Bitcoin Fog Founder Sentenced to 12 1/2 Years in Prison for Laundering Darknet Market Proceeds

Roman Sterlingov, 36, was sentenced to 150 months Friday in Washington federal court by US District Judge Randolph Moss.

The founder of a cryptocurrency mixing service known as Bitcoin Fog was sentenced to 12 1/2 years in prison on Friday for laundering tens of millions of dollars from darknet markets that sold illegal drugs.

Roman Sterlingov, 36, was sentenced by US District Judge Randolph Moss in Washington federal court. A jury convicted Sterlingov in March on charges related to operating what prosecutors said was one of the “largest and longest-running money laundering services.”

Sterlingov provided a service that jumbled digital tokens to make it more difficult to find the source of proceeds from illegal activities. Prosecutors said Bitcoin Fog processed hundreds of millions of dollars in untraceable transactions, including some from known darknet markets.

Sterlingov was convicted of conspiring to launder money, money laundering, and two charges related to running an unregistered money transmitting service.

In court Friday, Sterlingov expressed remorse. “I am sorry for any harm that may have come from my actions,” he told the judge through a Russian interpreter. “I'm fully committed to becoming a better person.”

Moss imposed a substantially lighter prison term than the 30 years requested by the government and the 50-year maximum in US sentencing guidelines.

“A life sentence seems inconsistent with the level of culpability,” but the penalty should be harsh enough to deter others, especially in the crypto world where authorities have a hard time catching criminals, the judge said.

Prosecutors pushed for a stiff sentence because of the size and duration of the scheme. “This is criminal activity of a staggering scale over a prolonged period of time,” said Christopher Brown, a prosecutor in the case.

The government also said Sterlingov lied under oath during the trial when he denied operating Bitcoin Fog or deriving wealth from the mixing service. The defendant’s statements can’t “be reconciled with the jury’s verdict,” prosecutors wrote in their sentencing memo.

At trial, Sterlingov testified that he used Bitcoin Fog, but didn't operate the service. His attorney, Tor Ekeland, said there were no eyewitness accounts or service logs that prove his client ran the service.

Sterlingov's defense lawyers told the judge he shouldn't get more than seven and a half years in prison.

The case is US v. Sterlingov, 21-cr-00399, US District Court, District of Columbia (Washington, DC).