“Washington verdict for Bitcoin Fog operator: how legal cryptocurrency mixing services become criminal tools”

Roman Sterlingov Convicted for Operating Bitcoin Fog

Roman Sterlingov, a Russian-Swedish citizen, was recently convicted by a federal court in Washington for operating the Bitcoin Fog platform from 2011 to 2021. What made this case attract such widespread interest from law enforcement agencies worldwide?

Bitcoin Fog – One of the Longest-Running Cryptocurrency Tumblers on the Dark Web

Bitcoin Fog was one of the oldest and longest-running “tumbling” services for cryptocurrencies on the dark web. Such services, known as mixing services, are popular among cybercriminals for laundering money from illegal sources.

How Do Cryptocurrency Mixing Services Work?

Mixing services allow users to obscure the origin of their digital assets by sending them to a platform that then mixes them with other funds, making it difficult to trace their origin. Users receive an anonymous token of value after the cleansing process, minus a fee for the service.

Bitcoin Fog Laundered Around $400 Million

According to the U.S. Department of Justice, Bitcoin Fog laundered around $400 million, with a significant portion of these funds being linked to various crimes. The platform became popular among criminals, attracting substantial traffic on the dark web.

Sterlingov’s Arrest and Conviction

Deputy Attorney General Lisa Monaco emphasized that a special investigative team meticulously traced Bitcoin Fog transactions through the blockchain to identify and hold Sterlingov accountable. The accused now faces a potential sentence of up to 20 years in prison for conspiracy to launder dirty money and up to 5 years for operating an unlicensed money transmitting business.

Mixing Services Under Law Enforcement Scrutiny

Mixing services are always under the scrutiny of law enforcement agencies because they play a significant role in the money laundering process by cybercriminals. Recently, actions have also been taken against other platforms offering similar services, such as Tornado Cash, ChipMixer, or Blender.io, which aided ransomware groups and hackers in laundering proceeds from crypto thefts.

The entire case of Roman Sterlingov and his Bitcoin Fog platform serves as another example of the increasingly effective efforts of law enforcement in combatting illegal practices related to cryptocurrencies on the dark web.