Bitcoin Fog Founder Challenges Lengthy Money Laundering Sentence

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Roman Sterlingov, the founder of the cryptocurrency mixing service Bitcoin Fog, is pushing back against what his legal team describes as an “unwarranted” prison sentence following his recent conviction on multiple charges, including money laundering.

In an August 15 filing in the United States District Court for the District of Columbia, Sterlingov’s lawyers did not propose a specific sentence but argued against the prosecution’s recommendation of 20 to 30 years in prison, stating that such a lengthy term would be excessive compared to similar cases.

Background

Sterlingov, convicted in March by a jury, was found guilty of operating Bitcoin Fog as a money laundering service from 2011 to 2021. The charges included money laundering, conspiracy to launder money, operating an unlicensed money-transmitting business, and conducting money transmission without a license in Washington, DC.

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According to the prosecution, Bitcoin Fog was used by criminals to mix and obscure the origins of approximately $400 million in Bitcoin tied to various illicit activities, such as drug trafficking, identity theft, and computer fraud.

Defense Team’s Claims

Despite the conviction, Sterlingov’s defense team maintains that the evidence presented during the trial was largely circumstantial. They argued that while Sterlingov may have had connections to Bitcoin Fog, he was not the mastermind behind its operations.

The defense memo highlighted Sterlingov’s past and his dedication to the well-being of his family and friends, suggesting that a much lighter sentence would be more appropriate. They pointed out that key pieces of evidence, such as the Bitcoin Fog server, server logs, private keys, or ledger, were never submitted during the trial.

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The sentencing memo emphasized that Sterlingov’s conviction aligns more with aiding and abetting rather than directly operating Bitcoin Fog. The defense urged the court to consider these factors when determining his sentence, arguing that the government’s recommended sentence was overly harsh.

What’s Next?

U.S. District Judge Randolph Moss had initially set a sentencing hearing for Sterlingov on August 21. However, the court will also hear arguments regarding the government’s order of forfeiture during this hearing. At stake are assets including 1,354 BTC held in a Bitcoin Fog wallet, which has remained dormant since 2012, as well as a potential $395 million judgment.

Sterlingov’s case has drawn parallels with the prosecution of Tornado Cash co-founder Roman Storm, who is also facing criminal charges in the United States for his involvement with a similar crypto mixing service.

Additionally, Tornado Cash developer Alexey Pertsev is currently appealing a five-year sentence for money laundering after being convicted in May.

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