{"id":16838,"date":"2021-04-28T15:10:08","date_gmt":"2021-04-28T15:10:08","guid":{"rendered":"http:\/\/ci0281c36ea0002458"},"modified":"2021-04-28T15:10:08","modified_gmt":"2021-04-28T15:10:08","slug":"alleged-bitcoin-mixer-operator-arrested","status":"publish","type":"post","link":"https:\/\/bitcoinmagazine.com\/culture\/alleged-bitcoin-mixer-operator-arrested","title":{"rendered":"U.S. Officials Arrest Alleged Operator Of Mixing Service Bitcoin Fog"},"content":{"rendered":"
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U.S. officials have arrested Roman Sterlingov, a citizen of Russia and Sweden, after identifying him as the alleged operator of custodial bitcoin mixing service Bitcoin Fog. According to an arrest warrant<\/a>, Sterlingov faces three charges: unlicensed money transmission, money laundering and money transmission without a license.<\/p>\n

An affidavit filed by a special agent<\/a> of the Internal Revenue Service revealed that Sterlingov was identified through blockchain analysis. The tactic used by law enforcement also allowed it to \u201c[confirm] that over 1.2 million BTC … have been sent through [Bitcoin Fog] since the site was launched in 2011,\u201d totaling around $336 million at the time of the transactions.<\/p>\n

An observer can obtain a lot of information from a publicly-accessible ledger like Bitcoin. It can be analyzed using heuristics such as the common-input-ownership<\/a> and transaction graph<\/a>, which allow the observer to link together multiple addresses they believe belong to the same wallet, called \u201cclusters.\u201d The observer can then try to connect these clusters to real-world identities, which can be pretty straightforward if the targeted individual doesn\u2019t fully understand Bitcoin privacy best practices<\/a>.<\/p>\n

Bitcoin mixing<\/a> is one way users can break the many transaction heuristics. The practice consists of literally mixing one\u2019s funds with other people\u2019s with the intent of obfuscating those coins\u2019 histories. And although mixing doesn\u2019t erase the coins\u2019 past trail, it can provide good forward-looking privacy, which helps preserve Bitcoin\u2019s censorship-resistant nature<\/a>.<\/p>\n

Governments have been used to controlling money\u2019s issuance and its peoples\u2019 transactions for centuries. It isn\u2019t, therefore, a surprise that in this case the government is working to close down a mixing operation, which provides an option for Bitcoiners to reclaim their spending privacy and help the separation of money and state<\/a>. And although the State can claim that mixing is characterized as an unlicensed money transmission when conducted through a custodial service like Bitcoin Fog, it\u2019s doubtful that it could argue the same about alternative methods employed by Bitcoiners such as CoinJoin<\/a>, which ultimately just facilitates Bitcoin transactions.<\/p>\n","protected":false},"excerpt":{"rendered":"

U.S. officials have arrested the alleged operator of Bitcoin Fog, a custodial bitcoin mixer that it says processed over 1.2 million BTC.<\/p>\n","protected":false},"author":2572,"featured_media":5744,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[33],"tags":[1722,3060,736,219],"class_list":{"0":"post-16838","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-culture","8":"tag-arrest","9":"tag-bitcoin-fog","10":"tag-bitcoin-mixer","11":"tag-regulation"},"author_data":{"id":2572,"name":"Namcios","nicename":"namcios","avatar_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/12\/pfp-96x96.png"},"featured_image_url":"https:\/\/bitcoinmagazine.com\/wp-content\/uploads\/2024\/11\/knapsack-and-unequal-coinjoin-transaction-amounts.jpg","_links":{"self":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/16838","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/users\/2572"}],"replies":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/comments?post=16838"}],"version-history":[{"count":0,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/posts\/16838\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media\/5744"}],"wp:attachment":[{"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/media?parent=16838"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/categories?post=16838"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitcoinmagazine.com\/wp-json\/wp\/v2\/tags?post=16838"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}