Operation of Bitcoin Fog Mixer, convicted for laundering $400 Million

[Jating]

https://www.justice.gov/opa/pr/bitcoin-fog-operator-convicted-money-laundering-conspiracy

Russian-Swedish national Roman Sterlingov was convicted by the US DOJ and a faces a max penalty of 20 years in prison.

It took them years though, as this mixer existed since 2011 and have a lot of customers with illicit activities as it is rampant during those early days and this individual was taking advantage of it.

But then again, the long hand of the law has caught up with them.

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[stompix]

His lawyer for all the fuss he made came up with a really bad plan, the whole thing it wasn't me really dragged him down:
- I dont own the website but I might have worked at it at some point, can't remember
- I don't know anything about this website but yeah I've been using it for 5 years to clean my coins
- All the seized coins are from early investments, although they kept on growing in number of coins despite not having a source of revenue at all
- At one point you defend him as not spending like someone who has millions , the next line is about how he had millions from being an early buyer

[zasad@]

I have only 1 comment on such criminal cases: “Blockchain is the worst place for crimes, because all traces of transactions are protected” (C)
In the United States, there are no statutes of limitations for such crimes, and blockchain analysis technologies are becoming more advanced every year.

[Dave1]

I have only 1 comment on such criminal cases: “Blockchain is the worst place for crimes, because all traces of transactions are protected” (C)
In the United States, there are no statutes of limitations for such crimes, and blockchain analysis technologies are becoming more advanced every year.

Right, this crime I assumed happened in 2011 until it's closure, and it's just that this year they were able to trace everything to one individual. So it could be blockchain analysis is getting advance although I don't know what kind of technology they could have been using all this years to trace back.

Everything is in the blockchain so we are not safe. 20 years for this guy, the usual mandatory number of jail time years regardless of how much money they scam or how much illicit money they laundered and make profits.

[sokani]

I have only 1 comment on such criminal cases: “Blockchain is the worst place for crimes, because all traces of transactions are protected” (C)

This is very true, the blockchain is the worst place to commit crime. Most times these guys feel no one is watching but there's always someone lurking and waiting for the right moment to make a move. It's just like Jimmy Zhong who didn't know that the address of the stolen bitcoin was under surveillance and he made a dumb mistake of moving some of it to a CEX and that's where his downfall began.

Roman must have been enjoying himself not knowing he's being watched. According to the report he was arrested in Los Angeles airport. I'm sure he got flagged at whatever country he boarded his flight from but they just wanted him to land on US soil so that they could arrest him.

[FinneysTrueVision]

I have only 1 comment on such criminal cases: “Blockchain is the worst place for crimes, because all traces of transactions are protected” (C)
In the United States, there are no statutes of limitations for such crimes, and blockchain analysis technologies are becoming more advanced every year.

Blockchain analysis isn’t an exact science. There will be many false positives if you just rely on heuristics. Just from looking at basic analysis tools which are publicly accessible I often find many mistakes and incomplete data. Premium tools like Chainalysis Reactor might be more reliable but they are not infallible. Even Coinbase admits that it is more of an art than science.

I don’t know the full details of this case but from what I have read there was not enough evidence to assert that Sterlingov was actually running Bitcoin Fog. The accusation against him is based in part on BTC withdrawn from his Mt. Gox account which eventually made its way through a series of transactions to a domain purchase for a website which gave users instructions on how to access Bitcoin Fog. This is hardly a smoking gun. There might have been some loose affiliation or Sterlingov might have transacted with an affiliate of theirs, blockchain data doesn’t provide a definitive answer.

No matter how inconclusive the data may be, the state only cares about destroying our right to privacy and is willing to go to great lengths to accomplish this. Sterlingov is the most recent example but who knows what their next target will be. Any one of us can be locked away if enough pseudoscience is able to find some indirect link to a service they see as unfavorable.

[zasad@]

I also agree that blockchain analysis does not give accurate results and errors have already been known, but this makes it possible to very much reduce the circle of suspected people in order to then find all the criminals. It is enough to find several criminals who agree to cooperate with the investigation, and then all the participants in the criminal community will be found.

[blckhawk]

It took them years though, as this mixer existed since 2011 and have a lot of customers with illicit activities as it is rampant during those early days and this individual was taking advantage of it.

That's how investigation works especially with such a large case as this one, I even think that they could've taken him as quickly as possible but then the evidences that would pile up wouldn't be substantial enough to land him the maximum penalty, he'd get out in 2 or 7 years and then just do it again. Another reason that I can think of why they've taken so long doing this is to probably get those customers too and not just the service providers, that way they're getting more people in this money laundering operation.

But then again, the long hand of the law has caught up with them.

That's the way that it goes in life, if you're a lowly criminal that would do illegal things or participate in it, you should be ready to face the consequences and the fact that you're going to be messing with the law which has a nigh unlimited resources if they think that you're a criminal worth chasing over.

[stompix]

Roman must have been enjoying himself not knowing he's being watched. According to the report he was arrested in Los Angeles airport. I'm sure he got flagged at whatever country he boarded his flight from but they just wanted him to land on US soil so that they could arrest him.

Even if we assume he was not connected to Bitcoin fog at all, when you admit these:

Sterlingov says he “can’t remember” if he created Bitcoinfog.com and points out that he worked at the time as a web designer for a Swedish marketing company, Capo Marknadskommunikation

and

He concedes that he did send and receive payments to Bitcoin Fog as a user of the service seeking privacy, but says he didn’t use his bitcoins for anything illegal. “I think some of my transfers must have gotten mixed up with everything," he says.

and you have done so for millions, why the hell do you go to the States?
I don't get it, I didn't understand that for others who did live there, like James Zhong.
For god's sake you know the feds are waiting for just one thing to grab you and with double citizenship you just venture there?

Another reason that I can think of why they've taken so long doing this is to probably get those customers too and not just the service providers, that way they're getting more people in this money laundering operation.

They waited for Ilya Lichtenstein
https://www.ccn.com/news/ilya-lichtenstein-bitcoin-fog/

[alastantiger]

https://www.justice.gov/opa/pr/bitcoin-fog-operator-convicted-money-laundering-conspiracy

Anybody who is caught using bitcoin for criminal purposes should be jailed. I consider them as enemies of the community, selfish, and self-centered not looking or considering the needs of the community or how to ensure the progression of bitcoin. It is clear that the FBI are not against people using bitcoin but people leveraging bitcoin to conduct and facilitate illegal activity.

Today, it is Roman Sterlingov  tomorrow will be the next person who claims to be running a crypto business but is just a front criminal activities.