The founder of a cryptocurrency mixing service, known as Bitcoin Fog, was convicted in federal court in Washington, where he laundered tens of millions of dollars from a black net market known for selling illegal drugs.
The jury concluded Tuesday that Roman Sterlingov, 35, provided a chaotic digital token that made it even more difficult to find a source of income from illegal activities. Prosecutors said the Bitcoin fog handled over $400 million (about Rs 33.75 crore) in untraceable transactions, including $78 million (about Rs 65.8 crore) involving the known DarkNet market.
The verdict is the latest U.S. victory over crypto criminals, including a November conviction against FTX co-founder Sam Bankman Fried. Sterlingov, a Russian-Swedish national who testified in his defense, denied that he had run through the Bitcoin fog, faced up to 20 years in prison on the worst charges. Stirlfriend, who has been detained for nearly three years, will be sentenced on July 15.
“The defendants built the entire operation to help criminals hide their assets,” Prosecutor Catherine Pelker said to jurors during the end of the debate. “The defendants built the entire operation to help criminals hide their assets.” Perker said from the evidence that Strinf was Setting up “useful” in Bitcoin fog.
After about two days of deliberation, jurors found Stringov guilty of all four charges, including conspiracy to launder money, money laundering and two charges related to running an unregistered currency transfer service.
“Darknet criminals should now know that operations like Bitcoin fog can’t be used to cryptocurrencies they claim to be able to provide,” U.S. Attorney Matthew M. Graves, U.S. Attorney for the District of Columbia, said in a statement. Transactions provide anonymity.”
Defense attorney Tor Ekeland called the verdict “disappointing” and said he would appeal.
“It’s just a halfway point,” Ekran said.
During the month-long trial, prosecutors showed jurors how the government tracks crypto streams from the Darknet market through the Bitcoin fog. They also highlighted a multi-step process, where they said Strinf had paid for the Bitcoin fog domain more than a decade ago.
The government also turned to two other crypto criminals to testify: Ilya Lichtenstein pleaded guilty last year, pleaded guilty to money laundering conspiracy, and Larry Harmon pleaded guilty to running a mixture called helix.
Lichtenstein, who was charged with the wife of the social media rapper, told jurors that some of his $4.5 billion (about Rs 37,977 crore) used Bitcoin fog to cryptocurrency have been stolen from Bitfinex . Both he and Harmon said they didn’t know Strinf.
Sterlingov testified that he worked in information technology and created domain names for clients while hiring and being a freelancer in marketing and networking companies. He said he didn’t remember whether he created the Bitcoin fog domain and suspected he did so. He also remembers certain deals, pointing out that they happened a long time ago.
The government said it found some small value deals that originated from an account registered under the name Sterlingov, which appears to have tested the Bitcoin fog before it was launched in 2011. Sterlingov said he is a user of Bitcoin Fog, but did not charge fees as fees. The government claims.
“There is no evidence anywhere that Mr. Strinf operates the Bitcoin fog,” Ekeland told jurors during the end of the argument.
Ekeland said the government did not find any references to bitcoin fog on Sterlingov’s electronic devices or notebooks. He also uses a secret multi-step process to question Stringff’s logic to fund Bitcoin fog when transactions are registered under Stringff’s name in an easy-to-track account.
The defense also questioned the reliability of Wall Street-backed corporate chain analysis, which the Department of Justice and Treasury have been using to help track cryptocurrency flows in cryptocurrencies.
The government said the company was reliable and the judge agreed. Prosecutors said they also used other methods to connect Stirlfriend to the operation of Bitcoin fog. Chainalysis has previously called its credibility attacks a “fundraising strategy” and has worked hard to help the crypto world escape accountability.
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