Bitcoin Fog cryptomixer operator found guilty of laundering $400 million dollars

A US federal court has found Roman Sterling, a citizen of Russia and Sweden, guilty of operating the Bitcoin Fog cryptocurrency mixer from 2011 to 2021. During this period, the service processed 1.2 million bitcoins (approximately $400 million at the time of transactions).

Law enforcement officials report that Bitcoin Fog was one of the oldest cryptocurrency mixers on the darknet, used by cybercriminals from numerous shadow marketplaces to launder their illicit proceeds. The fact that over 1.2 million bitcoins passed through Bitcoin Fog in ten years, some of which were linked to various criminal activities, attests to its popularity among criminals.

Although this sum was approximately $400 million at the time of transactions, at the current rate, when bitcoin is once again breaking records, it would be equivalent to $87.5 billion.

The US Department of Justice states that most of this cryptocurrency came from darknet marketplaces and was linked to illegal activities such as drug trafficking, computer crimes, theft of personal data, and child sexual abuse.

Deputy Attorney General Lisa Monaco emphasized that a team of experts carefully studied blockchain transactions to identify and hold Sterling accountable, providing the court with over three terabytes of data related to the case. The investigation claims to have traced financial transactions from 2011, allegedly linking Sterling to payments made to register the domain. Investigators then used blockchain analysis to trace “test transactions” from Bitcoin Fog, purportedly made before the launch of the money laundering service.

It is worth noting that throughout the trial, Sterling maintained his innocence, accusing the US of using “junk science” and unreliable blockchain analysis methods to track bitcoins.

In an interview with Wired from prison in Northern Virginia, Sterling claimed that he did not create Bitcoin Fog, referring to the legal process as a “Kafkaesque nightmare.” He insisted that he was a simple Bitcoin Fog user, never operated the service, and did not use cryptocurrency for illegal activities.

Sterling’s lawyer, Tor Ekeland, stated that among the traces leading back to 2011, allegedly discovered by investigators and identified as the first deposits into Bitcoin Fog, there were many different addresses. He claimed that the only reason Sterling was implicated was that he was the only one who passed the Know Your Customer check at the time. According to Ekeland, witnesses confirmed that he either sold bitcoins or communicated with Bitcoin Fog’s founders, but this does not prove that he managed the service.

However, Sterling faces a maximum sentence of 20 years in prison for conspiracy to launder money, money laundering, and up to five years for operating an unlicensed money transmitting business. Sentencing is scheduled for July 2024, but the defense plans to appeal.

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