By EZ in News — Nov 10, 2024

Bitcoin Fog User Roman Sterlingov Gets 12.5 Years for Allegedly Running It Based on 'Junk Science'

A dual Russian-Swedish national Roman Sterlingov was sentenced to 12 years and six months in prison and forced to "pay a forfeiture money judgment" of around $395.5 million for his alleged operation of the "longest-running bitcoin money laundering service on the darknet."

No Bullshit Bitcoin is 100% community-funded.

Roman Sterlingov, 36, was sentenced to 150 months in federal prison and ordered to forfeit $395 million and seized assets worth around $1.76 million on Friday.
Additionally, he was ordered to forfeit 1,345 BTC from the Bitcoin Fog wallet, valued at over $103 million, ruled Washington federal court by US District Judge Randolph Moss.

In March, Sterlingov was found guilty of money laundering, conspiracy to commit money laundering, operating an unlicensed money transmitting business, and money transmission without a license. Prosecutors claim he ran the Bitcoin Fog mixer from 2011 to 2021 and were seeking a prison sentence of 20 to 30 years.
During the trial, Sterlingov stated that he used Bitcoin Fog but denied being the operator of the platform. His lawyer, Tor Ekeland, argued that there were no eyewitness testimonies or service logs to demonstrate that his client managed the service. Sterlingov's defense team requested that the judge impose a prison sentence of no more than seven and a half years.

"Most of the evidence at trial was circumstantial and neither the Bitcoin Fog server, server logs, private keys or ledger were ever entered into evidence," stated Sterlingov's defense in a sentencing memorandum.

Sterlingov's case is branded as the case that "put cryptocurrency tracing on trial" as the prosecutors did not find any smoking-gun criminal evidence from his belongings or devices upon his arrest. Instead, the charges rely on a blend of blockchain tracing, IP address matching, and connections between online accounts, as outlined in the statement of facts released when charges were made public in April 2021.

At trial, Judge Moss defended Chainalysis' Reactor software as "sufficiently reliable," adding that "it doesn't need to, at least as offered in this case, offer, you know, absolute precision. So if it were right, you know, only 90 percent of the time or only 80 percent of the time, I think it would still be valuable for offering the evidence that the government is seeking to offer it for."
"I am sorry for any harm that may have come from my actions. I’m fully committed to becoming a better person," Sterlingov reportedly said in court on Friday.

"As proven at trial, Roman Sterlingov created and used an online tool to process hundreds of millions in illegal transactions, enabling darknet drug dealers and those who sell child sexual abuse material, to operate. Today’s sentence sends an unmistakable message: those who help criminals with online payments for their illegal activities will face serious penalties. This prosecution also provides more proof that we have the skilled investigators and talented prosecutors needed to hold those who operate these darknet sites accountable, said U.S. Attorney Matthew M. Graves for the District of Columbia in a press release.

According to OXT Research report, a "very disturbing aspect" of this case is that "the scientific method has been completely ignored while considering that “hearsay” or anecdotal evidence of past successes are a replacement for tracking false positives and negatives."