Analytical firm CipherTrace, at the request of the defense, disputed the evidence of the involvement of Russian Roman Sterlingov in the management of the Bitcoin Fog cryptocurrency mixer, obtained by the court based on Chainalysis data.
According to experts, the blockchain transaction tracking tools used in the case were not used for their intended purpose. However, they formed the basis for the prosecution’s conclusion that Sterlingov was the operator of the service, which allegedly participated in the laundering of about $336 million through cryptocurrency.
CipherTrace called this conclusion erroneous. They cited that the data provided by Chainalysis and their blockchain analysis methodology are based on experimental algorithms and have never been independently audited.
“There is no evidence online that Sterlingov was the organizer of Bitcoin Fog,” the report says.
In order to properly establish the role of the defendant, the government needs to access the servers of the mixer and the seed phrases from his wallets, but this has not been done. According to experts, in the absence of these factors, blockchain analysis data is insufficient.
“Because the Chainalysis attribution is not verifiable, it should not be used in court,” CipherTrace concluded.
Recall that the US authorities arrested the alleged operator of the bitcoin mixing service Bitcoin Fog Roman Sterlingov in April 2021. He is accused of laundering more than 1.2 million BTC ($336 million at the time) and providing payment services without a license.
The investigation claims that they were able to prove Sterlingov’s link to the Bitcoin Fog domain through his transactions in the Liberty Reserve illegal data sale system and accounts on the bankrupt Mt.Gox exchange.
The identification of him as the main operator of the mixer was also based on the analysis of bitcoin transactions, financial records, ISP records and emails.
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