Roman Sterlingov, the man behind cryptocurrency mixer BitcoinFog, is fighting his potential 30-year prison sentence after being convicted on multiple money laundering charges.
In a 37-page sentencing memorandum filed in the U.S. District Court for the District of Columbia, Sterlingov's lawyers argued that the 30-year and 20-year sentences sought by prosecutors and the probation department, respectively, “significantly exceed” sentences imposed in similar cases.
The defense argued that the recommendations were disproportionately high due to the “cumulative effect” of different weights that punished the same conduct – specifically, different aspects of the operation of a large-scale money laundering operation.
Money laundering conviction
Sterlingov was convicted earlier this year on multiple charges related to running BitcoinFog, a service that allegedly facilitated the laundering of more than $47 million in criminal proceeds.
The government portrays him as the central figure in a sophisticated scheme to anonymize Bitcoin transactions, making it effectively harder for law enforcement to track illegal activity such as drug trafficking and other criminal enterprises.
Prosecutors alleged that Bitcoin Fog, which Sterlingov ran from 2011 to 2021, was used to launder approximately $400 million worth of Bitcoin linked to illegal activities, including drug trafficking, identity theft and cybercrime.
Judge Randolph Moss, who is presiding over the case, had originally scheduled Sterlingov's sentencing for August 21. However, the court will first hear arguments regarding the government's efforts to seize assets related to Bitcoin Fog, including 1,354 bitcoins that have been dormant since 2012, and a possible monetary judgment of $395 million.
Circumstantial evidence
However, Sterlingov's lawyers noted that the case against him relied heavily on circumstantial evidence, and that key elements such as BitcoinFog's servers, server logs, private keys and ledgers were not introduced as evidence during the trial.
The defense stressed that Sterlingov has no criminal record and has otherwise led an exemplary life, and argued that the jury's verdict was closer to aiding and abetting rather than directly running BitcoinFog, suggesting Sterlingov's role was less significant than the prosecution had made out.
The defense further argued that the sentencing guidelines were heavily influenced by the amount of money involved in the crimes and did not accurately reflect Sterlingov's guilt.
The company argued that the guidelines’ focus on the value of the laundered funds in this case is misplaced and fails to take into account the fact that Sterlingov did not personally profit from the transactions and that much of the funds passed through BitcoinFog without his direct involvement.