Roman Sterlingov, the creator of Bitcoin Fog, a prominent cryptocurrency mixing service, has been found guilty of money laundering by a United States District Court.
On Tuesday, the verdict was rendered, convicting 35-year-old Roman Sterlingov on several counts, including money laundering, conspiracy to commit money laundering, running an unlicensed money transmission business, and infractions of the D.C. Money Transmitters Act.
Throughout the legal proceedings, Sterlingov consistently asserted that he was merely a user of the service and not its operator.
Sterlingov ran Bitcoin Fog until 2021.
According to a press release issued by the US Department of Justice, evidence presented during the trial revealed that Roman Sterlingov, the founder of Bitcoin Fog, operated the enterprise from October 2011 to April 2021. This operation provided a money laundering service catering to criminals seeking to obscure the origins of their illegal proceeds 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 at the time of the transactions. The majority of these transactions were linked to darknet marketplaces associated with activities such as drug trafficking, computer fraud, identity theft, and the dissemination of child sexual abuse material.
Jim Lee, Chief of the Internal Revenue Service (IRS) Criminal Investigation, remarked, “Evidence presented at trial clearly showed that the defendant laundered hundreds of millions of illicit funds from the dark web through Bitcoin Fog in an attempt to conceal the origin of those funds.”
In response to the verdict, Sterlingov’s attorney, Tok Ekeland, announced plans to appeal the decision.
Guilty verdict in U.S v. Sterlingov. Now we appeal.
— Tor Ekeland (@TorEkelandPLLC) March 12, 2024
The jury has ruled for the forfeiture of assets confiscated from Bitcoin Fog, comprising 1,354 BTC housed in a Bitcoin Fog wallet and nearly $350,000 in assorted cryptocurrencies held in a seized Kraken account.
The most severe charges, encompassing money laundering conspiracy and money laundering, are punishable by a maximum prison term of 20 years, while the remaining two charges carry a maximum sentence of five years each.
Sterlingov’s sentencing is slated for July 15th.
The co-founder of Tornado Cash is preparing to stand trial.
In an independent legal proceeding, Roman Storm, one of the co-founders of the contentious cryptocurrency mixer Tornado Cash, is slated to stand trial in September.
Storm is confronted with an array of charges, including conspiracy to commit money laundering, conspiracy to operate an unlicensed money-transmitting business, and conspiracy to violate the International Emergency Economic Powers Act.
Maintaining his innocence, Storm has entered pleas of not guilty for all charges levied against him.
Having been indicted in August 2023, Storm is currently released on a $2 million bond. He has emphasized the potential ramifications of his case for Web3 developers and individuals concerned about software and privacy.
Despite arguments from supporters of Tornado Cash asserting that the platform merely provides software for decentralized money transmission and does not directly engage in such activities, the crackdown on the platform has been perceived as a possible threat to developers working on privacy-focused applications.
Notably, the United States Treasury has placed Tornado Cash on its Specially Designated Nationals list, effectively prohibiting Americans from utilizing this mixer. The Department has alleged that the mixer has been implicated in the laundering of over $7 billion worth of virtual currency since its inception in 2019.
