Crypto News

In a recent development, the founder of “Bitcoin Fog,” a cryptocurrency-mixing service, was found guilty by a federal jury in Washington of helping to launder tens of millions of dollars from darknet markets notorious for illegal drug sales.

Multi-Million Dollar Crypto Money Laundering Case

According to a Bloomberg report, Roman Sterlingov, a 35-year-old Russian-Swiss national, was convicted by a jury on multiple counts, including conspiring to money launder, money laundering, and failing to register a money transmitting service. The prosecution argued that Bitcoin Fog facilitated over $400 million in untraceable transactions, with some funds originating from illicit markets.

The verdict not only marks another victory for the United States in its crackdown on crypto criminals but also sheds light on the role of Chainalysis, a Wall Street-backed firm utilized by the Justice Department and Treasury Department to trace cryptocurrency flows in money laundering cases. The defense raised concerns about the reliability of Chainalysis during the trial, questioning its methods and credibility.

During the month-long trial, prosecutors presented evidence showing how they tracked the flow of crypto from darknet markets through Bitcoin Fog, which they claimed Sterlingov operated. The government also relied on testimony from other crypto criminals, including Ilya Lichtenstein and Larry Harmon, who testified about using mixers for money laundering purposes.

Bitcoin Fog Founder Maintains Innocence Despite Conviction

Sterlingov, who has consistently denied running Bitcoin Fog, testified that he allegedly worked in information technology and helped clients create domain names during his employment at a marketing and web firm. 

Furthermore, Sterlingov claimed that he did not recall creating the Bitcoin Fog domain name or engaging in certain transactions referenced by the government.

Defense attorney Tor Ekeland also claimed that there was no concrete evidence linking Sterlingov to the operation of Bitcoin Fog, emphasizing a lack of eyewitness accounts or server logs. 

Ekeland also questioned the logic of using a secretive multi-step process to fund Bitcoin Fog when the initial transaction originated from an account registered in Sterlingov’s name. Sterlingov now faces a potential prison sentence of up to 20 years for the most serious charges. 

As of the latest update, Bitcoin, the largest cryptocurrency in the market, experienced a minor 2% correction, briefly dipping to $68,500 and temporarily falling below the significant $70,000 milestone. However, the cryptocurrency swiftly rebounded and is currently trading at $71,400 at the time of writing.

Despite this temporary correction, Bitcoin has still exhibited notable gains of 11%, 25%, and 48% over the past seven, fourteen, and thirty days, respectively. These substantial increases propelled BTC to achieve its recent all-time high (ATH) of $73,000, which was reached on Monday.

Featured image from Shutterstock, chart from TradingView.com