Roman Sterlingov, a dual Russian-Swedish national, has been sentenced to 12 years and six months in prison for his role in operating Bitcoin Fog, a notorious cryptocurrency "mixer" that facilitated the laundering of over $400 million in illicit funds.
From 2011 to 2021, Sterlingov, 36, operated Bitcoin Fog, the longest-running bitcoin money laundering service on the darknet. The service was used by criminals to obscure the origin of their proceeds, with over 1.2 million bitcoin processed through the platform. The funds were primarily linked to illegal activities including drug trafficking, computer crimes, identity theft, and child sexual abuse material. At the time of the transactions, the bitcoin processed through Bitcoin Fog was valued at approximately $400 million.
In March 2024, following a month-long trial, a jury convicted Sterlingov on multiple charges, including money laundering conspiracy, money laundering, operating an unlicensed money transmitting business, and money transmission without a license.
In addition to his prison sentence, Sterlingov was ordered to pay a forfeiture judgment of $395,563,025.39. He will also forfeit cryptocurrency assets, including approximately 1,345 bitcoin, currently valued at more than $103 million, as well as other seized assets worth approximately $1.76 million.
Cryptocurrency exchanges are implementing anti-money laundering (AML) protocols, often tied to know-your-customer (KYC) requirements, to prevent their platforms from being used for illegal activities. According to Binance Academy, many exchanges are choosing to self-regulate, even when not required by existing regulations. Some companies have formed industry groups to develop self-regulatory frameworks.
Binance, the world’s largest cryptocurrency exchange by trading volume, announced in March that it had joined the Global Travel Rule Alliance. This move is intended "ensure a higher level of both data security and regulatory compliance." Binance said it joined the alliance to align with the Financial Action Task Force’s (FATF) Recommendation 16, also known as the Travel Rule. FATF is an intergovernmental organization that monitors issues such as money laundering and terrorism financing.
Noah Perlman, Binance's chief compliance officer, stated that the exchange has made significant investments in compliance and hired industry experts, including former government agents. He added that Binance is committed to continuous improvement and works closely with law enforcement to address illicit activities.
