Crypto mixer creator found guilty, lawyer to appeal verdict

The founder of Bitcoin Fog, a crypto mixer, was convicted in a Washington DC court on Tuesday. 

The crypto mixer was operated by Sterlingov for roughly 10 years and used as a money laundering service, according to a press release from the Department of Justice. The agency further alleged that Bitcoin Fog moved 1.3 million bitcoin over the course of its operation, which was valued at around $400 million at the time. It was allegedly used by the Silk Road and Agora, amongst others.

Roman Sterlingov was found guilty of conspiracy, sting money laundering and operating an unlicensed money-transmitting business. His sentencing hearing is set for July 15, according to a press release from the DOJ.

Read more: Coinbase, Blockchain Association challenge FinCEN’s proposed mixer crackdown 

“The bulk of that cryptocurrency came from darknet marketplaces and was tied to illegal narcotics, computer fraud and abuse activities, and identity theft,” the press release said.

Sterlingov’s attorney, Tor Ekeland, said that the team will appeal the verdict. 

“Evidence presented at trial clearly showed that the defendant laundered hundreds of millions of illicit funds from the dark web through Bitcoin Fog in an attempt to conceal the origin of those funds,” said IRS Criminal Investigation Chief Jim Lee.

Read more:  Bankman-Fried’s legal team argues for leniency, citing philanthropy and character 

Sterlingov, a Russian-Swedish dual citizen, was arrested in 2021 at a Los Angeles airport. He’s been detained since his arrest.

The DOJ, in the Tuesday press release, further claimed that Sterlingov made “millions in commissions from Bitcoin Fog transactions.”

Sterlingov’s verdict is the latest in a series of wins for the US government in crypto-related cases. The jury’s findings come just a few weeks before the co-founder of FTX, Sam Bankman-Fried, is set to appear before court for his sentencing. 

Bankman-Fried’s sentencing is formally set to take place on March 28. 

The former CEO was convicted following a month-long trial in New York City at the end of last year. He’s currently seeking a sentence of less than seven years. He could, however, face a maximum sentence of 110 years. 

---

Get the news in your inbox. Explore Blockworks newsletters:

• The Breakdown: Decoding crypto and the markets. Daily.
• 0xResearch: Alpha in your inbox. Think like an analyst.
• Empire: Crypto news and analysis to start your day.
• Forward Guidance: The intersection of crypto, macro and policy.
• The Drop: Apps, games, memes and more.
• Lightspeed: All things Solana.
• Supply Shock: Bitcoin, bitcoin, bitcoin.