Crypto Mixer Bitcoin Fog Founder Sentenced to 12.5 Years in Prison for Money Laundering
Highlights:
- Roman Sterlingov received a 12.5-year sentence for running the crypto mixer Bitcoin Fog.
- Bitcoin Fog laundered $400 million, aiding criminal activities like drug trafficking and identity theft.
- Sterlingov was ordered to forfeit $395 million, including Bitcoin assets and seized cryptocurrencies.
On Friday, U.S. District Judge Randolph Moss of the Washington federal court sentenced Roman Sterlingov, founder of the notorious cryptocurrency mixer “Bitcoin Fog,” to 12.5 years in prison, Bloomberg reported. The prosecution stated that Bitcoin Fog was an easy method for criminals to launder money earned from illegal activities, including drug trade on darknet markets.
Bitcoin Fog founder Roman Sterlingov was sentenced to 12 and a half years in prison for laundering tens of millions of dollars in illegal drug transactions. Sterlingov provided cryptocurrency mixing services through Bitcoin Fog. https://t.co/3AYN7O4t0y
— Wu Blockchain (@WuBlockchain) November 9, 2024
The sentence falls short of prosecutors’ earlier request for 20 to 30 years for the 36-year-old Russian-Swiss national. This followed Sterlingov’s March conviction on charges of money laundering, conspiracy to launder money, transmitting money without a license, and operating an unlicensed money-transmitting business. Sterlingov said during the sentencing hearing, “I am sorry for any harm that may have come from my actions.”
Bitcoin Fog Facilitated Criminal Transactions Worth $400 Million Over a Decade
Bitcoin Fog enabled users to “mix” digital assets, making it more difficult to track transactions. In a Nov. 8 statement, the United States Department of Justice (DOJ) said Sterlingov’s service operated for about ten years, facilitating untraceable transactions for large-scale money laundering.
The DOJ also asserted Bitcoin Fog became a platform for criminals to stash their illicit proceeds away from law enforcement. From 2011 to 2021, the service helped move over 1.2 million Bitcoin, worth about $400 million, mostly from illegal activities like drug trafficking, identity theft, and child exploitation.
DOJ noted:
“The bulk of this cryptocurrency came from darknet marketplaces and was tied to illegal narcotics, computer crimes, identity theft, and child sexual abuse material.”
Sterlingov Ordered to Forfeit Millions
In addition to the prison sentence, Sterlingov has been ordered to forfeit $395.56 million. This includes seized cryptocurrencies and assets worth around $1.76 million. He must also forfeit his interest in the Bitcoin Fog wallet, which contains 1,345 Bitcoin (worth $3 million).
Prosecutors sought a harsher sentence than 12.5 years, citing the scheme’s extensive duration and scale. However, Judge Moss said a life sentence would be excessive for this offense. He emphasized the need for a strong deterrent in the cryptocurrency sector due to the challenges of tracking funds.
Law Enforcement’s Efforts Bring Sterlingov to Justice in Bitcoin Fog Case
In a March DOJ report, Deputy Attorney General Lisa Monaco praised law enforcement for their hard work in tracking Bitcoin transactions on the blockchain. This effort led to holding Sterlingov accountable for his actions. “Roman Sterlingov thought he could use the shadows of the internet to launder hundreds of millions of dollars in bitcoin without getting caught. But he was wrong,” she said.
Moreover, FBI Deputy Director Paul Abbate emphasized the agency’s dedication to tracking down cybercriminals. He pointed out the teamwork between the FBI and international partners to bring Sterlingov and Bitcoin Fog to justice.
This follows the recent crackdown by the US government on crypto mixer founders. On November 1, Tornado Cash co-founder Roman Storm’s trial for money laundering and sanctions violations has been postponed until April 2025. Last year, prosecutors charged Storm and Semenov with money laundering, sanctions violations, and operating an unlicensed money-transmitting business.
A New York judge ruled on Friday that the criminal trial of Tornado Cash co-founder Roman Storm will be postponed to April 2025 to resolve disagreements disclosed by expert witnesses, and his hearing is scheduled for November 12. Storm is charged with three counts of facilitating…
— Wu Blockchain (@WuBlockchain) November 2, 2024
Syed Ali Haider
Syed Ali Haider is a contributing crypto writer for Crypto2Community. He is a crypto and blockchain journalist with over six years of experience. Syed Ali is a Blockchain enthusiast and writer passionate about enhancing the acceptance, adoption, and integration of Blockchain technology worldwide. He has also advocated for digital freedom and cybersecurity for many years. Haider has been featured in a number of high-profile crypto and finance outlets, including Coincult and more.
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