After allegedly operating a bitcoin mixing service and laundering nearly $336 million in the cryptocurrency over the last decade, a man was arrested by federal agents this week.
Russian and Swedish citizen Roman Sterlingov was arrested in Los Angeles on charges of operating an unlicensed money transmitting business, laundering of monetary instruments, and money transmission without a license, all a result of his alleged involvement with mixing service Bitcoin Fog, according to a court document.
An affidavit filed by Internal Revenue Service Criminal Investigation Special Agent Devon Beckett and pointed out by Wired claims that Bitcoin Fog, which was launched in 2011, lets users transfer the cryptocurrency to each other while obscuring the source. Bitcoin Fog is allegedly responsible for the transfer of 1.2 million BTC, which was worth $336 million at their time of payment.
The affidavit also claims Bitcoin Fog was not licensed to operate in Washington, D.C. since it isn’t a Financial Crimes Enforcement Network-registered money services business, and that Bitcoin Fog also handled bicoin stolen through hacks.
“While the identity of a Bitcoin address owner is generally anonymous (unless the owner opts to make the information publicly available), law enforcement can often identify the owner of a particular Bitcoin address by analyzing the blockchain,” Beckett wrote in the affidavit, which says blockchain analysis was used to determine the 1.2 million BTC figure and some sources.
Beckett added that “analysis of bitcoin transactions, financial records, Internet service provider records, email records and additional investigative information, identifies Roman Sterlingov as the principal operator of Bitcoin Fog.”