bitcoin Fog Founder Appeals 30-Year Sentence
Roman Sterlingov, the mastermind behind the cryptocurrency mixer bitcoin Fog, is fighting against a potential 30-year jail term after being found guilty of multiple money laundering charges. Amidst the legal battle, his defense team has submitted a filing to the United States District Court for the District of Columbia, arguing that the suggested sentence is excessively harsh compared to similar cases.
The dispute revolves around the government's recommendation for a 20 to 30-year prison term, which Sterlingov's lawyers deem unjustified. They contend that such a lengthy sentence does not align with the outcomes of comparable money laundering cases, where lighter penalties were imposed.
Sterlingov's Conviction and Legal Battle
In March, Sterlingov was convicted on various charges, including money laundering, conspiracy, operating an unlicensed money transmitting business, and transmitting money without a license in Washington, D.C. Prosecutors claim that he ran bitcoin Fog from 2011 to 2021, facilitating the laundering of approximately $400 million in bitcoin associated with illicit activities like drug trafficking, identity theft, and computer fraud.
However, Sterlingov's defense team disputes the extent of his involvement in bitcoin Fog's operations. They argue that while he had ties to the platform, he was not directly responsible for its activities. The defense highlights the circumstantial nature of much of the evidence presented during the trial, noting the absence of critical pieces of evidence in court.
In addition, Sterlingov's lawyers emphasized his personal background, underscoring his strong connections to family and friends as grounds for a reduced sentence. They assert that the verdict implies his role was more supportive than directly operational within bitcoin Fog.
Originally, Judge Randolph Moss had slated Sterlingov's sentencing for August 21, but a temporary hold was placed to address arguments related to the government's forfeiture order. This process involves assets like 1,354 BTC in a bitcoin Fog wallet that has remained untouched since 2012, and a potential $395 million judgment.
Tornado Cash's Remarkable Growth
In a separate development, the popular crypto mixing protocol, Tornado Cash, witnessed a remarkable surge in deposits, surpassing $1.8 billion in the first half of 2024. This figure represents a 45% increase compared to the total deposits made throughout 2023.
Recently, Tornado Cash attracted significant funds from hackers involved in major thefts. For instance, the individual behind the Poloniex exchange heist, who absconded with over $100 million last year, transferred $76 million to Tornado Cash within the past two months, according to Arkham Intelligence.
Furthermore, hackers responsible for exploiting the HECO Bridge and Orbit Chain moved $166 million and $47.7 million to the mixer this year, respectively. In August 2022, Tornado Cash faced repercussions from the US Treasury for its involvement in laundering over $455 million of cryptocurrency stolen by the North Korea-affiliated hacking group, Lazarus.
Despite the sanctions, monthly deposits to Tornado Cash plummeted by more than 90%. The decentralized nature of the protocol poses challenges for US authorities in effectively monitoring its usage, highlighting the complexities associated with regulating such platforms.
