Bitcoin Fog Founder Sentenced to Over 12 Years for Money Laundering

Bitcoin Fog Founder Sentenced to Over 12 Years for Money Laundering

On Friday, Roman Sterlingov, the founder of cryptocurrency mixing service Bitcoin Fog, was sentenced to 150 months (over 12 years) in prison for operating one of the “largest and longest-running money laundering services.” Bitcoin Fog was accused of laundering over $400 million in criminal proceeds since its inception in 2011.

Cryptocurrency Mixers Under Legal Scrutiny

Cryptocurrency mixers, like Bitcoin Fog, allow users to deposit tokens into a shared pool where the crypto gets shuffled before being redistributed, making it difficult to trace the funds’ origins. While advocates argue that mixers help users maintain privacy, authorities view them as tools for enabling illicit activities, such as money laundering and operating unlicensed money transmitting services.

This case marks a significant turning point in the legal challenges facing cryptocurrency services, as law enforcement increasingly employs blockchain analysis to track crypto transactions. Prosecutors successfully connected Sterlingov to Bitcoin Fog through a trail of financial transactions dating back to 2011, including payments made to register the Bitcoinfog.com domain. Sterlingov had initially denied operating the service, claiming he was merely a user seeking privacy and suggesting that his involvement as a web designer in 2011 might have led to his mistaken association with the site.

Evidence and Sentencing

Despite a lack of direct service logs linking him to Bitcoin Fog’s operations, the prosecution presented substantial evidence tying Sterlingov to the service. This included IP addresses, phone numbers, and blockchain data, as well as a Russian-language document found in his Google account that described a payment obfuscation method similar to the one used for Bitcoin Fog. The jury found the evidence compelling enough to convict him beyond a reasonable doubt.

As part of the sentencing, Sterlingov was ordered to forfeit his interest in a Bitcoin wallet tied to Bitcoin Fog, containing over $103 million. During the trial, Sterlingov expressed remorse, saying, “I am sorry for any harm that may have come from my actions. I’m fully committed to becoming a better person.”

Wider Implications in the Crypto Industry

This case highlights the ongoing crackdown on cryptocurrency mixers, following a similar conviction of Tornado Cash’s co-founder, who received a 64-month prison sentence for laundering over $1.2 billion. These legal actions signal increasing scrutiny and regulatory pressure on crypto services that facilitate anonymous transactions.

News Source:Gizmodo,This article does not represent our position.

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