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Ruholamin Haqshanas
Author
Ruholamin Haqshanas
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Roman Sterlingov, the founder of the cryptocurrency mixer Bitcoin Fog, is appealing against a potential 30-year prison sentence following his conviction on multiple money laundering charges.
In a filing submitted on August 15 to the United States District Court for the District of Columbia, Sterlingov’s lawyers argued that such a lengthy sentence is excessive and inconsistent with comparable cases.
His legal team refrained from suggesting a specific sentence but emphasized that the government’s recommendation of a 20 to 30-year term is unjustified.
They contend that the proposed sentence does not align with the outcomes of similar cases, where lighter penalties were imposed.
Sterlingov Convicted of Money Laundering
Sterlingov was convicted in March on charges of money laundering, conspiracy, operating an unlicensed money transmitting business, and transmitting money without a license in Washington, D.C.
Prosecutors allege that he operated Bitcoin Fog from 2011 to 2021, facilitating the laundering of approximately $400 million in Bitcoin linked to various illicit activities, including drug trafficking, identity theft, and computer fraud.
However, Sterlingov’s defense team disputes his level of involvement, arguing that while he was connected to Bitcoin Fog, he was not responsible for its operations.
They assert that much of the evidence presented during the trial was circumstantial, noting that key pieces of evidence, such as the Bitcoin Fog server, server logs, private keys, or ledger, were never introduced in court.
The defense also highlighted Sterlingov’s personal history, emphasizing his commitment to family and friends as grounds for a reduced sentence.
They argue that the verdict suggests his role was more in aiding and abetting rather than directly operating Bitcoin Fog.
Judge Randolph Moss had initially scheduled Sterlingov’s sentencing for August 21 but later decided to first hear arguments regarding the government’s forfeiture order.
This includes assets such as 1,354 BTC in a Bitcoin Fog wallet that has remained untouched since 2012, and a potential $395 million judgment.
Tornado Cash Surpasses $1.8 Billion in Deposits in H1
Popular crypto mixing protocol Tornado Cash has experienced a resurgence in 2024, with deposits surpassing $1.8 billion in the first half of the year.
The figure is up by 45% compared to the total amount deposited in the crypto mixer during the entirety of 2023.
In recent times, Tornado Cash has observed a substantial influx of funds from hackers involved in major thefts.
Notably, the perpetrator behind the Poloniex exchange heist, who made off with over $100 million last year, transferred $76 million to Tornado Cash in the past two months, as reported by Arkham Intelligence.
Additionally, hackers responsible for exploiting the HECO Bridge and Orbit Chain have moved $166 million and $47.7 million, respectively, to the mixer this year.
In August 2022, Tornado Cash faced sanctions from the US Treasury due to its involvement in laundering more than $455 million worth of cryptocurrency stolen by the North Korea-affiliated hacking group, Lazarus.
Following the sanctions, monthly deposits to Tornado Cash plummeted by over 90%.
However, the decentralized nature of the protocol poses challenges for US authorities in effectively monitoring its usage.
