TL;DR Breakdown
• Bitcoin Fog collected over $70 million in 10 years.
• Sterlingov earned up to $8 million in transaction fees.
FBI claims Roman Sterlingov laundered approximately $336 million in Bitcoin Fog on the darknet. The FBI department arrested the Russian citizen for having the largest Bitcoin money-laundering service on the Darknet. The operator had moved huge sums of money, which made him a millionaire in a very short period of time.
According to some government documents, Sterlingov had for 10 years put Bitcoin Fog to work as a cryptocurrency transaction shrouder. This service made users send their BTC without the blockchain noticing. Like a hidden service broke the grip on Bitcoin.
This process worked in a way that unlinked the Bitcoin in transactions and addresses. These Bitcoins are then mixed with before the transaction is made. This system allowed users on Bitcoin Fog to engage in money laundering by having hidden transactions.
Bitcoin Fog even tweeted that it was a “service that helps people to hide the origin of their income in Bitcoin.” This company was founded in 2011, according to the IRS, until last week it provided its services. This website renames itself “Darknet’s Official Bitcoin Mix.”
Bitcoin Fog movements
According to official figures, Bitcoin Fog had moved over 1.2 million Bitcoin worth $335.8 million. The internal tax service has ruled on the case stating that the website endorsed illegal businesses. Bitcoin Fog was very useful for the Darknet dedicated to drug trafficking, theft of goods, and other illegal acts.
Although the website owner remained anonymous, the FBI tracked down the developer’s whereabouts. This system used by the government could also be useful in identifying other potentially dangerous users. Although a user can create several Bitcoin addresses to hide his identity, there is always a weak point.
The agents in charge used the marketing services to analyze the blockchain and locate the users. This method helped the FBI to comply with the law to apprehend Bitcoin Fog users.
Bitcoin Fog earnings in 10 years
These court documents also estimate that Bitcoin Fog charged 2 to 2.5% in fee for each transaction. According to the activity that the company has had, Sterlingov earned $8 million in commissions. Since its inception, the BTC surge could have given Bitcoin Fog more than $70 million in profit.
Roman Sterlingov was charged with money laundering and operating unlicensed Bitcoin transactions in Washington, DC. Sterlingov is likely to spend many years in jail for these crimes.
The FBI is still on the hunt for potentially dangerous Bitcoin Fog operatives. The transaction website is no longer operational and has been sanctioned from working for similar domains.
