Bitcoin Fog Founder Roman Sterlingov Sentenced to Prison: Why?

Bitcoin Fog Founder Roman Sterlingov Sentenced to 12.5 Years in Prison

Roman Sterlingov, founder of the darknet’s oldest cryptocurrency mixer "Bitcoin Fog," has been sentenced to 12.5 years in prison. The U.S. District Court Judge Randolph Moss also ordered Sterlingov to pay a forfeiture money judgment of approximately $395.5 million, which includes seized cryptocurrency and funds.

Sterlingov Convicted of Multiple Charges

Sterlingov, a Russian-Swiss national, was found guilty of money laundering, conspiracy to launder money, operating an unlicensed money-transmitting business, and transmitting money without a license. Prosecutors stated that Bitcoin Fog, which Sterlingov operated for over a decade, was a go-to service for criminals looking to launder proceeds from illicit activities, including narcotics transactions on darknet markets. Throughout its operation, Bitcoin Fog processed over 1.2 million Bitcoin, valued at around $400 million at the time.

Despite prosecutors initially seeking a 20- to 30-year sentence, Judge Moss imposed a 12.5-year sentence, emphasizing the need for a significant deterrent in the cryptocurrency sector. However, he deemed a life sentence excessive. Principal Deputy Assistant Attorney General Nicole M. Argentieri highlighted that Sterlingov laundered over $400 million through Bitcoin Fog, demonstrating the Justice Department’s commitment to prosecuting those facilitating criminal conduct.

Deterrence and Financial Penalties

Sterlingov’s defense argued that he was merely a user of Bitcoin Fog and not its operator. They contended there was no direct evidence linking him to the management of the mixing service, such as service logs or eyewitness testimonies. Despite this, the jury found Sterlingov guilty in March, leading to his sentencing.

Judge Moss’s decision underscores the importance of deterrence in combating financial crimes within the cryptocurrency space. The forfeiture judgment of $395.5 million includes Sterlingov’s seized assets and his interest in a Bitcoin wallet holding over $103 million. The court's ruling aims to send a strong message to those involved in or considering similar activities.

The case against Sterlingov is part of a broader crackdown by the U.S. government on cryptocurrency mixers. This follows other significant actions, such as the postponement of the trial for Tornado Cash co-founder Roman Storm until April 2025 and the ongoing legal proceedings against individuals associated with the Samourai Wallet crypto mixer.

Sterlingov expressed remorse during his sentencing hearing, stating, “I am sorry for any harm that may have come from my actions.” His attorney, Tor Ekeland, had requested a maximum sentence of 7.5 years, citing the lack of direct evidence. Nonetheless, the court’s verdict reflects the serious implications of operating unlicensed and illicit financial services within the cryptocurrency industry.