If the prosecution doesn’t produce clear evidence as Sterlingov’s case unfolds, it may have to rely on the more indirect digital connections between Sterlingov and Bitcoin Fog that it describes in the statement of facts assembled by the IRS’s criminal investigations division, much of which was based on cryptocurrency tracing techniques. That statement shows a trail of financial transactions from 2011 allegedly linking Sterlingov to payments made to register the Bitcoinfog.com domain, which was not Bitcoin Fog’s actual dark-web site but a traditional website that advertised it.
The funds to pay for that domain traveled through several accounts and were eventually exchanged from Bitcoin for the now-defunct digital currency Liberty Reserve, according to prosecutors. But the IRS says IP addresses, blockchain data, and phone numbers linked with the various accounts all connect the payments to Sterlingov. A Russian-language document in Sterlingov’s Google Account also described a method for obfuscating payments similar to the one he’s accused of using for that domain registration.
Sterlingov says he “can’t remember” if he created Bitcoinfog.com and points out that he worked at the time as a web designer for a Swedish marketing company, Capo Marknadskommunikation. “That was 11 years ago,” Sterlingov says. “It’s really hard for me to say anything specific.”
Even if the government can prove that Sterlingov created a website to promote Bitcoinfog.com in 2011, however—and Ekeland argues even that is based on faulty IP address connections that came from Stertlingov’s use of a VPN—Ekeland points out that’s very different from running the Bitcoin Fog dark-web service for the subsequent decade it remained online and laundered criminal proceeds.
To show Sterlingov’s deeper connection to Bitcoin Fog beyond a domain registration, the IRS says it used blockchain analysis to trace Bitcoin payments Sterlingov allegedly made as “test transactions”…
