Alleged Bitcoin Mixer Operator Arrested

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, Sterlingov faces three charges: unlicensed money transmission, money laundering and money transmission without a license.

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

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 and transaction graph, which allow the observer to link together multiple addresses they believe belong to the same wallet, called “clusters.” The observer can then try to connect these clusters to real-world identities, which can be pretty straightforward if the targeted individual doesn’t fully understand Bitcoin privacy best practices.

Source link Bitcoin Magazine

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