Bitcoin transaction secret services are revealed one after another

money laundering

Bitcoin transaction secret services are revealed one after another

A Swedish-Russian citizen has been accused of running a multimillion-dollar bitcoin laundering service over the years after tracking his transactions since 2011.
According to the Cointelegraph, after analyzing blockchain data over a 10-year period, US authorities have arrested the mastermind of the service known as Bitcoin Fog, for allegedly hiding Dark Net bitcoin transactions.
U.S. officials have issued a stern warning to other users of illegal blockchain services that:

Whatever you do today may soon become apparent and overwhelm you, because “these activities will remain on the general ledger forever” and advanced analytics technology can track the crime that someone committed years ago.

For almost a decade, Bitcoin Fog allowed users to hide the source and destination of their digital assets. But the US Internal Revenue Service (IRS) has accused Roman Sterlingov, a Russian-Swedish citizen, of selling more than 1.2 million bitcoins worth $ 336 million while managing the website. Has laundered money.
Sterlingov was arrested in Los Angeles on Tuesday, April 27. The US Internal Revenue Service estimates that he received a commission of between 2 and 2.5 percent per transaction to conceal bitcoin rejections. That amount was worth about $ 8 million at the time, but is growing exponentially today.
U.S. officials estimate that at least 23 percent of the bitcoins transferred through the cryptocurrency service went to drug markets in Darknet, such as the Silk Road website.
Sterlingov’s arrest was the product of the efforts of officials who obsessively analyzed the network of bitcoin-related bitcoin transactions since 2011 and used the bitcoin blockchain to identify the site’s operator.
Sterlingov launched the website in late 2011 under a Japanese nickname “Happy New Year” and claimed that Bitcoin Fog ruled out any possibility of customers paying and proving any link between a deposit and a withdrawal on the service. It makes it impossible.

Bitcoin transaction secret services are revealed one after another

In 2019, undercover agents of the US Internal Revenue Service contacted Sterlingov through this platform and pretended that they wanted to launder the profits from the sale of ecstasy pills. Transactions were processed without any response.
The agency was able to determine that Sterlingov had paid for the hosting of the Bitcoin Fog server using the now defunct Liberty Reseve digital currency. This information allowed them to find out when Sterlingov bought the Liberty Reserve currency using bitcoins transferred from the now-defunct Mt. Gox exchange.
From here, the US Internal Revenue Service was able to identify the home address and phone number that Sterlingov had registered in his account, and finally identified a Google Drive account that contained instructions on how to purchase Liberty Reserve coins. Reserve) by him.
Jonathan Levin, co-founder of the blockchain criminology company Chainalysis, said:

This is another example of how investigators can use digital currency transparency to track illegal cash flows with the right tools.

Sarah Meiklejohn, a computer scientist, said:

Despite blockchain analysis, what we keep saying is that all of this activity is permanently recorded in this notebook, and if you did something wrong 10 years ago, you may be arrested and detained today.

Despite Sterlingov’s arrest, the Bitcoin Fag website is still online and it is not clear who is running the site now.

Bitcoin transaction secret services are revealed one after another

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