The founder of crypto mixing service Bitcoin Fog, Roman Sterlingov, has been found guilty by a federal court of laundering money linked to illicit drug sales on the dark web. The jury deliberated for two days before reaching a verdict, holding Sterlingov responsible for obscuring the origins of crypto transactions and complicating efforts to trace the financial proceeds from criminal activities.
According to the prosecution, Bitcoin Fog played a significant role in masking over $400 million in transactions, with $78 million directly tied to notorious dark web marketplaces. Sterlingov, who holds dual Russian and Swiss citizenship, denied his involvement with Bitcoin Fog during the trial but now faces a maximum sentence of 20 years in prison on four charges of money laundering.
This conviction marks another significant victory in the United States’ efforts to combat cryptocurrency-related criminal activities, following the recent conviction of FTX’s co-founder and a settlement with Binance. Sterlingov, a 33-year-old Swedish-Russian national, had already spent nearly three years in detention before the verdict was reached.
The trial highlighted how investigators traced cryptocurrency transactions from dark web platforms through Bitcoin Fog and outlined a complex procedure allegedly employed by Sterlingov to register the Bitcoin Fog domain name over a decade ago. Despite admitting to using Bitcoin Fog, Sterlingov denied collecting any fees, contrary to the prosecution’s claims.
Sterlingov’s case underscores the growing concern over cryptocurrency’s role in money laundering, especially through services designed to anonymize transactions. A recent report by Chainalysis for 2024 revealed an alarming trend of increased laundering activities via crypto mixers, with transactions linked to sanctioned entities accounting for a significant portion of illicit transactions.
The latest case involving Sterlingov once again brings to light the challenges in regulating cryptocurrency transactions globally, particularly in light of the involvement of sanctioned entities and jurisdictions. As authorities continue to crack down on crypto-related crimes, the industry faces increased scrutiny and calls for stricter regulations to prevent money laundering and illicit activities.