Close Menu
  • Coins
    • Bitcoin
    • Ethereum
    • Altcoins
    • NFT
  • Blockchain
  • DeFi
  • Metaverse
  • Regulation
  • Other
    • Exchanges
    • ICO
    • GameFi
    • Mining
    • Legal
  • MarketCap
What's Hot

Dow Jones up 200 points as jobs data outshines trade fears

18/06/2025

VeChain Is Just Getting Started, Says Sunny Lu—$VET to Power the New Digital Economy

18/06/2025

Omnia Protocol Partners with Flare Networks to Unlock More Private & interoperable Web3 Future

18/06/2025
Facebook X (Twitter) Instagram
  • Back to NBTC homepage
  • Privacy Policy
  • Contact
X (Twitter) Telegram Facebook LinkedIn RSS
NBTC News
  • Coins
    1. Bitcoin
    2. Ethereum
    3. Altcoins
    4. NFT
    5. View All

    Bitcoin Price Rise To New All-Time High Could Be Hindered By Rising CPI

    18/06/2025

    Fakeout or Breakout? BTC Above $109K – What’s Next?

    18/06/2025

    If Bitcoin Closes Above this Level, It Confirms Its Inverted Ascending Scallop, Targeting $244K

    18/06/2025

    Bitcoin Core Developers Merge Controversial Policy Changes: Is a Fork Ahead?

    18/06/2025

    Key Reason Why Ethereum (ETH) Is to Continue Running Named by Top Analyst

    18/06/2025

    Ethereum Price Prediction – ETH Price Estimated to Reach $ 2,868.64 By Jun 04, 2025

    18/06/2025

    Company That Previously Purchased $435 Million Worth of Ethereum Moves to Buy $1 Billion More

    18/06/2025

    Ethereum ETF Investors Sink Deeper

    18/06/2025

    VeChain Is Just Getting Started, Says Sunny Lu—$VET to Power the New Digital Economy

    18/06/2025

    Here’s why UMA token price just surged

    18/06/2025

    Whales Execute Over $10M in AAVE and GHO Transactions Across Ethereum Network

    18/06/2025

    Cardano CEO Urges Return to Bitcoin’s Vision as AI and Blockchain Transform Global Finance

    18/06/2025

    Official Hyperliquid NFTs Hit All-Time High of $65,000 on OTC Desks

    17/06/2025

    SBF Portrayed in Sold-Out Prison Musical With Luigi Mangione, ‘Diddy’ as Inmates

    17/06/2025

    NFTs Weekly Sales Surge 24% to $142M, Guild of Guardians & Immutable Dominate in Sales

    16/06/2025

    NFT sales pump 37% to $144.8m, Immutable dethrones Ethereum

    14/06/2025

    Dow Jones up 200 points as jobs data outshines trade fears

    18/06/2025

    VeChain Is Just Getting Started, Says Sunny Lu—$VET to Power the New Digital Economy

    18/06/2025

    Omnia Protocol Partners with Flare Networks to Unlock More Private & interoperable Web3 Future

    18/06/2025

    Bitcoin Price Rise To New All-Time High Could Be Hindered By Rising CPI

    18/06/2025
  • Blockchain

    Omnia Protocol Partners with Flare Networks to Unlock More Private & interoperable Web3 Future

    18/06/2025

    Binance and Pakistan IT Ministry Roll Out Blockchain Education Program for 80,000 Students

    18/06/2025

    VeChain Aims to Transform Amazon’s Supply Chain with Trustless Proof

    18/06/2025

    Ripple Makes Fundamental Statement About Blockchain Transforming Finance

    18/06/2025

    IQ AI and OpenLedger Collaborate to Enhance Intelligent Automation

    18/06/2025
  • DeFi

    DeFi Lending Sets New Record in June for Active Loans and TVL

    18/06/2025

    Set Your Own Price With New Uniswap Limit Orders Feature

    18/06/2025

    Tezos-based Etherlink Onboards Oku DeFi Aggregator

    18/06/2025

    Rewardy Wallet Joins Forces with DeFi Cattos to Boost the Next Wave of Blockchain & Web3 Gaming

    17/06/2025

    CoinDesk Indices, Sentora Unveil Stablecoin Overnight Rates to Mirror Money Market Tools

    17/06/2025
  • Metaverse

    How to Get Your Chatbot to Talk Dirty

    18/06/2025

    Meta Invests $14 Billion in Scale AI to ‘Deepen’ its Work on Superintelligence

    13/06/2025

    US Senators Probe Stablecoin Plans by Facebook Parent Meta

    12/06/2025

    Terminus Forges Alliance with COBOX to Revolutionize Metaverse

    11/06/2025

    DRX Asia Partners With Terminus to Build On Metaverse Ambitions

    11/06/2025
  • Regulation

    Dow Jones up 200 points as jobs data outshines trade fears

    18/06/2025

    Bitcoin-focused Matador Technologies lists on Frankfurt Stock Exchange

    18/06/2025

    Weighing institutional, retail demand for Circle ahead of public debut

    18/06/2025

    Adam Back Invests SEK 21 Million to H100 Group Bitcoin Treasury Strategy

    18/06/2025

    Why big investors are rushing to acquire Circle’s stock in $7.2b IPO

    18/06/2025
  • Other
    1. Exchanges
    2. ICO
    3. GameFi
    4. Mining
    5. Legal
    6. View All

    Shocking Survey Reveals Bearish FTX Payouts View

    18/06/2025

    Exodus Launches XO Pay, An In-App Bitcoin And Crypto Purchase Solution

    18/06/2025

    SunPump Taps Top CEXs to Supercharge TRON Meme Project Growth

    18/06/2025

    Hashed Transfers $12 Million in SAND to Binance as Market Activity Intensifies

    18/06/2025

    ICO for bitcoin yield farming chain Corn screams we’re so back

    22/01/2025

    Why 2025 Will See the Comeback of the ICO

    26/12/2024

    This Crypto Gaming PC Will Self-Destruct on Command

    17/06/2025

    Web3 Game My Neighbour Alice Launches on Chromia Blockchain

    17/06/2025

    Avalanche Launches Free Gaming ‘Battle Pass’ With AVAX and NFT Rewards

    17/06/2025

    Games That Feature the Dogecoin Meme Pup

    16/06/2025

    BTC block production is shifting to the USA

    17/06/2025

    AgriFORCE Launches Gas-Powered Bitcoin Mining Site in Alberta, Plans Expansion to 1 EH/s

    17/06/2025

    U.S.-Listed Bitcoin Miners’ Share of Network Hashrate Hit Record High in June: JPMorgan

    17/06/2025

    Bitcoin Mining Costs Soar as Hashrate Hits Records: TheMinerMag

    17/06/2025

    Trump Administration Pressed for Answers on “Ongoing” Operation Chokepoint 2.0

    17/06/2025

    Why this Bitcoin-Friendly Lawmaker Carries a US Debt Clock in His Pocket

    17/06/2025

    Trump’s Suspended Tariffs Reinstated by US Appeals Court Ruling – What’s Happening? Here Are the Details

    17/06/2025

    An Event That Will Make Headlines is Expected to Be Announced Later Today

    17/06/2025

    Dow Jones up 200 points as jobs data outshines trade fears

    18/06/2025

    VeChain Is Just Getting Started, Says Sunny Lu—$VET to Power the New Digital Economy

    18/06/2025

    Omnia Protocol Partners with Flare Networks to Unlock More Private & interoperable Web3 Future

    18/06/2025

    Bitcoin Price Rise To New All-Time High Could Be Hindered By Rising CPI

    18/06/2025
  • MarketCap
NBTC News
Home»Legal»How a Bitcoin Mixer Laundering Conviction Might Be Appealed
Legal

How a Bitcoin Mixer Laundering Conviction Might Be Appealed

NBTCBy NBTC14/03/2024No Comments7 Mins Read
Share
Facebook Twitter LinkedIn Pinterest Email


On perhaps the first spring day of the year in Washington D.C, after spending three years in federal holding, on Tuesday Russian-Swedish national Roman Sterlingov was convicted of four charges related to running the no-longer operational bitcoin (BTC) mixing service Bitcoin Fog. Sentencing is set for July 15, and he faces decades in prison for crimes related to money laundering and unregistered money transmitting.

This is an excerpt from The Node newsletter, a daily roundup of the most pivotal crypto news on CoinDesk and beyond. You can subscribe to get the full newsletter here.

Tor Ekeland, a known entity when it comes to the criminal defense of supposed computer criminals, told CoinDesk in a phone interview the defense intends to appeal the decision. The main issue is a matter of jurisdiction; up until Sterlingov’s arrest in Los Angeles in April of 2021, the defendant hadn’t stepped foot in the U.S.

It’s a strategy Ekeland employed in his first major win against the government — defending “Nazi troll” Andrew “Weev” Auernheimer, charged with violating the Computer Fraud and Abuse Act after he exposed a massive security flaw in AT&T’s website. Ekeland won on appeal after the court found the venue, the state of New Jersey, had no connection to Auernheimer or AT&T.

“This is just the halfway point,” Ekeland said, noting that he expected and respected the jury’s verdict and that federal criminal win rates exceed 99%. Ekeland’s main argument is that the Department of Justice was able to bring the case after the IRS, which was involved in the decade-long investigation, contacted Bitcoin Fog customer service asking if it’d be a good platform to launder funds earned from selling drugs.

“If the government can get criminal venue from what they did in this case, that means that any prosecutor in the f***ing United States can sit down at their computer in Podunkville, do a transaction on your website and then criminally charge you in the place that they do it,” he said. That “blows a hole in the venue clause” set up by the U.S. Constitution.

See also: When Did Privacy Become a Bad Word? | Opinion

Adding to this issue is that Ekeland and his partner on the case Mike Hassard, a friend of Sterlingov, filed motions to dismiss the case and for presiding District Judge Randolph Moss to clarify the “venue issue” that were only answered “from the bench” the day the trial began. “There’s a gigantic venue issue … and I can kind of tell that the judge knew” that.

There are other issues Ekeland intends to raise when he files a notice of appeal after Sterlingov’s sentencing this summer having to do with what the government was allowed to enter into evidence versus the defense and other “shaddy” background issues that may cast doubt on the decision.

“I mean, we got [into evidence] that [Sterlingov] was in jail, when Bitcoin Fog took his last withdrawal,” he said. However, there are other issues about the site’s operations and sunsetting that occurred when Sterlingov could not have had access to the servers, Ekeland noted. More importantly, Ekeland said that the government never conclusively showed Sterlingov ever operated or profited from the site — he was just an early user.

“The flow of funds is not the same as flow of control,” Ekeland said, discussing a particular series of transactions supposedly linking Sterlingov to Bitcoin Fog’s domain name registrar. He suggested that in 2011 Sterlingov, who had supported his lifestyle by trading bitcoin, sold bitcoin to the people who started Bitcoin Fog.

This is a point J.W. Verret, an associate professor at George Mason University’s Antonin Scalia Law School, raised in a Cointelegraph op-ed, noting “Sterlingov may have sold Bitcoin to someone who bought the Bitcoin Fog website, or that someone may have later sold Bitcoin to someone who then sold it to someone else.”

Matt Price, who participated in the government’s investigation of Bitcoin Fog while with the IRS Criminal Investigation team and who now leads strategic engagement at on-chain analysis firm Elliptic, disagrees. “The evidence linking to that transaction was very clear — we had source information, I’ve seen the records. That was not the most complicated tracing I’ve ever done.”

See also: Privacy Is a Human Right | Opinion

It’s a significant point considering that much of the criminal defense hinged on discrediting the notion of on-chain analysis — particularly that of Chainalysis’ Reactor software used by numerous government agencies around the world. In one of the pre-trial hearings, which ended up totalling over 1,800 pages of records, Ekeland referred to Chainalysis’ software as “junk science.”

In particular, in a lengthy pretrial debate, there were concerns the software had not been “peer-reviewed” or scientifically accredited and could generate false positives. This ended up not mattering much in court: Judge Moss said he was “unpersuaded” by the defense’s stance that blockchain analytics is faulty.

“Substantial evidence supports the government’s submission that the software is highly reliable—and, if anything, conservative,” Moss wrote in a 31-page pre-trial order.

This may cycle back to the appeals case Ekeland is building: In August, Jonelle Still, director of investigations and intelligence at competitor analysis firm CipherTrace, submitted a 41-page expert report claiming Chainalysis used “unverifiable” and “incomplete” techniques to incorrectly link Sterlingov to Bitcoin Fog. Mastercard, which bought CipherTrace in 2021, later spiked the report.

“We lost our tracing expert right before the trial,” Ekeland said, adding “we never got a really clear reason why.”

For its part, a Chainalysis representative said over email that “the decision directly dismisses concerns around error rate, peer review or testing,” adding those issues are hardly “relevant to the underlying technology.” It was a point Price agreed with, saying the argument “fell flat with the jury.”

Questions about blockchain analysis to one side, Price said his investigations while at the IRS were “old fashioned manual police work.” The case took a decade to build, “we were all over traveling around the world, taking all kinds of different investigative steps, reviewing records, using every tool at our disposal,” he said.

While Price said the average crypto user has every right to preserve their financial privacy, he noted that Bitcoin Fog’s website, corporate and social media communications and branding suggested it was actively soliciting funds from criminal enterprises.

“Privacy is a fine line. If you’re not taking any steps whatsoever to prevent child sexual abuse material, darknet markets, ransomware, the Bitfenix hack, things of that nature for using your service, you’re actually, in my mind, as bad or worse than the people involved in the actual illicit activity,” Price said.

See also: Man Who Laundered Billions in Bitcoins From Bitfinex Says He Used Bitcoin Fog

Many people in the crypto industry — whether or not it accepts Sterlingov’s guilty verdict — would likely disagree. Crypto operates on the principle of credible neutrality, the idea that protocols should not be able to discriminate against or censor users, just as a dollar bill does not care who uses it. And, perhaps unfortunately, the only way to ensure that platforms remain accessible for all is to ensure they can also facilitate the worst actors.

Ekeland might see that as a frightening prospect, but a wrongful conviction based on “circumstantial” evidence as worse.

“I think this is really scary for anyone involved in bitcoin,” he said of TK. “The underlying assumptions that people were making about the traces is essentially that the flow of funds equals the flow of control.”

Share. Facebook Twitter Pinterest LinkedIn Tumblr Email
NBTC

Related Posts

Trump Administration Pressed for Answers on “Ongoing” Operation Chokepoint 2.0

17/06/2025

Why this Bitcoin-Friendly Lawmaker Carries a US Debt Clock in His Pocket

17/06/2025

Trump’s Suspended Tariffs Reinstated by US Appeals Court Ruling – What’s Happening? Here Are the Details

17/06/2025

An Event That Will Make Headlines is Expected to Be Announced Later Today

17/06/2025
Add A Comment

Comments are closed.

Top Posts
Get Informed

Subscribe to Updates

Get the latest news from NBTC regarding crypto, blockchains and web3 related topics.

Your source for the serious news. This website is crafted specifically to for crazy and hot cryptonews. Visit our main page for more tons of news.

We're social. Connect with us:

Facebook X (Twitter) LinkedIn RSS
Top Insights

Dow Jones up 200 points as jobs data outshines trade fears

18/06/2025

VeChain Is Just Getting Started, Says Sunny Lu—$VET to Power the New Digital Economy

18/06/2025

Omnia Protocol Partners with Flare Networks to Unlock More Private & interoperable Web3 Future

18/06/2025
Get Informed

Subscribe to Updates

Get the latest news from NBTC regarding crypto, blockchains and web3 related topics.

Type above and press Enter to search. Press Esc to cancel.