In a recent development, the founder of ‘Bitcoin Fog’, a cryptocurrency mixing service, was found guilty by a federal jury in Washington of helping launder tens of millions of dollars from darknet markets infamous for illegal drug sales.
Multi-million dollar cryptocurrency money laundering case
According to a Bloomberg reportRoman Sterlingov, a 35-year-old Russian-Swiss citizen, was convicted by a jury on multiple counts, including conspiracy to commit money laundering, money laundering and failure to register a money transfer service. The prosecutor alleged that Bitcoin Fog facilitated more than $400 million in untraceable transactions, with some of the funds coming from illicit markets.
The verdict not only marks another victory for the United States in its crackdown on crypto criminals, but also sheds light on the role of Chainalysis, a Wall Street-backed company used by the Justice Department and Treasury Department to cryptocurrency flows in money laundering cases. The defense raised concerns about Chainalysis’ reliability during the trial, questioning its methods and credibility.
During the month-long trial, prosecutors presented evidence showing how they tracked the flow of cryptocurrencies from the darknet markets through Bitcoin Fog, which they alleged Sterlingov exploited. The government also relied on testimony from other crypto criminals, including Ilya Lichtenstein and Larry Harmon, who testified about the use of mixers for money laundering.
Bitcoin Fog founder maintains his innocence despite conviction
Sterlingov, who has consistently denied running Bitcoin Fog, testified that he reportedly worked in information technology and helped clients create domain names during his employment at a marketing and web company.
Furthermore, Sterlingov claimed that he had no recollection of creating the Bitcoin Fog domain name or engaging in any business transactions referred to by the government.
Lawyer Tor Ekeland also claimed that there was no concrete evidence linking Sterlingov to the operation of Bitcoin Fog, highlighting a lack of eyewitness accounts or server logs.
Ekeland also questioned the logic of using a secret multi-step process to fund Bitcoin Fog when the initial transaction came from an account in Sterlingov’s name. Sterlingov now faces a possible prison sentence of up to 20 years for the most serious charges.
As of the last update, Bitcoin, the largest cryptocurrency on the market, lost just under 2% correction, after which it briefly fell to $68,500 and temporarily fell below the significant $70,000 mark. However, the cryptocurrency quickly recovered and is currently trading at $71,400 at the time of writing.
Despite this temporary correction, Bitcoin has still posted notable gains of 11%, 25%, and 48% respectively over the past seven, fourteen, and thirty days. These substantial gains pushed BTC to its recent all-time high (ATH) of $73,000, which was reached on Monday.
Featured image from Shutterstock, chart from TradingView.com
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