Regulation
Bitcoin Fog Founder Sentenced To 12.5 Years for $400M Crypto Laundering Scheme
Bitcoin Fog founder Roman Sterlingov has been sentenced to 12.5 years in prison for operating a major cryptocurrency mixing service that laundered over $400 million in criminal proceeds.
The Washington federal court ruling was handed down by U.S. District Judge Randolph Moss, who also ordered the forfeiture of $395 million in assets, including seized cryptocurrency and Sterlingov’s interest in a Bitcoin wallet with over $103 million in Bitcoin.
Bitcoin Fog Founder Sentenced To 12.5 Years
Roman Sterlingov, a Russian-Swiss national, was convicted of multiple charges related to operating Bitcoin Fog, a cryptocurrency “mixer” that obscured the origins of digital currency transactions. The prosecution stated that Bitcoin Fog was a convenient way for criminals to launder the money obtained from criminal activities, including those related to narcotics on the darknet markets.
After a jury trial in March, Sterlingov was found guilty of conspiring to launder money, money laundering, and operating an unregistered money transmitting business.
Bitcoin Fog allowed users to combine or “mix” digital assets, making it harder to trace individual transactions. Prosecutors said that Sterlingov’s service functioned for approximately ten years and had aimed to enable untraceable transactions to support money laundering activities on an extensive scale.
Principal Deputy Assistant Attorney General Nicole M. Argentieri said that Roman Sterlingov “laundered over $400 million in criminal proceeds through Bitcoin Fog” and noted that the sentence demonstrates the Justice Department’s efforts to prosecute those who facilitate criminal conduct.
Judge Considers Deterrence in Sentencing
Judge Randolph Moss imposed a 12.5-year sentence, which was substantially less than the 30 years requested by the prosecution for the Bitcoin Fog founder. Prosecutors had argued for a severe penalty due to the prolonged and extensive nature of the scheme. “This is criminal activity of a staggering scale over a prolonged period of time,” said prosecutor Christopher Brown.
Nonetheless, Judge Moss said that a life sentence is excessive given the offense, although he emphasized the need for a significant deterrent in the cryptocurrency sector given that it is often difficult to follow the funds.
Roman Sterlingov said during the sentencing hearing, “I am sorry for any harm that may have come from my actions.” The defense had requested the judge to impose a maximum of 7.5 years saying there was no direct proof of Sterlingov contributing to the running of the Bitcoin Fog. Concurrently, Sterlingov’s attorney, Tor Ekeland, argued that there were no service logs or eyewitness statements that would have placed his client in control of the mixing service.
Recent Sentences In The Crypto Industry
The sentencing of Sterlingov comes amid scrutiny of the crypto industry, as other high-profile cases involving fraud and money laundering unfold.
Recently, Caroline Ellison, former CEO of Alameda Research, received a two-year prison sentence for her role in the FTX fraud, which defrauded investors out of billions.
In that case, key witnesses, including Ellison and former FTX engineer Nishad Singh, received lighter sentences or avoided prison time by cooperating with prosecutors against FTX founder Sam Bankman-Fried.
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Hawk Tuah girl Hailey Welch, known for her association with the controversial $HAWK token, has been cleared of any wrongdoing after a lengthy investigation by the U.S. Securities and Exchange Commission (SEC). The SEC has decided not to press charges against Welch in connection with the rapid rise and subsequent collapse of the meme-based cryptocurrency.
US SEC Investigation Into Hawk Tuah Girl Concludes Without Charges
The SEC had launched an investigation into the $HAWK token after its dramatic price drop. The token, which was linked to Welch’s viral persona, initially saw a market cap surge to $490 million before crashing by over 90%. Investors who were impacted by the crash filed a lawsuit against those behind the project, alleging that the coin had been promoted and sold without proper registration.
Hawk Tuah girl Hailey Welch, who cooperated fully with the investigation, expressed relief after the SEC’s decision. “For the past few months, I’ve been cooperating with all the authorities and attorneys, and finally, that work is complete,” Welch told TMZ.
Her attorney, James Sallah, confirmed that the SEC had closed the case without any findings against her, adding that there would be no monetary sanctions or restrictions on Welch’s future involvement in cryptocurrency or securities.
This Is A Developing News, Please Check Back For More
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Barely a week after hinting at launching an algorithmic USD stablecoin, Sonic Labs is shuttering its plans. Sonic Labs co-founder Andre Cronje revealed that incoming stablecoin regulation in the US contributes to the change of stance.
Sonic Labs Makes U-Turn Over Algorithmic USD Stablecoin
In mid-March, Sonic Labs disclosed plans for a yield-generating algorithmic stablecoin for its blockchain. However, new developments in the US regulatory landscape are forcing the company to ditch its algorithmic stablecoin ambitions.
Sonic Labs co-founder Andre Cronje confirmed the change in direction via an X post following the release of the full draft of the STABLE Act by Congress for clearer oversight. According to the text, lawmakers are pushing for a two-year moratorium on algorithmic stablecoin, souring Sonic Labs plans.
Unlike mainstream stablecoins backed by fiat or other commodities, algorithmic stablecoins rely on smart contracts to maintain their peg. The 2022 implosion of Terra’s ecosystem following the de-pegging of its TerraUSD (UST) algorithmic stablecoin stunned regulators.
“We will no longer be releasing a USD-based algorithmic stablecoin,” said Cronje.
In a light-hearted note, community members teased potential strategies for Sonic Labs to sidestep incoming stablecoin regulation. Apart from the loophole of launching the algorithmic stablecoin before the regulation goes live, Cronje teased an algorithmic dirham that will be denominated in USD.
Industry Players Are Bracing For New Stablecoin Regulations
Stablecoin issuers are steeling themselves for incoming stablecoin regulations in the US. While the GENIUS Act and STABLE Act continue to inch forward, there are common denominators in both bills.
For starters, there is the requirement for equivalent reserves at a 1:1 ratio with both bills steering clear of algorithmic stablecoins. The White House is favoring the GENIUS Act over the STABLE Act as lobbyists rally to stifle the possibility of a Conference Committee.
Authorities are targeting stablecoin regulation to reach Trump in two months as issuers jostle for position. Tether, Circle, and Ripple are staking their claims to lead the US government’s ambitions to rely on stablecoins to maintain the dollar’s dominance.
Aliyu Pokima
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
The Federal Deposit Insurance Corporation (FDIC) has updated its guidelines, enabling banks to engage in cryptocurrency-related activities without seeking prior approval. This new policy shift signals a change in the FDIC’s approach to the growing role of digital assets in the banking sector.
New FDIC Guidelines on Crypto-Related Activities
The FDIC has issued a new Financial Institution Letter (FIL-7-2025), which provides updated guidance for banks looking to engage in cryptocurrency activities. The new guidance rescinds the previous policy set out in FIL-16-2022, which required banks to notify the FDIC before engaging in such activities.
Under the new rules, banks can now participate in permissible crypto-related activities without waiting for FDIC approval, as long as they manage the risks appropriately.
This change is seen as a shift in the FDIC’s stance, following the agency’s earlier stance that required prior approval for crypto engagements. FDIC Acting Chairman Travis Hill expressed that this new approach aims to establish a more consistent framework for banks to explore and adopt emerging technologies like crypto-assets and blockchain.
“With today’s action, the FDIC is turning the page on the flawed approach of the past three years,” said Hill in a statement.
This Is A Developing News, Please Check Back For More
Kelvin Munene Murithi
Kelvin is a distinguished writer with expertise in crypto and finance, holding a Bachelor’s degree in Actuarial Science. Known for his incisive analysis and insightful content, he possesses a strong command of English and excels in conducting thorough research and delivering timely cryptocurrency market updates.
Disclaimer: The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
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