FBI Arrests Man Accused of Running $335,000,000 Bitcoin Money Laundering Service

FBI agents have arrested Roman Sterlingov, the alleged principal operator of Bitcoin Fog, a website that offers Bitcoin (BTC) “tumbler” or “mixer” services designed to anonymize crypto transactions.

Sterlingov is now detained in Los Angeles on three charges – laundering of monetary instruments, operating an unlicensed money transmitting business, and money transmission without a license.

He was arrested following an undercover operation that started in 2019. Authorities say they tracked him by analyzing his Bitcoin transactions, financial records, internet service provider records, email records, and other information.

According to a legal statement filed by the Internal Revenue Service (IRS), Bitcoin Fog laundered more than 1.2 million BTC – about $335,809,383 at the time of transactions – since October 2011.

The IRS estimates that Sterlingov would have made about $8 million in commissions if he cashed out the administrative fees ranging between 2% to 2.5% on each deposit around the time of the transactions. 

“Due to the significant increase in value of Bitcoin over the course of Bitcoin Fog’s operation – from a low of approximately $2 shortly after Bitcoin Fog launched in fall 2011 to a current value of $50,000 – Sterlingov has been able to reap significant appreciation from his profits that were kept in Bitcoin.

The current value of the Bitcoin Fog cluster – including customer funds in Sterlingov’s control and Sterlingov’s own money – is nearly $70 million.” 

Contributed by The Daily Hodl.