Crypto Privacy on Trial as Bitcoin Fog Founder Sentenced and Ordered to Forfeit Millions
A US federal judge has sentenced Roman Sterlingov, the founder of Bitcoin Fog, to 12.5 years in prison for money laundering linked to darknet markets, the Department of Justice announced.
Alongside his prison term, Sterlingov must forfeit $395 million and the funds in a Bitcoin Fog wallet valued at over $103 million. This decision has sparked significant debate within the crypto community, especially around issues of privacy and government oversight.
Privacy Advocates React to Bitcoin Fog Founder’s Sentence and ForfeitureThe prosecutors initially sought a 30-year sentence, arguing that Sterlingov perjured himself by denying involvement with Bitcoin Fog. However, Sterlingov maintained in court that he was merely a user and not the operator.
His attorney, Tor Ekeland, pointed out a lack of direct evidence. The lawyer argued that the authority lacked eyewitness accounts or platform logs to support their position of his control over the mixing service.
Despite the defense’s arguments, prosecutors alleged that Bitcoin Fog had facilitated hundreds of millions in untraceable transactions. Many of these transactions were reportedly connected to illicit activities on darknet marketplaces.
Records from the case suggest that from 2011 to 2021, Bitcoin Fog became a preferred service for individuals looking to obfuscate transactions linked to illegal operations, handling over 1.2 million Bitcoin — an amount valued at roughly $400 million at the time.
“Roman Sterlingov ran the longest-running bitcoin money laundering service on the darknet, and today he paid the price. In the deepest corners of the internet, he provided a home for criminals of all stripes, from drug traffickers to identity thieves, to store hundreds of millions of dollars in illicit proceeds,” said Deputy Attorney General Lisa Monaco
Nicole M. Argentieri, Principal Deputy Assistant Attorney General, also stated that Sterlingov’s actions allowed criminals to launder funds from a wide array of offenses, including drug trafficking, identity theft, and child exploitation. She emphasized that the Justice Department remains committed to holding those who enable criminal activity fully accountable.
The US government’s ongoing scrutiny of privacy-oriented protocols, including Tornado Cash, has raised questions among privacy advocates and industry insiders. Crypto commentator L0la L33tz voiced strong disapproval of the recent verdict. They assert that Sterlingov’s case is an unjust move in the government’s “war on financial privacy.”
“The government is now seizing the little Bitcoin he has left, while the Billions of Dollars he allegedly made operating Bitcoin Fog continue to remain unaccounted for. This entire case is a grave miscarriage of justice, and another stepping stone in the US Government’s war on financial privacy,” L33tz stated.
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