(Bloomberg) — The founder of a cryptocurrency mixing service known as Bitcoin Fog has been sentenced to 12 and a half years in prison for laundering tens of millions of dollars from a darknet market selling illegal drugs.
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Roman Sterlingoff, 36, was sentenced Friday in Washington federal court by U.S. District Judge Randolph Moss to 150 months in prison and ordered to pay him $395 million and more than $103 million worth of BIT. He also ordered the confiscation of the Bitcoin Fog wallet containing the coins. Starlingov, a Russian-Swiss national, was found guilty by a jury in March of running what prosecutors described as one of the “largest and longest-running money laundering services.”
Sterlingoff offered a hodgepodge of digital tokens to make it more difficult to find a source of revenue from illegal activities. Prosecutors said Bitcoin Fog had been processing untraceable transactions for 10 years, including from known darknet markets. Sterlingoff was found guilty of conspiracy to commit money laundering, money laundering, and two charges related to operating an unregistered money transfer service.
“Roman Sterlingoff laundered more than $400 million in criminal proceeds through Bitcoin Fog, his cryptocurrency 'mixing' service that served criminals seeking to hide their dirty money.” said Nicole M. Argentieri, Principal Deputy Assistant Attorney General of the Justice Department's Criminal Division. the department said in a statement. “Today's sentence underscores the Department of Justice's determination to hold those who facilitate criminal conduct fully accountable for their crimes.”
In court Friday, Mr. Starlingoff expressed remorse. “I apologize for any harm caused by my actions,” he told the judge. “I am committed to becoming a better person.”
Moss imposed a significantly lighter prison sentence than the 30 years requested by the government and the maximum 50 years in U.S. sentencing guidelines. “A life sentence seems inconsistent with the level of crime,” but the punishment should be harsh enough to deter others, especially in the crypto world where it is difficult for authorities to catch criminals. said the judge.
“Amazing scale”
Prosecutors asked for a harsher sentence, citing the scale and duration of the scheme. Christopher Brown, the prosecutor in the case, said: “This is a criminal act of extraordinary scale over a long period of time.” The government also said he lied under oath during the trial when he denied making money from operating Bitcoin Fog and mixing services. Prosecutors wrote in their sentencing memo that the defendant's statements were “not consistent with the jury's verdict.”
