Prosecutors Seek 30 Years for Bitcoin Fog Crypto Mixing Service Operator
On Friday, August 2, 2024, federal prosecutors filed a sentencing memorandum recommending that Roman Sterlingov, the Bitcoin Fog crypto mixing service operator, receive 30 years in prison and a $100,000 fine. Sterlingov was convicted in March of money laundering conspiracy, money laundering, and operating an unlicensed money transmitting business by a D.C. jury.
In their submission, prosecutors said 30 years represents a downward departure from the guidelines recommended sentence of life in prison. They urged Judge Randolph D. Moss to consider the scope of Bitcoin Fog’s operations and Sterlingov’s role. The mixing service laundered “tens of millions” for darknet narcotics dealers and those involved in trafficking child abuse material, according to prosecutors, while Sterlingov “conceived, set up, owned, operated and profited from” Bitcoin Fog.
Crypto mixers like Bitcoin Fog combine transactions to obscure the path of funds and are legal privacy tools, but prosecutors argued Bitcoin Fog “catered to criminals” as its main attraction. It processed over $335 million before Sterlingov’s arrest, with many transactions linked to darknet marketplaces. Prosecutors said Bitcoin Fog was “in the business of laundering money.” The service charged 1-3% fees, which prosecutors claimed Sterlingov profited from despite denying involvement at trial. Evidence showed his testimony was false, warranting a severe sentence.
Prosecutors are also seeking enhancements based on the amount of money involved, Sterlingov’s apparent knowledge of illicit use, alleged perjury, and registering a false domain name. They found no mitigating factors in his background or conduct, arguing he turned down opportunities for legitimate work and showed no remorse.
If deterrence is needed, prosecutors said, it is because Bitcoin Fog was designed to obstruct law enforcement rather than be a “misunderstood privacy service” as Sterlingov claimed – signaling the risk he may reconstitute the service.
Sterlingov’s conviction comes amid increased government scrutiny of mixing services. The Treasury Department has sanctioned certain operations, and prosecutors have sued the founders of Tornado Cash in New York.
Sterlingov will be sentenced on August 21, where Judge Moss will consider the memorandum’s arguments for a 30-year prison term.
Please contact BlockTribune for access to a copy of this filing.
