Bitcoin big shot just arrested for laundering $336 million

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By Ian Morris
published

10 years and $366 million laundered by Bitcoin Fog

Bitcoins
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Roman Sterlingov has been arrested by U.S. authorities for allegedly laundering over 1.2 million Bitcoin, which is worth over $336 million. Sterlingov is believed to be the administrator of a “mixing” service called Bitcoin Fog, which was used to hide transactions to stop anyone being able to trace payments. 

Stelringov is a resident of Russia and Sweden but was arrested on Tuesday at Los Angeles International Airport. Sterlingov is thought to have personally taken commissions on the Bitcoin he laundered worth as much as $8 million, according to IRS estimates and according to Wired. He has been charged with money transmission without a licence, money laundering and unlicensed money transmission in the District of Columbia. 

Bitcoin Fog is particularly problematic for law enforcement organizations seeking to keep track of illegal activity that takes place on the dark web. The IRS has previously used undercover agents to test the site’s involvement with such activity, making requests to Bitcoin Fog to launder money from the sale of ecstasy, which it did. It’s thought that $78 million was spent on dark web sites like Silk Road and AlphaBay. 

The arrest of Sterlingov is a useful reminder that while Bitcoin might appear to be anonymous, it is quite the opposite. Transactions are stored on the blockchain forever and can be discovered in the case of an investigation. Those using Bitcoin Fog are likely feeling a little concerned right now. If any sort of records were kept by Sterlingov then they are likely in possession of the federal government by now. 

This isn’t the first time someone has been arrested for running a Bitcoin mixing service, or cryptocurrency tumbler as they are sometimes named. In February 2020 an Ohio resident Larry Dean Harmon was fined $60 million in a civil suit brought by the U.S. Treasury financial crimes unit. He ran a Bitcoin mixer called Helixm which was said to have laundered in excess of $300 million. 

Ian Morris

Ian has been involved in technology journalism since 2007, originally writing about AV hardware back when LCDs and plasma TVs were just gaining popularity. Nearly 15 years on, he remains as excited as ever about how tech can make your life better. Ian is the editor of T3.com but has also regularly contributed to Tom's Guide.