A US federal judge has sentenced Bitcoin Fog founder Roman Sterlingov to 12 and a half years in prison for money laundering related to darknet markets, the Justice Department announced.
In addition to his prison sentence, Mr. Sterlingoff must forfeit $395 million and more than $103 million worth of funds in his Bitcoin Fog wallet. This decision sparked a huge debate within the cryptocurrency community, especially regarding issues of privacy and government surveillance.
Privacy advocacy group reacts to Bitcoin Fog founder's verdict and confiscation
Prosecutors initially sought a 30-year prison sentence, arguing that Starlingoff had lied and denied any involvement in Bitcoin Fog. But Sterlingoff insisted in court that he was just a user, not an operator.
His lawyer Thor Ekeland pointed to the lack of direct evidence. Lawyers argued there was a lack of eyewitness testimony or platform logs to support the position that the authorities control the mixing service.
Despite the defense's claims, prosecutors argued that Bitcoin Fog facilitated hundreds of millions of untraceable transactions. Many of these transactions are reportedly related to illegal activities on darknet marketplaces.
According to the case records, from 2011 to 2021, Bitcoin Fog became the service of choice for individuals who wanted to obfuscate transactions related to illegal activity, and over 1.2 million Bitcoins (approximately $400 million worth at the time) were stolen. It is suggested that US dollar equivalent) was processed.
“Roman Sterlingoff ran the longest-running Bitcoin money laundering service on the darknet, and today he paid the price. In the deepest recesses of the internet, he ran the darknet's longest-running Bitcoin money laundering service. It provided a home for all kinds of criminals, from information thieves to hundreds of millions of dollars in illegal proceeds,” said Deputy Attorney General Lisa Monaco.
Assistant Attorney General Nicole M. Argentieri also said Sterlingoff's actions enabled criminals to launder money from a wide range of crimes, including drug trafficking, identity theft, and child exploitation. He emphasized that the Department of Justice remains committed to holding those who enable criminal acts fully accountable.
The U.S. government's continued scrutiny of privacy-oriented protocols, including Tornado Cash, has raised questions among privacy advocates and industry insiders. Cryptocurrency commentator L0la L33tz expressed strong disapproval of the recent ruling. They argue that Mr. Sterlingoff's lawsuit is an unfair move in the government's “war on economic privacy.”
“Although the government has now seized what little Bitcoin he has left, billions of dollars that he allegedly used to run Bitcoin Fog remain unaccounted for. This entire incident is grave. “This is a huge miscarriage of justice and another stepping stone in the U.S. government's war on economic privacy.” said.
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