laundering, bear a maximum prison term of 20 years, while the remaining charges carry a maximum sentence of five years each.
Sterlingov’s sentencing is slated for July 15.
Tornado Cash Co-Founder Set to Face Trial
In a distinct legal matter, Roman Storm, co-founder of the contentious cryptocurrency mixer Tornado Cash, is scheduled to stand trial in September.
Storm is confronting allegations of conspiring to engage in money laundering, conspiring to operate an unlicensed money-transmitting business, and conspiring to breach the International Emergency Economic Powers Act.
Asserting his innocence, Storm has entered pleas of not guilty to all charges.
Having been indicted in August 2023, he is presently released on a $2 million bond. Storm has underscored the significance of this case for developers in the realm of Web3 and individuals vested in software and privacy concerns.
Supporters of Tornado Cash contend that it merely furnishes software for decentralized money transmission and does not directly participate in money transmission activities. Nevertheless, the crackdown on the platform has raised concerns among developers focusing on privacy-centric applications.
Reports indicate that the US Treasury has included Tornado Cash in its Specially Designated Nationals list, effectively prohibiting Americans from utilizing this mixer.
The Department alleged that the mixer “has been utilized to launder more than $7 billion worth of virtual currency since its inception in 2019.”
