Bitcoin Fog Founder Convicted of Money Laundering

  • Roman Sterlingov, a dual Russian-Swiss citizen, was found guilty on Tuesday of four charges related to money laundering for his role in setting up the bitcoin mixing service Bitcoin Fog.

  • The most serious charge carries a maximum sentence of 20 years in prison.

The founder of Bitcoin Fog, a long-running cryptocurrency mixer, was convicted by a federal jury in Washington on Tuesday of facilitating the laundering of over 1.2 million bitcoins (BTC) – worth about $860 million at today’s prices – tied to darknet marketplaces.

Roman Sterlingov, 35, a dual Russian-Swiss citizen, was arrested at Los Angeles International Airport in April 2021 and charged with money laundering, operating an unlicensed money transmitting business, and money transmission without a license. Following his arrest, Sterlingov was also charged with conspiring to launder money.

During his custody and subsequent trial, Sterlingov and his lawyers denied that he ever operated or collected fees from Bitcoin Fog, though he admitted to using it. Jurors did not buy his proclamations of innocence – after a month-long trial, he was found guilty on all four counts.

Sterlingov is the latest person tied to crypto mixing services to face prison, as authorities in the U.S. and Europe continue to crack down on illicit crypto finance.

Two other crypto criminals, including Larry Harmon, the former CEO of bitcoin mixer Helix, and Ilya Lichtenstein, who, along with his wife Heather “Razzlekhan” Morgan, laundered $3.6 billion in bitcoins from the 2016 Bitfinex hack, testified against Sterlingov during his trial. Lichtenstein pleaded guilty last August and has not yet been sentenced while Harmon pleaded guilty in 2021, agreeing to forfeit over 4,400 bitcoins and pay a fine of $60 million.

The verdict against Sterlingov will likely come up in the trials against Tornado Cash developers Alexey Pertsev and Roman Storm, which are slated for this year in the Netherlands and the U.S., respectively.

Sterlingov’s sentencing date has been set for July 15. He faces up to 20 years in prison on the most serious charge.

Tor Ekeland, Sterlingov’s attorney, tweeted that they would appeal.

Edited by Nikhilesh De.