KEY POINTS
- Sterlingov was convicted of operating the "most prolific Bitcoin money laundering services" on the dark web
- His lawyer has said the prosecution's evidence to implicate Sterlingov as Bitcoin Fog's operator was lacking
- Infamous Bitfinex hacker Ilya Lichtenstein denied he communicated with or knew Sterlingov
The founder of Bitcoin Fog, a long-running cryptocurrency mixer, has been found guilty of money laundering, the U.S. Department of Justice (DOJ) announced Thursday.
"Roman Sterlingov, a citizen of Russia and Sweden, was found guilty today of operating among the longest-running and most prolific Bitcoin money laundering services on the darknet," the DOJ said in a statement.
U.S. Attorney Matthew Graves made the announcement Tuesday, saying Sterlingov was found guilty of the following crimes: money laundering conspiracy, operating an unlicensed money transmitting business, sting money laundering, and violations of the Washington, District of Columbia's Money Transmitters Act.
"Roman Sterlingov thought he could use the shadows of the internet to launder hundreds of millions of dollars in Bitcoin without getting caught. But he was wrong," Deputy Attorney General Lisa Monaco said of the crypto executive's conviction.
"Sterlingov managed a cryptocurrency mixer that criminals used to launder millions of dollars linked to cybercrimes, narcotics sales, and child exploitation. His conviction demonstrates the FBI's commitment" to collaborating with other agencies to disrupt the cybercriminal ecosystem, said FBI Assistant Director in Charge David Sunberg.
The jury ordered the crypto mixer to forfeit some digital assets that were previously seized, including some 1,345 Bitcoin worth approximately $96.8 million based on current prices. The said Bitcoin was held in a Bitcoin Fog wallet.
The crypto mixer was also ordered to forfeit other cryptocurrencies, including Ether (ETH) and Monero (XMR), worth over $349,000 that were seized from accounts on crypto exchange Kraken. The DOJ noted that a federal district judge will determine Sterlingov's sentence, who may face 50 years of jailtime.
Sterlingov was arrested in April 2021. In his testimony, Sterlingov reportedly denied that he operated the darknet service. He admitted to using Bitcoin Fog but denied that he collected fees from the service, which was established in 2011.
Tor Ekeland, Sterlingov's lawyer, told Bloomberg that the verdict was "disappointing." He also said during trial that there were no eyewitness accounts or server logs to point to Sterlingov as the operator of Bitcoin Fog.
Sterlingov's case took a significant turn and raised questions about the process through which he was identified by law enforcement as Bitcoin Fog's operator when infamous Bitfinex hacker Ilya Lichtenstein admitted that he used the service to obfuscate funds he pilfered from the Bitfinex compromise. However, Lichtenstein said it wasn't his main choice for laundering stolen funds and also denied he knew or communicated with Sterlingov.
Ekeland repeatedly reiterated during trial that the government's evidence against his client were lacking and Sterlingov's case raised concerns about the methods the DOJ employed in implicating and prosecuting individuals. He is expected to appeal the conviction.
