US Officials Arrest Alleged Operator of $336M Bitcoin Mixing Service
According to public court documents, federal agents arrested Roman Sterlingov, a Russian and British taxpayer, on three charges stemming from his alleged participation with bitcoin mixing support Bitcoin Fog: Earning cash transfers, money laundering and money without a permit.
While the U.S. government hasn’t gone after many bitcoin mixing services earlier, prosecutors have predicted such solutions’ a crime’ previously.
The service was launched in 2011 and has allegedly been used to transport a few 1.2 million BTC ($335.8 million based on their value when the transactions occurred). Clients apparently sent bitcoin from Silk Road, Evolution, AlphaBay, Agora and Silk Road 2.0.
Bitcoin stolen from exchanges through hacks went via Bitcoin Fog, the affidavit maintained. But, Bitcoin Fog isn’t a Financial Crimes Enforcement Network-registered cash services firm, and was not licensed to operate inside Washington, D.C..
Federal agents used blockchain analysis to ascertain that the 1.2 million figure, as well as a number of the resources to get these funds, ” the record stated.
‘While the identity of a Bitcoin address owner is usually anonymous (unless the owner chooses to make the data publicly accessible ), law enforcement can frequently recognize the owner of a particular Bitcoin speech by analyzing the blockchain,’ Beckett said in his affidavit.
An IRS agent conducted a transaction on Bitcoin Fog, discovering that it was a successful mixing service. Another transaction the IRS agent claimed was out of a narcotics sale was also sent via the service.
‘Analysis of bitcoin transactions, fiscal records, Internet service provider documents, email records and additional investigative information, explains Roman Sterlingov since the principal operator of Bitcoin Fog,’ Beckett said.
Investigators also supposedly tied Sterlingov to the Bitcoin Fog domain, using a payment generated by Liberty Reserve. The researchers also tied Sterlingov into Mt. Gox accounts, that the suspect allegedly logged into in the exact same IP addresses that were utilized for its Liberty Reserve account.
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