Crypto Mixer Founder Convicted of Money Laundering in US, Forfeits Cash, Bitcoin, Ethereum, Monero and Stellar

Crypto Mixer Founder Convicted of Money Laundering in US, Forfeits Cash, Bitcoin, Ethereum, Monero and Stellar

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A federal jury in Washington has just convicted the Russian-Swedish operator of the crypto mixing service Bitcoin Fog.

In a statement, the Justice Department says Roman Sterlingov is found guilty of money laundering conspiracy, sting money laundering, operating an unlicensed money transmitting business and violations of the D.C. Money Transmitters Act.

The jury also greenlighted the US government’s forfeiture of related crypto assets including $349,625 worth of Bitcoin (BTC), Ethereum (ETH), Monero (XMR) and Stellar (XLM) held in Kraken accounts and 1,354 BTC held in a Bitcoin Fog wallet.

Evidence shows that Sterlingov operated Bitcoin Fog from October 2011 to April 2021. The jury found that over this period, the crypto mixer moved over 1.2 million BTC worth nearly $400 million at the time of the transactions.

The Justice Department says most of the funds came from darknet marketplaces, including Agora, Silk Road, Silk Road 2.0, Evolution and AlphaBay, and are linked to illegal narcotics, computer fraud and abuse activities and identity theft.

“At launch, Sterlingov publicized Bitcoin Fog as a tool for anonymizing Bitcoin transactions and evading law enforcement. His site charged customers a fee for the service. 

Based on Bitcoin Fog’s transaction activity over time, Sterlingov made millions in commissions from Bitcoin Fog transactions.”

Law enforcement authorities found Sterlingov’s ties to Bitcoin Fog after analyzing information obtained from several crypto exchanges. The records revealed that a vast majority of deposits in Sterlingov’s real-name accounts are linked to Bitcoin clusters associated with the crypto mixing service.

“While the identity of a BTC address owner is generally anonymous (unless the owner opts to make the information publicly available), the evidence at trial demonstrated that law enforcement can identify the owner of a particular Bitcoin address by analyzing the blockchain.”

Sterlingov has been detained since he was arrested at the Los Angeles International Airport on April 27, 2021.

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