The 35-year-old individual responsible for Bitcoin Fog, a cryptocurrency mixing service provider, has been found guilty for involvement in various money laundering incidents.
Bitcoin Fog, managed by Roman Sterlingov, a Russian-Swiss national, facilitated the obfuscation of cryptocurrency transaction origins. Sterlingov faced indictment in a Washington federal court for his role in a scheme aimed at laundering funds generated from illegal drug sales on darknet markets, resulting in significant financial losses for numerous crypto users.
While cryptocurrency mixers or tumblers like Bitcoin Fog have legitimate uses for traders seeking anonymity, they are often exploited by criminals to conceal the source of illicit funds. Government records indicate that Bitcoin Fog processed over $400 million in untraceable assets, a portion of which originated from unlawful activities. Despite initially denying his involvement with Bitcoin Fog, Sterlingov now faces a potential 20-year prison sentence following the government’s investigation.
Notably, Ilya Lichtenstein, infamous for the Bitfinex hack in 2016, utilized Bitcoin Fog to launder stolen Bitcoin. Unlike Sterlingov, Lichtenstein gained access to crypto exchanges through hacking and then used Bitcoin Fog to conceal the origin of the stolen funds before transferring them to various exchanges under false identities.
Sterlingov’s conviction underscores the United States government’s commitment to combating crypto-related crimes. This determination is evidenced by recent legal actions against prominent figures in the cryptocurrency industry, such as Sam Bankman-Fried and Ilya Lichtenstein. Even Changpeng Zhao, the former CEO of Binance, is currently facing legal proceedings, with restrictions on leaving the country until sentencing.
As the Bitcoin Fog founder awaits sentencing, the outcome of his case will depend on the applicable legal provisions and judicial decisions.