Roman Sterlingov, the 36-year-old operator of Bitcoin Fog, has been sentenced to 12 years and six months in federal prison for running what prosecutors described as the longest-operating money laundering service on the dark web.
The Russian-Swedish national, who operated the cryptocurrency mixing service from 2011 to 2021, has been ordered to pay an astronomical sum of $395,563,025.39 in restitution. Additionally, Sterlingov must forfeit approximately $1.76 million in seized assets and relinquish control of Bitcoin Fog’s wallet, which contains over $100 million in Bitcoin.
Massive Scale of Operations
During its decade-long operation, Bitcoin Fog processed an estimated 1.2 million Bitcoin, valued at roughly $400 million at the time of its shutdown. The service acted as a cryptocurrency mixer, a tool that pools and redistributes digital currencies to obscure their original source.
Principal Deputy Assistant Attorney General Nicole M. Argentieri emphasized the severity of Sterlingov’s crimes, stating that Bitcoin Fog was a crucial tool for criminals seeking to hide illicit proceeds. The service facilitated various criminal activities, including drug trafficking, computer crimes, identity theft, and the distribution of child sexual abuse material (CSAM).
Impact and Context
While Bitcoin Fog’s closure represents a significant victory for law enforcement, cryptocurrency mixing services remain prevalent in the criminal underworld. These services, while not inherently illegal, have become popular tools for criminals attempting to evade detection on blockchain networks.
Legitimate uses for mixing services exist, particularly in regions with oppressive government surveillance of financial transactions. However, their widespread abuse in criminal enterprises has led to increased scrutiny and enforcement actions against major operators like Sterlingov.
The sentence, reduced from a potential maximum of 50 years, serves as a stark warning to other cryptocurrency service operators who facilitate criminal activities. It also demonstrates law enforcement’s growing capability to unmask and prosecute sophisticated cryptocurrency-based money laundering operations.
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