Bitcoin Fog Founder Receives 12.5-Year Sentence for $400 Million Money Laundering Scheme

• Bitcoin Fog founder Sterlingov sentenced to 12.5 years, forfeits $395M for laundering $400M.
• Judge Moss stresses need for deterrence in crypto, where tracing funds remains challenging.
• Defense argues lack of direct evidence linking Sterlingov to daily Bitcoin Fog operations.

Roman Sterlingov, founder of the cryptocurrency mixing service Bitcoin Fog, has been sentenced to 12.5 years in prison by a U.S. federal court for his role in laundering over $400 million in digital assets over the past decade. 

The case, presided over by U.S. District Judge Randolph Moss, also mandates the forfeiture of $395 million in seized assets, including Sterlingov’s stake in a Bitcoin wallet valued at over $103 million.

Bitcoin Fog, a digital currency mixer, allowed users to combine or “mix” their digital assets, masking transaction trails and making it challenging for law enforcement to trace transactions back to their origin. 

Operating for nearly ten years, the platform became a preferred tool for those seeking to obscure financial dealings from authorities, according to court filings.

Prosecutors argued that Bitcoin Fog enabled users involved in illegal activities, such as narcotics transactions on darknet markets, to conduct untraceable transactions on a large scale.

Sterlingov, a Russian-Swiss national, was found guilty in March of multiple charges, including conspiring to launder money, operating an unregistered money-transmitting business, and money laundering.

The prosecution underscored that Bitcoin Fog was a substantial tool for criminal enterprises, citing the scale of operations and alleged long-standing service provided by Sterlingov, which involved millions of illicitly obtained funds.

Prosecutors had called for a 30-year sentence, arguing that Sterlingov’s actions warranted a harsh punishment given the extended period and extensive impact of his operations.

Assistant U.S. Attorney Christopher Brown labeled the case as “criminal activity of a staggering scale over a prolonged period,” noting that it required strong judicial action.

However, Judge Moss determined that a life sentence would be excessive. In imposing the 12.5-year term, he emphasized the importance of deterring similar operations within the cryptocurrency industry, where anonymous transactions can complicate efforts to trace funds. 

Moss highlighted the need for robust deterrence in the rapidly evolving crypto market, 

stressing that while technology evolves, oversight remains critical.

During sentencing, Sterlingov expressed regret for any harm that may have resulted from his actions.

His attorney, Tor Ekeland, argued for a lesser sentence, stating there was insufficient evidence linking Sterlingov directly to Bitcoin Fog’s daily operations. Ekeland noted a need for service logs or eyewitness accounts, placing Sterlingov in control of the platform.