Founder of Bitcoin Fog Receives 12-Year Sentence for Money Laundering Through Cryptocurrency

A 36-year-old man, who founded the Bitcoin Fog cryptocurrency mixer, has been handed a 12-year and six-month prison sentence for his role in facilitating money laundering between 2011 and 2021.

Roman Sterlingov, a dual Russian-Swedish national, admitted to charges of money laundering and running an unlicensed money-transmitting business earlier this March.

According to the U.S. Department of Justice (DoJ), Bitcoin Fog was the longest-running cryptocurrency mixer on the darknet, helping cybercriminals hide the origins of their cryptocurrency proceeds.

"Throughout its decade-long operation, Bitcoin Fog became notorious as the go-to money laundering service for criminals looking to hide their illicit earnings from law enforcement. It handled over 1.2 million bitcoin transactions, valued at around $400 million at the time," said the DoJ.

"The majority of this cryptocurrency came from darknet markets and was linked to illegal narcotics, computer crimes, identity theft, and child sexual abuse material."

In addition to his prison term, Sterlingov has been ordered to forfeit $395.56 million, as well as seized cryptocurrencies and assets valued at approximately $1.76 million. He's also required to forfeit his interest in the Bitcoin Fog wallet, which currently holds 1,345 bitcoin (worth about $103 million).

"Roman Sterlingov laundered over $400 million in criminal proceeds through Bitcoin Fog, his cryptocurrency 'mixing' service that catered to criminals looking to hide dirty money," said Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the DoJ's Criminal Division.

"Through his illegal money laundering operation, Sterlingov helped criminals launder proceeds from drug trafficking, computer crime, identity theft, and the sexual exploitation of children."

This development comes shortly after the DoJ sentenced a Nigerian national, Babatunde Francis Ayeni, to ten years in federal prison for his involvement in a massive cyber fraud scheme that affected over 400 victims in the U.S., resulting in losses of nearly $20 million.

Ayeni and his accomplices were part of a sophisticated business email compromise scheme targeting real estate transactions in the U.S. "Over 400 people across the country were victims of the scheme. Among them, 231 were unable to reverse the wire transactions in time and lost their entire transaction, totaling $19,599,969.46," said the DoJ.

Last week, the DoJ also sentenced Kolade Akinwale Ojelade, another Nigerian, to more than 26 years in prison for using phishing and spoofing attacks to deceive prospective homeowners and others out of down payments, causing losses of around $12 million.

"Ojelade sent phishing emails to real estate businesses, gained unauthorized access to many of their accounts, and monitored their email traffic to identify when large transactions were about to occur. He then intercepted wire payment instructions, altered the information, and resent the emails from spoofed addresses that mimicked the original senders," explained the DoJ.

Additionally, the Nigeria Police Force recently arrested 130 suspects, including 113 foreign nationals (mainly from China and Malaysia) and 17 Nigerian collaborators, for their alleged involvement in high-level cybercrimes, hacking, and activities threatening national security.

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