Roman Sterlingov, the founder of Bitcoin Fog, a cryptocurrency mixer, is appealing against a potential 30-year prison sentence following his conviction on multiple money laundering charges. His lawyers argue that such a long sentence is excessive and inconsistent with similar cases, refraining from suggesting a specific sentence but emphasizing that the government’s recommendation of 20 to 30 years is unjustified. Sterlingov was convicted in March on charges of money laundering, conspiracy, and operating an unlicensed money transmitting business. His defense team disputes his level of involvement, claiming that much of the evidence presented during the trial was circumstantial and that Sterlingov was not directly responsible for Bitcoin Fog’s operations.
The defense highlights Sterlingov’s personal history, emphasizing his commitment to family and friends as grounds for a reduced sentence. The government’s forfeiture order includes assets such as 1,354 BTC in a Bitcoin Fog wallet that has been untouched since 2012, as well as a potential $395 million judgment. Judge Randolph Moss initially scheduled Sterlingov’s sentencing for August 21 but decided to first hear arguments regarding the forfeiture order. The defense argues that the verdict suggests Sterlingov’s role was more in aiding and abetting rather than directly operating Bitcoin Fog.
Tornado Cash, a popular crypto mixing protocol, has seen a resurgence in 2024, with deposits surpassing $1.8 billion in the first half of the year, up by 45% compared to the total amount deposited in 2023. The protocol has observed an influx of funds from hackers involved in major thefts, with hackers from various high-profile incidents transferring millions of dollars to the mixer. In August 2022, Tornado Cash faced sanctions from the US Treasury for its involvement in laundering over $455 million in cryptocurrency stolen by a North Korea-affiliated hacking group, leading to a significant drop in monthly deposits. The decentralized nature of the protocol poses challenges for US authorities in monitoring its usage effectively.
Sterlingov’s legal team argues that the proposed sentence of 20 to 30 years is unjustified and excessive compared to similar cases where lighter penalties were imposed. They claim that Sterlingov’s level of involvement in Bitcoin Fog was not as significant as portrayed by prosecutors, pointing out that key pieces of evidence, such as the Bitcoin Fog server, logs, private keys, or ledger, were not introduced in court. The defense emphasizes Sterlingov’s background and his role in aiding and abetting rather than directly operating the cryptocurrency mixer. The government’s recommendation for such a long sentence does not align with outcomes in comparable cases.
The defense’s argument for a reduced sentence for Sterlingov centers around his personal history and his connections to Bitcoin Fog, claiming that he was not directly responsible for the platform’s operations. The government’s forfeiture order includes assets held in a Bitcoin Fog wallet since 2012 and a potential $395 million judgment. Judge Randolph Moss is set to hear arguments regarding the forfeiture order before proceeding with Sterlingov’s sentencing. The defense contends that the evidence presented during the trial was circumstantial and that Sterlingov’s role in Bitcoin Fog was more in aiding and abetting rather than operating the platform directly.
Tornado Cash has experienced a significant resurgence in 2024, with deposits exceeding $1.8 billion in the first half of the year, a 45% increase from the total deposits in 2023. The protocol has seen an influx of funds from hackers involved in major thefts, including incidents like the Poloniex exchange heist and exploits of the HECO Bridge and Orbit Chain. Despite facing sanctions in 2022 for laundering stolen cryptocurrency, Tornado Cash continues to operate, with challenges for US authorities in monitoring its decentralized nature effectively. The protocol’s popularity among hackers and launderers remains a concern for regulators, despite attempts to crack down on illicit activities in the crypto space.
