Bitcoin Fog Operator Convicted of Money Laundering Conspiracy

A federal jury in Washington, D.C., convicted a dual Russian-Swedish national today for his operation of the longest-running bitcoin money laundering service on the darknet.

“Roman Sterlingov thought he could use the shadows of the internet to launder hundreds of millions of dollars in bitcoin without getting caught. But he was wrong,” said Deputy Attorney General Lisa Monaco. “Our team of agents, analysts, and prosecutors were relentless in their pursuit of justice, painstakingly tracing bitcoin through the blockchain to hold Sterlingov and his Bitcoin Fog enterprise to account. Today, a jury returned guilty verdicts on all counts — showing that no matter where you operate, if your cryptocurrency service reaches the United States, you must abide by U.S. law.”

“The FBI’s cyber workforce remains relentless in the pursuit of criminals who leverage technology to conduct and facilitate illegal activity,” said FBI Deputy Director Paul Abbate. “Today’s conviction is the result of close collaboration between the FBI and our federal and international partners to impose consequences on Bitcoin Fog and its operator for their money laundering activities. The FBI will continue to use all available tools and resources to impose costs on cybercriminals, no matter where they operate.”

According to court documents and evidence presented at trial, Roman Sterlingov, 35, was involved in operating Bitcoin Fog from 2011 through 2021. Bitcoin Fog was the longest-running cryptocurrency “mixer,” gaining notoriety as a go-to money laundering service for criminals seeking to hide their illicit proceeds from law enforcement. Over the course of its decade-long operation, Bitcoin Fog moved over 1.2 million bitcoin, which was valued at approximately $400 million at the time of the transactions. The bulk of this cryptocurrency came from darknet marketplaces and was tied to illegal narcotics, computer crimes, identity theft, and child sexual abuse material.

“Roman Sterlingov operated Bitcoin Fog, a cryptocurrency ‘mixing’ service that allowed criminals to launder hundreds of millions of dollars in illicit funds from darknet marketplaces.  The defendant and his customers believed they could use Bitcoin Fog to conceal these illicit transactions,” said Acting Assistant Attorney General Nicole M. Argentieri of the Justice Department’s Criminal Division. “As the jury’s guilty verdict shows, that belief was mistaken. The Criminal Division is committed to unmasking and prosecuting those who use technology to hide their crimes, no matter how sophisticated the scheme may be.”

“Darknet criminals should know by now that operations like Bitcoin Fog cannot provide the anonymity for cryptocurrency transactions that they claim they can,” said U.S. Attorney Matthew M. Graves for the District of Columbia. “This conviction demonstrates that the United States can and will combat the use of technology to carry out crimes in cyberspace.”

“Evidence presented at trial clearly showed that the defendant laundered hundreds of millions of illicit funds from the dark web through Bitcoin Fog in an attempt to conceal the origin of those funds,” said Chief Jim Lee of IRS Criminal Investigation (IRS-CI). “IRS Criminal Investigation special agents are specially equipped to follow the complex financial trail left by criminals, and we are dedicated to holding those accountable for crimes committed.”

The jury convicted Sterlingov of money laundering conspiracy and sting money laundering, which each carry a maximum penalty of 20 years in prison, and of operating an unlicensed money transmitting business and money transmission without a license in the District of Columbia, which each carry a maximum penalty of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The IRS-CI District of Columbia Cyber Crime Unit and FBI Washington Field Office investigated the case. The Justice Department’s Office of International Affairs and FBI’s Virtual Asset Unit provided invaluable assistance. Additional assistance was provided by Europol; the Swedish Economic Crime Authority, Swedish Prosecution Authority, and Swedish Police Authority; and the General Inspectorate of Romanian Police, Directorate for Combatting Organized Crime, and Directorate for Investigating Organized Crime and Terrorism.

Trial Attorneys Jeff Pearlman and C. Alden Pelker of the Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS) and Assistant U.S. Attorney Christopher B. Brown for the District of Columbia are prosecuting the case. Pelker and Brown are members of CCIPS’ National Cryptocurrency Enforcement Team (NCET). CCIPS Paralegal Specialist Divya Ramjee and Paralegal Specialist Angela De Falco for the District of Columbia provided valuable assistance.