The jury confirmed that the founder of the Bitcoin Fog crypto mixer was guilty of money laundering

The founder of Bitcoin Fog, a huge $ 400 million crypto-mixing service, was accused of counterfeiting money in the United States District Court on Tuesday March 12 – the last victory in the government's campaign against crypto mixers and founders.

Roman Sterlilov, 35, was found guilty of money laundering, money laundering conspiracy, operating an unauthorized money transmitter business and violating the DC Money Transfer Act.

Sterlilov, however, argued throughout the trial that he was the user of the service, not the operator. His lawyer, Tok Ekland, said in a March 12 post that his team would appeal the verdict.

According to evidence presented at trial, Sterlilov operated Bitcoin Fog between October 2011 and April 2021, which served as a money-laundering service for “criminals who wanted to hide their illegal funds from law enforcement.”

The service has moved more than 1.2 million bitcoins (BTC) over a decade — worth $400 million at the time of the transactions — from dark markets linked to drugs, computer fraud and identity theft, the government said. . Bitcoin Fog also served distributors of child sexual abuse material.

According to the information used to incriminate Sterlilov, the “majority” of the crypto deposited on his crypto exchange accounts came from “Bitcoin clusters” linked to Bitcoin Fog.

“The evidence presented at trial clearly showed that the defendant used the Bitcoin Fog scam to launder hundreds of millions of illegal funds from the dark web in order to hide the origin of those funds,” said Jim Lee, Chief of Criminal Investigations for the Internal Revenue Service (IRS).

Acting Assistant Attorney General for the Justice Department's Criminal Division, Nicole M. Argentieri also said the unit is “committed to investigating and prosecuting those who use technology to hide their crimes, no matter how sophisticated.”

JW Verret, an expert witness in the case, has promised to help Sterlilov's appeal. Verrett has argued that the forensics used to incriminate Sterlilov was flawed.

“The trial lasted for four weeks. I gave my testimony one day and worked on the case for a year,” said Veret.

“In the year The verdict on March 12 was ‘guilty'. When the four charges are read, say it four times. I felt like I had been punched in the stomach. The only way my mind can work is to focus on strategies that appeal.

The jury ordered the forfeiture of assets seized from the crypto mix, which included 1,354 BTC in the Bitcoin Fog Wallet and nearly $350,000 in cryptocurrencies held in various Kraken accounts.

The most serious charges – money laundering conspiracy and money laundering – each carry a maximum sentence of 20 years in prison, while the other two charges carry a maximum sentence of five years. Sentencing is set for July 15.

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Another crypto mixer founder is set to go on trial later this year.

In the year Roman Storm, the founder of controversial cryptocurrency exchange Tornado Cash, which was sanctioned in August 2022, is set to face criminal charges in September.

The co-founder of Tornado Cash faces three counts of conspiracy to commit money laundering, conspiracy to operate an unauthorized money-transmitting business and conspiracy to violate the International Emergency Economic Powers Act.

He has pleaded not guilty to all charges.

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