Roman Sterlingov was arrested by U.S. authorities on suspicion of laundering more than 1.2 million bitcoins (worth $336 million). Sterlingov is believed to be the administrator of a "mixing" service called Bitcoin Fog, which was used to hide transactions so that payments could not be traced.

Stalingov, a resident of Russia and Sweden, was arrested Tuesday at Los Angeles International Airport; according to IRS estimates and Wired, Stalingov is believed to have personally received $8 million worth of bitcoin fees. He is charged with unlicensed money transfer, money laundering, and unlicensed money transfer in the District of Columbia.

Bitcoin Fog is particularly problematic for law enforcement organizations seeking to track down illegal activity taking place on the dark web; the IRS has previously used undercover agents to test the site for involvement in such activity and to launder money by selling ecstasy Bitcoin Fog to the site. It is believed that $78 million was spent on dark websites like Silk Road and AlphaBay.

Stalingoff's arrest is a useful reminder that while Bitcoin may appear to be anonymous, it is quite the opposite. Transactions are permanently stored on the blockchain and can be discovered during an investigation. Bitcoin fog users are probably feeling a little uneasy right now. If any records were kept by Sterling Orb, they are likely to be in the hands of the federal government by now.

This is not the first time someone has been arrested for operating a bitcoin blending service, or cryptocurrency tumbler; in February 2020, Ohio resident Larry Dean Harmon was fined $60 million in a civil suit brought by the Financial Crimes Unit of the US Treasury Department . He allegedly operated a bitcoin mixer called Helixm and laundered over $300 million in funds.