The founder of cryptocurrency mixing service Bitcoin Fog has been found guilty in federal court of money laundering related to illegal drug sales on the dark web.
On Tuesday, after nearly two days of deliberations, a jury found Roman Sterlingov responsible for concealing the origin of virtual currency transactions, thereby complicating efforts to trace the proceeds of criminal activity. Prosecutors claimed that Bitcoin Fog helped hide more than $400 million in transactions, $78 million of which was tied directly to notorious dark web markets.
Sterlingoff's belief This marks another significant victory in the United States' stepped-up efforts to combat cryptocurrency-related criminal activity. The series of legal actions also includes the high-profile conviction of FTX co-founder Sam Bankman Freed and the latest settlement with Binance. Mr. Sterlingov holds dual Russian and Swiss citizenship and refuted claims of his involvement in Bitcoin Fog during the trial.
Mr. Sterlingoff currently faces a maximum sentence of 20 years in prison on four counts of money laundering, and has already been in custody for nearly three years.
Throughout the trial, which lasted more than a month, prosecutors demonstrated how investigators tracked cryptocurrency transactions from dark web platforms through Bitcoin Fog. The lawsuit also outlined the complex steps Sterlingoff allegedly took to register the Bitcoin Fog domain name more than a decade ago.
Further evidence presented by prosecutors suggests that Sterlingoff made small trades from an account in his own name to test Bitcoin Fog's operations before its launch in 2011. Mr. Sterlingoff admitted to using Bitcoin Fog, but denied collecting fees, contrary to prosecutors' claims.
Virtual currency laundering is rampant
Mr. Sterlingoff's case highlights growing concerns about the role of cryptocurrencies in money laundering, particularly through services designed to anonymize transactions. His recent report for 2024 by Chainaosis highlights an alarming trend of increased laundering activity through cryptocurrency mixers.
The report highlights the dominant role of transactions related to sanctioned entities, accounting for 61.5% of all illegal transactions tracked, with an estimated value of 14.9 billion by 2023. Climb to the dollar. Many of these transactions involve virtual currency services that are subject to sanctions by the U.S. Treasury Department. Foreign Assets Control (OFAC) or those based in authorized jurisdictions.
Among the companies that contributed significantly to this amount was Russia-based exchange Garantex, which was sanctioned for laundering money for ransomware attackers and other cybercriminals. The latest lawsuits have once again highlighted the complex challenges of regulating virtual currency transactions globally.
