Bitcoin Fog Founder Roman Sterlingov Sentenced to 12.5 Years for Money Laundering; Ordered to Forfeit $395M

A federal judge in the U.S. has sentenced Roman Sterlingov, the founder of Bitcoin Fog, to 12.5 years in prison. This sentence is for money laundering linked to darknet markets, as announced by the Department of Justice.

Along with his prison time, Sterlingov must forfeit $395 million and the funds in a Bitcoin Fog wallet, which are worth over $103 million. This ruling has sparked a lot of discussion in the crypto community, especially regarding privacy and government oversight.

Initially, prosecutors wanted a 30-year sentence. They claimed Sterlingov lied when he denied being involved with Bitcoin Fog. However, Sterlingov insisted he was just a user, not the operator.

His attorney, Tor Ekeland, pointed out that there was a lack of direct evidence. The defense argued that the prosecution didn’t have eyewitness accounts or platform logs to prove Sterlingov’s control over the mixing service.

Despite these arguments, prosecutors alleged that Bitcoin Fog helped facilitate hundreds of millions in untraceable transactions. Many of these transactions were reportedly tied to illegal activities on darknet marketplaces.

Records from the case show that from 2011 to 2021, Bitcoin Fog became a go-to service for those wanting to hide transactions related to illegal operations. It handled over 1.2 million Bitcoin, valued at around $400 million at the time.

“Roman Sterlingov ran the longest-running bitcoin money laundering service on the darknet, and today he paid the price,” said Deputy Attorney General Lisa Monaco. “He provided a home for all kinds of criminals, from drug traffickers to identity thieves, allowing them to store hundreds of millions of dollars in illicit proceeds.”

Nicole M. Argentieri, Principal Deputy Assistant Attorney General, added that Sterlingov’s actions allowed criminals to launder money from various offenses, including drug trafficking and identity theft. She emphasized that the Justice Department is committed to holding accountable those who enable criminal activities.

The ongoing scrutiny by the U.S. government of privacy-focused protocols, like Tornado Cash, has raised questions among privacy advocates and industry insiders. Crypto commentator L0la L33tz expressed strong disapproval of the verdict. They argued that Sterlingov’s case is an unjust move in the government’s “war on financial privacy.”

“The government is now seizing the little Bitcoin he has left, while the billions he allegedly made from Bitcoin Fog remain unaccounted for. This entire case is a serious miscarriage of justice and another step in the U.S. government’s war on financial privacy,” L33tz stated.