The founder of Bitcoin Fog, a $400 million mega-crypto mixing service, was found guilty of money laundering in U.S. District Court on Tuesday, March 12th. This is the latest victory in the government's crackdown on cryptocurrency mixers and their founders.
Roman Sterlingoff, 35, was found guilty of money laundering, money laundering conspiracy, operating an unauthorized money transfer business, and violating the D.C. Money Transfer Carrier Act.
However, Sterlingoff maintained throughout the trial that he was just a user of the service, not an operator.His lawyer Toku Ekeland Said In a March 12 post, X said his team would appeal the verdict.
According to evidence presented at trial, Sterlingoff operated Bitcoin Fog from October 2011 to April 2021, acting as a money launderer for “criminals seeking to hide illicit proceeds from law enforcement.” It functioned as a ring service.
The service has moved more than 1.2 million Bitcoin (BTC) in its 10 years of operation, worth $400 million at the time of the transaction, but the majority of the cryptocurrencies are linked to narcotics, computer fraud, and identity theft. The government announced that the virus had come from an online market. . Bitcoin Fog also served as a distributor of child sexual abuse material.
The evidence used to convict Sterlingoff was that the “vast majority” of the crypto deposited into his cryptocurrency exchange account came from a “Bitcoin cluster” associated with Bitcoinfog. I discovered that.
Jim Lee, director of criminal investigations at the Internal Revenue Service (IRS), said, “Evidence presented at trial shows that the defendants collected hundreds of millions of illicit funds from the dark web through Bitcoin Fog in an attempt to conceal the source of the funds.'' It clearly shows that it has been washed.”
Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department's Criminal Division said the department is “committed to exposing and prosecuting those who use technology to conceal their crimes, no matter how sophisticated their plans.” “
JW Verrett, an expert witness in the case, also promised to assist Sterlingoff in his appeal. Verrett has long argued that the on-chain forensics used to indict Starlingoff was flawed.
“The trial lasted four weeks. I testified for a full day and worked on this case for a year,” Verrett said, adding:
“The verdict handed down on March 12th was 'guilty'. They said that four times as the four counts of the indictment were read out. It felt like I had been punched in the stomach. The only way your brain can process it is by focusing on your appeal strategy.”
A jury has approved forfeiture of assets seized from a cryptocurrency mixer. This includes 1,354 BTC held in the Bitcoin Fog wallet and approximately $350,000 in various cryptocurrencies held in the seized Kraken account.
The most serious charges, money laundering conspiracy and money laundering baiting, each carry a maximum sentence of 20 years in prison, while the other two charges carry a maximum sentence of five years in prison. Sentencing is scheduled for July 15th.
Related: Over $300 million in stolen crypto assets to reach Bitcoin mixer in 2023
Another cryptocurrency mixer founder is also scheduled to go on trial later this year.
Roman Storm, co-founder of controversial cryptocurrency mixer Tornado Cash, who was sanctioned in August 2022, is scheduled to go on trial in September.
The Tornado Cash co-founder is charged with three counts: conspiracy to launder money, conspiracy to operate an unauthorized money transfer business, and conspiracy to violate the International Emergency Economic Powers Act.
He has pleaded not guilty to all charges.
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