Washington Court Sentence Bitcoin Fog Mixer Over $400 million Laundering

A federal jury sitting in Washington, D.C., found Roman Sterlingov, a Russian-Swedish nation, guilty of money laundering using Bitcoin fog. This was due to his role in the mixer from 2011 to 2021.

Bitcoin Fog, renowned as one of the longest-operating cryptocurrency “tumblers” on the dark web, served as a means for cybercriminals from various darknet marketplaces to launder their illegal proceeds.

These mixing services enable users to obscure the origin of their digital assets, facilitating their withdrawal into “fresh” wallets devoid of associations with illicit activities. This process makes it challenging for law enforcement agencies to track the funds.

Users deposit their coins into these platforms and receive an anonymous token dictating the withdrawal amounts, deducting a service fee. Afterwards, the service combines coins from multiple users, mixing them within a concealed pool before redistributing them, thus complicating efforts to trace them back to their source.

Nonetheless, as one of the darknet’s enduring mixers, Bitcoin Fog garnered popularity and significant traffic.

Bitcoin Fog Laundered $400 million

According to the U.S. Department of Justice (DoJ), Bitcoin Fog laundered approximately $400 million, with a significant portion linked to various criminal activities.

“The bulk of this cryptocurrency came from darknet marketplaces and was tied to illegal narcotics, computer crimes, identity theft, and child sexual abuse material,” stated the U.S. DoJ announcement.

Additionally, Deputy Attorney General Lisa Monaco underscored the efforts of a dedicated team in meticulously tracing Bitcoin transactions through the blockchain to identify and prosecute Sterlingov.

Sterlingov faces a maximum penalty of 20 years in prison for charges including money laundering conspiracy and sting money laundering, along with up to five years for operating an unlicensed money-transmitting business and conducting money transmission without a license in the District of Columbia.

However, mixing services consistently remain under scrutiny by law enforcement, given their critical role in the money laundering endeavours of cyber criminals.

Due to this, recent international law enforcement actions have targeted platforms such as Tornado Cash, ChipMixer, and Blender.io for aiding ransomware groups and North Korean hackers in laundering the proceeds of significant cryptocurrency heists.