Bitcoin Fog operator is arrested on money laundering and other charges.
32-year-old Russian-Swedish citizen Roman Sterlingov was arrested at Los Angeles International Airport and charged with running the longest running Bitcoin money laundering service Bitcoin Fog on the darknet. He has headed the service since 2011 and has been charged with “money laundering, operating an unlicensed money transfer business, and transferring funds unlicensed in the District of Columbia.”
According to court records, “Bitcoin Fog was the longest running cryptocurrency blender and gained notoriety as a money laundering service for criminals who wanted to hide their illegal earnings from law enforcement.” The complaint reads: “Mr. Sterlingov founded Bitcoin Fog in 2011 under the pseudonym Akemashite Omedetou, who advertised his service on BitcoinTalk [mixes] Increase your bitcoins in our own pool with other users and avoid the possibility of finding your payments and make it impossible to prove a connection between a deposit and a withdrawal within our service. “
Photo by Soumil Kumar from Pexels
Authorities claim the service moved over 1.2 million bitcoin (valued at approximately $ 335 million), most of which came from darknet markets associated with “illegal narcotics, computer fraud, abuse and identity theft” Have been linked. There are many underground products and services sold illegally in cyberspace and the Department of Justice (DOJ) is constantly looking for and closing these websites. The Cyber Crime Unit of the IRS-CI District of Columbia and the FBI Washington Field Office are specifically investigating this case.
Special Agent Devon Beckett said, “Analysis of Bitcoin transactions, financial records, ISP records, email records and additional investigative information identifies Roman Sterlingov as the primary operator of Bitcoin Fog. While the identity of a Bitcoin address owner is generally anonymous (unless the owner chooses to make the information publicly available), law enforcement agencies can often identify the owner of a particular Bitcoin address by analyzing the blockchain. “
Jonathan Levin, Co-Founder of Chainalysis, added, “This is another example of how investigators, with the right tools, can use cryptocurrency transparency to follow the flow of illicit funds.”
Bitcoin has grown in popularity over the past few years. It has been slow to take hold, but since its inception more than a decade ago, there have been many competitors in the market and more than 1,500 cryptocurrencies are now traded on exchanges.
“Probably the biggest shortcomings in Bitcoin and other cryptocurrencies in recent years are security,” said Chakib Bouda, CTO at Rambus, referring to Bitcoin and other cryptocurrencies worth billions of dollars that were stolen from the exchange by hackers . And unfortunately there are some like Sterlingov trying to operate under the radar on the dark net, making it difficult for security efforts to keep up.
However, Bouda added, “We expect Bitcoin to go mainstream ten years from now and have a remarkably different reputation.”
David Schwartz, CTO of Ripple, agrees, saying, “The next decade will see an explosion of low-cost, high-speed payments that will change the exchange of values just as the Internet has changed the exchange of information.” Ripple is a real-time gross settlement system, currency exchange and remittance network created by Ripple Labs Inc.
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