Founder of 'Crypto Mixer' Bitcoin Fog Sentenced to 12.5 Years for Laundering Over $400 Million in Crypto

12-Year Sentence for Crypto Mixer Founder in Major Money Laundering Case

Roman Sterlingov, the founder of Bitcoin Fog, a cryptocurrency mixer that operated for over a decade, has been sentenced to 12 years and six months in prison for his role in laundering vast sums of money linked to illegal activities.

Roman Sterlingov

His service, which operated from 2011 to 2021, was responsible for laundering over $400 million in illegal funds, much of it sourced from darknet markets involved in criminal activities such as drug trafficking, identity theft, and cybercrime.

Sterlingov’s actions have now caught up with him.

The 36-year-old Russian-Swiss national was found guilty earlier this year after a month-long jury trial.

A Decade-Long Operation Serving Cybercriminals

Bitcoin Fog provided a service that allowed users to mix cryptocurrency transactions, making it harder for authorities to track the movement of illicit funds.

The service operated for a full decade, helping criminals disguise the origin of their money, which often came from darknet markets dealing in illegal drugs, identity theft, and other crimes.

According to prosecutors, Sterlingov’s operation facilitated the laundering of criminal proceeds by obscuring the financial traces of transactions, particularly on platforms known for illegal activities.

As noted in court proceedings, the cryptocurrency mixer’s influence reached beyond just a handful of criminals. Bitcoin Fog processed transactions that had connections to significant illegal operations.

Principal Deputy Assistant Attorney General Nicole M. Argentieri stated,

“Roman Sterlingov laundered over $400 million in criminal proceeds through Bitcoin Fog, his cryptocurrency ‘mixing’ service that was open for business to criminals looking to hide dirty money. Today’s sentencing underscores the Justice Department’s commitment to holding those who facilitate criminal activity fully accountable for their crimes.”

Charges and Conviction

Sterlingov faced multiple charges, including money laundering conspiracy, money laundering, and operating an unlicensed money transmitting business.

He was convicted by a jury in March after a one-month trial.

During the trial, Sterlingov maintained that while he used Bitcoin Fog, he was not the person responsible for running it.

However, the jury found him guilty.

His prosecutors argued that there was no direct evidence to support the claim that Sterlingov operated the service, pointing out the absence of service logs or eyewitness accounts confirming his involvement.

The prosecution also pointed to the staggering scale of Sterlingov’s illegal activities, highlighting the scale of the operation and its longevity.

Christopher Brown, one of the prosecutors, said:

“This is criminal activity of a staggering scale over a prolonged period of time.”

Sterlingov’s lawyer, Tor Ekeland, however, maintained that there was no concrete proof that his client was directly responsible for running Bitcoin Fog, but the jury disagreed.

Judge Imposes Lighter Sentence Than Requested

US District Judge Randolph Moss handed down a sentence of 150 months (12.5 years), which was far shorter than the 30 years requested by the prosecution.

The government had argued that the severity of Sterlingov's crimes, particularly their scale and duration, warranted a harsh penalty.

However, Judge Moss expressed the view that a life sentence would be disproportionate, though he acknowledged the need for a significant deterrent, especially in the world of crypto crime, where authorities often struggle to track down offenders.

Sterlingov, who had been arrested in 2021, told the judge in court on Friday, expressing remorse for his involvement in the illegal activities tied to Bitcoin Fog.

"I am sorry for any harm that may have come from my actions. I’m fully committed to becoming a better person."

Forfeiture of Assets and Future Consequences

Alongside his prison sentence, Sterlingov was ordered to pay $395.5 million as part of a forfeiture money judgement and forfeit assets worth $1.76 million, including cryptocurrency and other monetary holdings.

Additionally, he was ordered to forfeit his interest in the Bitcoin Fog wallet, which contains approximately 1,345 BTC, valued at over $103 million.

These assets were seized as part of the investigation into his money-laundering activities.

The FBI’s Assistant Director in Charge, David Sundberg, made it clear that the sentence was a warning to others involved in cybercrime.

He said in a statement:

“The prosecution of Roman Sterlingov and the sentence imposed today should serve as a warning to cybercriminals. The FBI will not hesitate to use all tools at its disposal and will leverage our extensive partnerships to disrupt the cybercriminal ecosystem.”

Sterlingov's case serves as a significant milestone in the fight against cybercrime, particularly in the world of cryptocurrency, where transactions are often used to mask illicit activities.

The sentence and the forfeiture of his assets send a clear message that even those who operate behind the anonymity of the darknet are not immune from prosecution.