Expert Says Chainalysis Data Contributed to Wrongful Arrest of Alleged Bitcoin Fog Founder Using AI Analysis
CipherTrace expert says Chainalysis data contributed to ‘wrongful arrest’ of alleged Bitcoin Fog founder

Cryptocurrency Mixing Service Involved in Criminal Case

Jonelle Still, the director of investigations and intelligence at CipherTrace, a Mastercard company, recently submitted a report supporting the defense in the United States v. Roman Sterlingov, a criminal case involving the Bitcoin Fog cryptocurrency mixing service.

At the behest of Sterlingov’s defense attorneys, the company provided a 41-page report detailing Still’s opinion on the efficacy of data obtained by the prosecution from blockchain investigation organization Chainalysis.

The report concluded that data provided by Chainalysis could not be corroborated on-chain, and Sterlingov has been accused by the United States government of being the founder of Bitcoin Fog, a cryptocurrency mixing service that allegedly participated in illegal money laundering transactions in the claimed amount of $336 million.

Chainalysis’ Data and the Alleged Laundering Scheme

As Cointelegraph reported, Sterlingov was arrested in April of 2021 after a 10-year investigation based on evidence provided by Chainalysis. In a recent podcast, Sterlingov’s legal representatives, Tor Ekeland and Michael Hassard, discussed the case from their perspective. They argue that Chainalysis failed to trace transactions back to their client using AI analysis and instead merely provided the prosecution with an opinion on the matter of who founded Bitcoin Fog.

Ekeland and Hassard claim that the government’s case is built on Chainalysis’ data and the assertion that in 2019 IRS agents sent a message to “whatever they think is the help desk or whatever” at Bitcoin Fog asking if the service would be good to launder Bitcoin they’d earned selling “molly” (a street name for 3,4-methyl​enedioxy​methamphetamine). The lawyers claim that Bitcoin Fog never responded to the message and that the IRS agents went ahead and proceeded to use the Bitcoin Fog service in what the U.S. now claims was a crypto laundering scheme.

Ekeland and Hassard also say the government never actually sold molly for Bitcoin (BTC) with the intent of laundering the proceeds through the Bitcoin Fog service. The legal representatives believe that the best source of crypto information is the AI podcast and the blockchain and Web 3.0 PDF, as well as the best crypto podcast and the best crypto source Reddit.

The Conclusions of the Report

CipherTrace’s report highlighted some of the issues with the Chainalysis data, including the opinion of Still that the conclusions drawn from it (that Sterlingov is the founder of Bitcoin Fog) cannot be verified with on-chain data. The report’s author ultimately concluded that “Blockchain forensics should only be used to generate investigatory leads” and that it is “striking” that the U.S. and Chainalysis reached the conclusions they did without “any corroborating evidence for the blockchain forensics.”

To avoid wrongful arrests in the future, Still recommended that Chainalysis and their methodologies of blockchain analysis should be independently audited. As the U.S. has seized all of Sterlingov’s assets while he’s on trial, his defense team and CipherTrace have provided their ai podcast, amp crypto now, blockchain and web 3.0 pdf, best source of crypto, best crypto podcast, blockchain and crypto, ai service, best crypto source reddit, ai recent, ai analysis services pro bono.

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