Bitcoin Fog Founder Convicted of Money Laundering Challenges Potential 30-Year Sentence
Roman Sterlingov, the founder of the cryptocurrency mixing service Bitcoin Fog, is currently challenging a potential 30-year prison sentence after being convicted on money laundering charges in March 2024.
Background
In March 2024, Sterlingov was found guilty of four counts related to money laundering through the operations of Bitcoin Fog. Prosecutors claim that Sterlingov ran Bitcoin Fog from 2011 to 2021, enabling the laundering of approximately $400 million in Bitcoin associated with illegal activities.
- The U.S. government alleges that the service was used by criminals to conceal funds from law enforcement.
- Transactions on Bitcoin Fog were reportedly linked to drug trafficking, identity theft, and computer fraud.
Sterlingov’s Defense
On August 15, 2024, Sterlingov’s legal team submitted a memo to the United States District Court for the District of Columbia, contesting the government’s recommendation of a 20 to 30-year prison term.
- The defense argues that the proposed sentence is excessive and not in line with penalties seen in similar cases.
- They highlight that crucial evidence, such as the Bitcoin Fog server, logs, private keys, or ledger, was never presented in court.
Legal Battle
Judge Randolph Moss initially scheduled Sterlingov’s sentencing for August 21, 2024, but arguments surrounding the government’s forfeiture order will take place first.
- Assets potentially subject to seizure include 1,354 Bitcoin untouched since 2012 and a potential $395 million judgment.
Broader Implications
The case against Sterlingov reflects a broader trend of increased scrutiny on cryptocurrency mixing services by law enforcement.
- These platforms, aimed at enhancing privacy by mixing transactions, have attracted attention for possible use in money laundering schemes.
- Another developer linked to a similar service, Tornado Cash, is also facing legal issues.
Continued Activity
Despite legal challenges, some mixing services like Tornado Cash continue to see significant activity.
- Tornado Cash reported processing over $1.8 billion in deposits in the first half of 2024, a 45% increase from the previous year.
Closing Thoughts
Sterlingov’s defense maintains that much of the evidence against him is circumstantial and argues for a reduced sentence based on his personal history and commitment to family.
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