Security News > 2021 > May > Identifying the Person Behind Bitcoin Fog

The person behind the Bitcoin Fog was identified and arrested.

Bitcoin Fog was an anonymization service: for a fee, it mixed a bunch of people's bitcoins up so that it was hard to figure out where any individual coins came from.

Most remarkable is the IRS's account of tracking down Sterlingov using the very same sort of blockchain analysis that his own service was meant to defeat.

The complaint outlines how Sterlingov allegedly paid for the server hosting of Bitcoin Fog at one point in 2011 using the now-defunct digital currency Liberty Reserve.

It goes on to show the blockchain evidence that identifies Sterlingov's purchase of that Liberty Reserve currency with bitcoins: He first exchanged euros for the bitcoins on the early cryptocurrency exchange Mt. Gox, then moved those bitcoins through several subsequent addresses, and finally traded them on another currency exchange for the Liberty Reserve funds he'd use to set up Bitcoin Fog's domain.

Based on tracing those financial transactions, the IRS says, it then identified Mt. Gox accounts that used Sterlingov's home address and phone number, and even a Google account that included a Russian-language document on its Google Drive offering instructions for how to obscure Bitcoin payments.

News URL

https://www.schneier.com/blog/archives/2021/05/identifying-the-person-behind-bitcoin-fog.html