Authorities recently sentenced the operator of a notorious cryptocurrency mixer on the Dark Web to 12.5 years in prison in the US.
The infamous crypto tumbler Bitcoin Fog was linked to laundering hundreds of millions, mainly for criminal enterprises.
A decade-long venture into crime
36-year-old Roman Sterlingov, who operated Bitcoin Fog from 2011 to 2021, also faces a financial penalty of over half a billion dollars.
During its run, the illicit service reportedly processed 1.2 million Bitcoin, worth approximately $400 million when it was eventually dismantled.
Sterlingov’s sentence not only keeps him imprisoned, but also orders him to forfeit much of his earnings. He must pay $395,563,025.39 in restitution, hand over $1.76 million in seized assets, and hand over control of Bitcoin Fog’s crypto wallet, which contains more than $100 million worth of Bitcoin.
Sterlingov’s sentence reduced to a quarter of the maximum term
Sterlingov was convicted in March, after which he faced a prison sentence of up to fifty years. According to prosecutors, the perpetrator obtained virtually all of his wealth illegally, directly from the criminal activities he enabled.
Bitcoin Fog worked as a crypto mixer, also known as a crypto tumbler. This service obfuscates crypto transactions by merging them into pooled funds before redistributing them to new addresses.
The thin line between privacy and crime
Criminals often use tumblers like Bitcoin Fog to cover their tracks, evading law enforcement by obscuring the origins of their illegally obtained funds.
According to testimony, the agency that Sterlingov operated facilitated a wide range of crimes, including cybercrime, child exploitation, drug trafficking and identity theft.
“Roman Sterlingov laundered more than $400 million in criminal proceeds through Bitcoin Fog, his cryptocurrency mixing service open to criminals looking to hide dirty money,” said Nicole M. Argentieri, the Justice Department’s principal deputy assistant attorney general. “Through his illegal money laundering operation, Sterlingov helped criminals launder the proceeds of drug trafficking, computer crime, identity theft and the sexual exploitation of children.”
Crypto landscape still favorite with cyber criminals
Unfortunately, the crypto landscape remains attractive to cybercriminals even as regulatory measures are continually implemented to curb its appeal.
Hackers continue to pull off high-profile heists, and ransomware groups still favor crypto payments for their trace-resistant properties. At the same time, scammers and fraudsters are becoming increasingly inventive and sophisticated crypto schemes to defraud victims of their digital assets.