The IRS that the blockchain analysis was vital to the Investigation. Entrepreneur of the Bitcoin ecosystem raises doubts about the official version of events.
United States federal agents arrested Roman Sterlingov, facing charges related to his alleged involvement in the Bitcoin Fog mixer. This individual faces accusations regarding money laundering and unlicensed money transmission. Around USD 336 million would have passed through this platform throughout its ten years of existence.
The arrest of this Russian and Swedish citizen occurred on April 27, in Los Angeles, California, and issued by the Court of the District of Columbia.
As described in another document of the judicial entity, the arrest occurred after an extensive investigation led by the Internal Revenue Service (IRS). Through the analysis of the blockchain, Internet provider records, financial records and emails, among other elements, it would have come to find the identity of Sterlingov.
According to the IRS, the detainee’s earnings, obtained by charging commissions for the use of the mixer, would reach $ 8 million, which took into account the price of bitcoin (BTC) at the time of each transaction.
A detailed analysis of the Bitcoin Blockchain was vital in the Investigation
The investigation report, written by IRS agent Devon A. Beckett, explains every detail about how the commercial service of blockchain analytics companies played a role to achieve the arrest. “These companies create large databases of group transactions through the analysis of data underlying virtual currency transactions,” explains the agent.
Also, the IRS’s analysis would have determined the source of the funds that arrived at Bitcoin Fog and to which addresses the mixed BTCs went. At least 51 darknet markets are on the list, including Agora Market, Silk Road, Evolution Market, and AlphaBay.
Beckett also said :
“Based on my background and experience, including experience in other darknet investigations, darknet markets exist primarily for the trafficking of illegal narcotics and other illegal goods and services.”
On the sole basis of his “training and experience”, in the report, the broker also said speculatively that the trading operations in those markets, with Bitcoin Fog as an intermediary, constituted “specified illegal activities”. He mentions the distribution of narcotics, stolen personal information, and the sale of computer hacking tools.
According to the official report, it was also the analysis of the blockchain and other elements that made it possible to identify Sterlingov as the leading operator of Bitcoin Fog. On September 29, 2011, the detainee created an account on the Mt. Gox exchanges with his real name.
From that track, through the analysis of transactions and coincidences in financial statements, it would have determined that he was the one who registered the domain of the mixer. However, he tried to keep that operation anonymous.
According to the report, Sterlingov also registered within several centralized exchanges with his accurate details. By following the tracks of coins coming from several of these exchanges, the relationship with Bitcoin Fog could serve as a tool to unveil the crime.
By: Jenson Nuñez