Bitcoin mixing is a way to gain a little privacy for your blockchain transactions. To make it more difficult to see who sent Bitcoin to whom tokens are sent through a “tumbler” or Bitcoin mixer. This is a set of private crypto pools. The resulting tokens are then taken out and sent back to the original owner, for a fee. There is nothing wrong with doing this, provided that you are not using the service to launder ill-gotten gains. Such is the issue as Roman Sterlingov awaits trial. He is accused to running Bitcoin Fog, a service that helped folks like North Korean hackers launder their crypto gains. Prosecutors refer to Bitcoin Fog as the “go to” service for criminals wanting to hide their money. A novel aspect of this trial will be what we are calling a Bitcoin Fog social media defense.
The Bitcoin Fog story goes back a decade. In December of 2013 the Bitcoin Fog service was used to launder crypto from the Sheep Market crypto robbery. In February of 2015 the same service laundered 7,170 BTC stolen from the Chinese Bter.com exchange. Over all of those years as Bitcoin Fog is believed to have continued to launder Bitcoin, authorities had been looking for who was responsible. They arrested their suspect in April of 2021. Roman Sterlingov goes on trial soon specifically for laundering 1.2 million BTC nearly a decade ago.
How to Defend a Money Laundering Operation
Sterlingov’s lawyers have already started their defense by attacking the crypto tracking service that gathered the evidence against their client. Using podcasts and social media they are saying that the processes that investigated the blockchain to bring Sterlingov to justice are “unscientific and unreliable.” This is an old tactic that defense lawyers use. Attack the credibility of those who testify against their client. Chainalysis is the service that helped track down Sterlingov. Is what they do scientific and reliable or not? The way that the prosecution can assert the reliability of testimony is by producing the credentials of their expert witness. And they may have to show step by step how their process works. None of this part will involve podcasts or social media, however.
Who Is Chainalysis?
As noted by Crunchbase, Chainalysis provides Bitcoin businesses with software for fighting money laundering. Governments all over the world are among their clients. Its full range of tools help identify offenders, visualize data, share results with stakeholders, and assess system risk. Its tools help track down Bitcoin extortion payments and identify cybercriminals. Basically, these folks are at the top of the food chain when it comes to tracking down cybercriminals.
Can a Bitcoin Fog Social Media Defense Work?
The first thing to realize in regard to the defense in this case is that testimony has to be given in court. What is posted on social media and said in podcasts is hearsay and not admissible in court. Any assertions that the Chainalysis system is not reliable need to be backed up by expert testimony. In this regard, the trial date was recently moved back by months to allow Sterlingov and his lawyers to look at confidential Chainalysis data. The burden of proof in this case rests with the prosecution. They will need to explain to the jury in understandable terms just how they tracked down Sterlingov and connected him to Bitcoin Fog. They will need to effectively counter any arguments made by defense lawyers to the satisfaction of the jurors.
The end result in this kind of case commonly depends on the abilities of the lawyers involved to make a clear case and support that case with compelling evidence. Many times less is better than more as jurors are human and can only absorb so much technical jargon before falling asleep!
The importance of this trial lies not only in whether Sterlingov is convicted or not but in whether or not Chainalysis systems and processes can continue to be used to bring cybercriminals to justice.
SlideShare Version – Bitcoin Fog Social Media Defense