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Secret Software Convictions The Roman Sterlingov Nightmare · The Aaron Day Show

• Its competitor ran the same data and got a sixty four percent discrepancy and called the government's use of it reckless. The prosecutor who won the case now works at that company. The IRS investigators who built the case, their firm got bought by that company five months after the arrest. The man in a cell, a dual Russian Swedish citizen who had never set foot in the United States until federal agents grabbed him at LAX on his way to flight school. His name is Roman Sterling off. And in twenty seven days, May twelve at nine thirty a.m., the D.C. Circuit Court of Appeals decides whether secret, unaudited, privately owned software can send an American or anyone standing on American soil to prison. If Roman loses, you are next, because once a black box can convict one man, it can convict anyone. Tonight, I'm joined by three people who have taken this fight all the way to the federal appellate bench. Tor Eklund, the man who called Chainalysis the Theranos of blockchain forensics, nationally known CFAA defense attorney, one of the first lawyers in America to accept Bitcoin. And his co-counsel, Mike Hazard, the lawyer who picked up the phone, took the case with no one else would and has been in the trenches ever since. And Jeff Fischbach. Hi, Jeff. I don't have a lot of background on you, so I'm happy to talk about that. There's standing between Roman Sterlingoff and a life destroyed by an algorithm. They're standing between you and a justice system where the evidence against you is a trade secret. This is the test case. This is the line. This is the secret software convicting innocent Americans. So Tor, Mike, Jeff, welcome to The Aaron Day Show. Thank you. Thanks for having us. Thank you. Excellent. Just for the record, just for the record, Jeff is the forensic investigator we worked with for years. He's a digital forensic investigator, and he was our chief digital forensic expert on the case. And so that's why he's here today. Excellent. Well, certainly a lot to talk about in that regard. Actually, I've talked about chain analysis quite a bit in different contexts, not related to these legal proceedings, but more to talk about the extent to which chain analysis is being used to track people's transactions. And I had last year, three separate people come to me either with a business dispute or in a divorce. And I learned that you can now, as a private investigator, get a license in chain analysis. And people are using the software in these court cases And based on kind of now what I understand from this case, this may actually be junk data, but it's actually proliferating. So chain analysis is becoming this kind of standard part of legal proceedings, not just criminal proceedings, but civil proceedings. Yeah. And, you know, that's one of the things that was problematic for us with Roman's case. They used chain analysis in Roman's case to say to a the investigators use it to make an attribution of him as the operator of Bitcoin fog, even though there's no evidence. uh direct evidence uh of him ever operating it and for those of you don't know bitcoin fog was a bitcoin mixer um that would basically sort of mix up your bitcoin address so um it was untraceable because if you do a transaction on the blockchain you can follow the transaction your name's not on the blockchain right there's no personal identifying information on the blockchain but the transaction's there and you can follow it and so If you take out your Bitcoin through an exchange like Coinbase or whatever and flip it to US dollars, usually your name gets attached to the transaction. And so they use it to trace it there. But so what they said they use Chainalysis mainly for in this case is to say, well, Bitcoin Fog laundered four million dollars worth of drug money through things like Silk Road. And when we do all these traces with it, we find Roman's name like whatever, fourteen addresses down the line and the only name there. um and that's actually the main reason we think he's in jail right now is just because he was the only one back in in sweden putting his name on you know his mount gox account kind of thing like he's in jail because he was a boy scout and he followed the rules not by the way not not that he was the only one involved in any of the transactions just he was i i and matter of fact i think tor asked the question uh under cross um whether they had bothered to you know to look for anyone else and i believe the answer was he's the only one that we could identify it seems like there was some parallel construction in this case as well yeah so to take a step back so let's so who is roman sterling off what's what's his know background and you know how did he get involved in all of this So Roman's a really good guy. And I think that's what we got to get off first. He was born in Varnaz, Russia, which is in the middle of Russia, is deep into Russia. And when he was, I think it was about fourteen years old, his family, with his mother, left his father behind in Russia and moved to Sweden. So he was a new immigrant to Sweden. He didn't know any Swedish. He barely knew English. And he tried to find his way in high school. While he's doing that, he kind of found a little bit of know home in the computer world he's a little bit introverted at the time he's been working on himself ever since but he really got into computers at around that time as an introvert in the new country and bitcoin provided him a community and he really talks about that often about how the first time he bought bitcoin back in when it was around thirty cents he met a guy at a bar and they opened up their laptops and he really enjoyed that camaraderie that was fellow nerds And, you know, ever since then, he began to go around to these meetups in Scandinavia and the Baltics. And he had accumulated this Bitcoin in two thousand eleven. I think if I remember correctly, he bought two thousand euros worth from this guy when it was worth thirty cents. By twenty thirteen, twenty fourteen, that amount, the value of it had skyrocketed. The way he described it to us was it was like a wallet. You could spend as much money you wanted out of it and it would never go down. It would keep going up, keep going up. And so he would go to these conferences and he became one of the people at the conferences where if you wanted to buy Bitcoin, mind you, there were no exchanges at the time. You would go find Roman Sterling up and then give him cash and he'd help you set up your wallet and give you some Bitcoin. one of these conferences uh somebody told him that hey you know with the amount of bitcoin you have in your wallet uh you know you're a target for a wrench attack and that's when he first learned what a wrench attack was uh around this time people have started to realize that when you do a transaction there's five pieces of information to go on the blockchain the sender's address the recipient's address the amount of bitcoin that's being transacted the transaction id and the date and time So by having the recipient's address and the transaction ID, you're able to look up the sender's address. And then when you type that into a block explorer, you can see how much Bitcoin is in that account. And if you have a large amount of Bitcoin, you become a target, especially at this time and especially in the areas where he was, which was the Baltics and Scandinavia. So at that time, somebody had also told him that, hey, you know, there's ways to obfuscate your transactions. And one of these ways is Bitcoin fog. So he starts to use Bitcoin fog as part of his personal privacy measures when he's transacting with these people he doesn't know at these conferences. He's using Bitcoin fog to send the money through so as not to expose his own Bitcoin address to help the majority of his funds. When two thousand fourteen, two thousand fifteen come around, we start to see the growth of exchanges where you can transfer funds into U.S. dollars or euros and spend them. So he created a Kraken account and that was a big piece of the government's evidence during trial. He took a large portion of what he had accumulated early on, transacted it through Bitcoin fog and put it into his Kraken account. And the government argues in their prosecution that those funds going into Kraken from Bitcoin five were the Bitcoin five service fees. They were not. The pattern does not look like it is very consistent with somebody who had a large pile of early Bitcoin. But that was a key piece of the government's evidence. They had this entire case and we can get it. We're going to get into the channels and stuff as well. But in twenty twenty one, his life is kind of know he doesn't know what he's gonna do he's just been spending this bitcoin he doesn't have a career so he decides that he wants to become an airline pilot he registers for a uh pilot training course in california and he flies into lax and that's where they arrested him uh after he was arrested he reached out to a cousin of his and his cousin happened to be really good friends with my uh my best friend who's since passed away rest in peace sam sam gives me a call and says hey like uh can can you figure out what's going on here my buddy's cousin just got picked up in la and that was the beginning of our journey on the case and how we got involved with it You know, Mike, it probably should be at least clarified since the government made such a big deal about the flight lessons that he actually he testified to this, that one of the things he was worried about was that he referred to this as his magic wallet, like he couldn't spend enough. It just kept filling itself back up. But what his real concern was, was he had also seen it take deep dives and was worried about a crash. And he thought he really needed to take some of what he had and get himself a career. And being a pilot was something you thought would be a fun career. I just think what's really concerning about this case and why everybody should be concerned, because you could be Roman Sterling off sitting in a jail cell right now, anybody who's done a transaction is. So when they arrest him in April of twenty twenty one at LAX, they basically arrest him for running Bitcoin fog, the mixer for ten years and money laundering, four hundred million dollars worth of drug money that they say went through like Silk Road and Alpha Bay and all this stuff like that. Right. They arrest him. He's got three laptops, three terabytes in storage devices, thumb drives, handwritten notes, a spreadsheet with all of his passwords, all sorts of stuff. He doesn't know he's going to be arrested. He's not thinking he's going to get arrested for running Bitcoin Fog. Not a single piece of evidence anywhere on any of his devices of him ever operating Bitcoin Fog. Not a single piece of evidence in the record anywhere. directly showing him operating bitcoin fog the the unique thing about this case i've never had a case like this right is every single piece of evidence you have to speculate from to get him um As the operator of Bitcoin, I have never had a case like that. I've never had in my twelve, fifteen years of representing, you know, a list hackers. I've never had one get caught. And Jeff and I have talked about this, too, because I don't think he's ever had this happen in any of his twenty, thirty years doing this. Get caught that they didn't leave a freaking trace. somewhere in their devices. And that's just not here. They're basing everything on these speculative traces between addresses that they don't have the private keys for. And, you know, as most people probably know, you need the private key definitively tells you who controls the blockchain address. No private keys, like nothing. It's maddening, this case that way. So I think this is an important part. I just want to make sure that's clear for everyone, which is that, I mean, at this point, you know, I'm not sure Bitcoin fog, even according to current government policy, is even an illegal thing. I think oftentimes we talk about Roman Storm and others and the idea of a mixing service, you know, is that even illegal? That's not even what's at question here or it is to a certain degree. But in this particular instance, Roman Sterlinghoff didn't even create the service that shouldn't even be illegal to begin with. So I mean, we're talking about this is a whole new level here of they've got the wrong guy. On the one hand, the thing that he did isn't illegal anyway. And the methods that they used to prosecute the case, if the precedent stands, it basically opens anyone up to the interpretation of how this chain analysis software works, which, as we'll get into, is really, really, really shaky. Actually, sorry, the evidence that they have that he ran Bitcoin Fog is that he had a server, which they seized and found nothing. But that then was evidence that he hid it. This case is important because this is the case that Chainalysis was built on. You know, through the course of from twenty fourteen when they started investigating this case, all the way up to when he was arrested, Chainalysis was involved the entire way. And they were not told, hey, can you guys try to figure out who runs Bitcoin Fog? They were told, hey, can you prove that Roman Sterlingov operated Bitcoin Fog? And what's disturbing, I think my biggest problem with this whole area of blockchain forensics is it's completely unregulated. There's no standards. Right. And it looks like a lot of like, at least in criminal law, when junk science comes in, like something like fifty one percent of the wrongful convictions that the innocent project gets overturned comes from junk science. And it happens just like this. These people see this area to go rushing in and make money with this forensic stuff. It happened with bite marks, DNA, fingerprinting, all this stuff before there's any standards. And the juries buy this stuff because it's really impressive. It seems really scientific and whatnot. But what we asked Chainalysis expert on the stand, on cross-examination, can you name us your software's error rates? No. have you done any internal error rate analysis no can you tell me it's rate of false positives no can you tell me it's rate of false negatives no can you name me one scientific peer-reviewed paper attesting to the accuracy of your software the answer was no right like so This is one of our big arguments on appeal. This doesn't belong in a federal court. And they tried to hide, like we wanted to see their source code. We wanted to see the full set of heuristics, which is just sort of the guessing algorithm they set up to cluster their data. And they fought us every step of the way as if somehow they were surprised. that they would be challenged in a federal court, yet they willingly chose to go into the law enforcement market. But they seem to have gone into this market, and all they thought about was making money. And they didn't at any point consider, oh, well, is this stuff accurate? Because if they were concerned about getting the right people and innocence, they wouldn't accuracy of their software. The fact that they ended up in a federal court and they answered all those questions and I asked them about the scientific basis for their software and the negative tells you what they were really thinking when they went into this market. But everybody buys into it. like you said they hired they didn't hire the winning prosecutor in the case they hired one of the prosecutors who worked on this case their expert that came in and testified in this case was from dea they've hired people from the fbi they spend a lot of money and they did buy a company but like you said by one of the irs criminal investigators this guy starts a company He uses it to investigate Roman. It gets top billing in the DOJ press release when Roman is arrested. Mind you, the government prosecutor has been talking to the press in a way they shouldn't have been for years before this. So as soon as Roman is arrested, Wired runs a piece. And there's this great DOJ press release. And here's this great company that did so much work um on this case right so five months later chain houses buys the company and we don't see any evidence from that company in any of the discovery in the case or it doesn't even come up in the case right like it you know it to me this is a case where uh profits got put before justice they sorry go ahead oh just gonna say their argument um that just expanding what tor's talking about their argument which also included not even letting us see how they trained officers what materials they used any of that stuff their argument was effectively well if they shared any of this with us people would be able to get away with it when i think any of us here probably anybody watching this knows that there's there's nothing to get away with it's all public data so there's no way that you can change your behavior you wouldn't be able to use bitcoin at all uh if you wanted to quote unquote get away with it so they just didn't want it they didn't want us to see how uncertain their results were i'll be the most generous of everybody here i won't say that it's useless data it's just it's not conclusive data not the way they presented it well one thing i mean is i've had a number of different people on here, a lot of people are not familiar with the court system at all, if you've never actually dealt with it. And specifically, if you've never dealt with a criminal case, where you're on the opposite side of the federal government, you may still have some notion that the way that the system works is the way that you learned about it in civics class, or TV. And so what I found is, In each individual case, it seems so outlandish that people have a hard time believing it or they get into this mode where, well, this must be one isolated case. However, we have enough isolated cases where we are seeing a number of patterns emerge. And I kind of wanted to run some of these by you, but I may even at some point get a panel together to discuss the fact that this is kind of standard operating procedure. First of all, you know, you might think that the goal should be justice and finding the truth. But what we find is that the prosecutors are interested in building up a record and having wins, that it's less about the truth. And oftentimes what happens is a prosecutor will build up a resume. And then what they do is they leave the government sector and then they become they work on the defense side and they make huge amounts of money based on their track record prosecuting people. So the idea is, hey, we know how the system works. And so we can kind of we can protect you from the other side. And that I mean, I saw this in the Ian Freeman case, which which really kind of radicalized me, which is that they were omitting evidence. They were they were clearly trying to even manipulate the information they were presenting so a lot of people um you know don't realize how how stacked the deck is and so when you go into these trials the jury knows almost nothing about this you're very unlikely to find a juror that that knows anything about crypto that may be changing now but certainly for a case like romans and these earlier cases you're at a disadvantage. And frankly, the way that I've described it is the prosecution often baffles the jury with bullshit because the jury is non-technical and can't understand it. So it looks like, oh, hey, they've got this, here's somebody from the FBI, here are all these people in suits. And they presented all of this stuff and they don't even know how to interpret it or understand it. But a lot of that presentation is actually fake it's fake information that's being presented the information on the paper itself doesn't even say what they say it means while they're presenting it to the jury am I off base here well you're getting on the CSI effect you know they have shows like CSI law and order where the government is always getting the bad guy at the end of the show and people are trained to believe what the government's saying and if the government's saying something they usually think it's even worse than what the government was saying because of those shows because of that attitude Well, I think the government comes in with a little bit of I think the government comes in with a little bit of advantage of sort of the psychology of that. They're the protector. And like you say, everyone's grown up seeing on TV and they've learned that a lot of people, unless you grew up in the hood or you're a person of color in the United States, maybe. uh you've grown up with this notion of law enforcement as protector and the savior and so they get a lot of deference in a courtroom that you know over my fifteen years now i've kind of come to see is slanted towards the government and all these small ways that aren't um anywhere in the record like the I'll give one example and I'll move on. When I was just starting out in federal court and I was doing these hacker cases all over the country, I asked my mentor, like, how do I know where to sit in the courtroom? And he just looked at me and he said, well, the prosecution's table is always closest to the jury. And I was like, huh. And if you read just basic psychology text, you'll see that whoever's closer gets primacy and authority with the people that they're talking to. I've been in a couple courtrooms in the United States where the prosecutors weren't. Their table wasn't right in front of the jury, but that wasn't Roman's trial. That's not most of them. And the conviction rate in federal criminal trials is between ninety and ninety nine percent, depending on the year you look at it. And that is not a fair system. That's not a fair system. I, you know, I mean, we're in it. I respect the institution, but there's so many ingrained institutional prejudices and a pro prosecutorial bias are like forty percent of the federal bench is former DOJ prosecutors. You know, you're not, you know, it's not a rational and fair system. You know, it baffled me early on in the case during a pretrial conference that one of the prosecutors said that it was up to us to prove that Roman was innocent. And we were like, what are you talking about? You guys have the burden to do that. But he was right. He was telling the truth. He was speaking the actual truth of the system as opposed to what you've been taught, which is that you're innocent until proven guilty. But actually, the reality is you are guilty, and you're probably not going to be able to prove yourself innocent if you are innocent. Well, innocent until proven guilty really depends in the United States on who you are. There are some people that get that presumption. It's also written nowhere in the Constitution. Right. Also notice if you go up to any courthouse and you find scales of justice, take a good look at them. They're never completely balanced. They're always weighed down on the side. Fair point. Yeah. so i so i want to talk a bit about chain analysis just to give people some backstory i don't know if you guys i've talked about in previous episodes that the history of chain analysis but i think it's really important that people understand who chain analysis is the history of chain analysis and then the importance they played in this particular case does anyone want to comment on on kind of the background of chain analysis Yeah, of course. The Chainalysis was founded by Michael Groninger. He came over from Kraken and I think he used a lot of the government contracts and he had learned about the AML requirements he was going through while setting up Kraken. And that's what he built Chainalysis to do in the marketplace. So this is like twenty fourteen, right? Yeah, right. And you can see that they come in on Roman's case around twenty fourteen, twenty fifteen. And I think they start working with Treasury, IRS, and then This case is one of those cases that they use to sort of leapfrog over to get contracts with DOJ. And you see them start. I think this may have been like one of China. I don't know for sure, but I think this may be one of China's first cases really that they're working on the government with. and it just kind of lingers on and it goes on for years and years and years and i think like one of the things that happened with roman's arrest is that they were they really rolled the dice thinking that when they arrest them they would get all the corroborating evidence and they just didn't And there was this, on the side note, there's this, because I've just been thinking about this a lot going into the appeal. You know, after they arrested Roman, they were cooperating with the Swedish police and they could have gone and searched Roman's apartment in Sweden and taken, it got his laptop and his computers and everything from the apartment. They never did that. It was like after they arrested him, they were like, oh, shit, we don't want to look any further because we don't want to find out. But to the jury, though, they did present the fact that he had bunker tour tunnels from his remote computers to his home servers. And because they didn't go and search his home in Sweden, because they didn't physically have those servers, probably because they knew there was going to be nothing on it. Well, he didn't have servers in his house, but... The servers in his house, the home, his home, his home, his home network, his plant watering system. The guy's a computer nerd, right? Like, as far as I can tell, his crime is that he got into Bitcoin in two thousand ten. Right. And the best we can figure the reason he's in this mess is because he did some peer to peer transactions with somebody who started Bitcoin fog. Right. But like, you You know, they're giving him basically he's accruing what they call in our business downstream liability. And it's sort of like blaming the bank like for the guy withdraws cash out of the ATM. Then that cash goes through like twelve different people and that twelfth person commits a crime. Like essentially, there is a Romans in jails. They're saying, OK, we're holding you responsible for what that twelve person downstream used. Another striking thing about this case and these Bitcoin prosecutions in general is they would never do this to a bank. They would never, ever hold a bank liable under the criminal theories that they're using against people engaged in cryptocurrency transactions. And I don't see what the difference is when you just look at it legally. If you're considering it all money, you can't let the banks off, right? But they would never do that, right? So there's this element of it, and DOJ has this as an issue, I think, generally, is they're defending an old financial order that's very ingrained in them. And I don't even think they're aware that they're doing it. I think part of that is just sort of like an institutional reflex. And that's what I think the big battle is between the left and the right right now, to speak in crude terms, is whether or not this revolution in finance, which it's happened. You're not going to get it to go away. But are they just going to criminalize it? But someone like Roman will always be the target, especially compared to a bank, because you can't seize all of a bank's money. But they were able to seize all of Roman's money. That was easy. And ultimately, if you follow these, or at least my cases, following my cases, nobody gets arrested unless there is some evidence. Well, nobody gets prosecuted, not like this, unless there's some evidence that there's enough money to justify that prosecution. And it was pretty obvious. I remember you guys were talking a little bit more about Roman personally before. I didn't want to meet Roman. I didn't meet him until trial. And the reason was because both Tor and Mike told me right off the bat, oh, you're going to love him. He's innocent. You're going to love him. He's a great guy. Just wait till you meet him. And I said, well, then I can't meet him because if I'm going to like him that much, I need to be able to remain dispatched and be able to find something wrong. Probably what I spent a year on the case before I met Roman, something like that. Um, and then when I finally met him, one of the first questions he said to me was he said, um, actually it wasn't a question statement. He said, well, I must've done something wrong to deserve this. And by that point, I just, just met him at that point. I said, the only thing I can see that you did wrong to deserve this was you got into Bitcoin too early. Yup. I mean, it is tragic. Right. Looking into that. Well, you know, actually, from what I've seen with this, it's not even obviously Jamie Dimon has not gone to prison or no one's charging him for that. Yeah. But in this case, you know, Roman's not even the bank. This is like charging someone for using the same ATM that someone else used that was involved in bad activity. This is like just so far removed from from any possible crime or liability, that it's nonsensical. So as I was going through and looking at all this, and I've watched a lot of your other talks. Obviously, I saw Mike recently at an event we were at together. So what potentially might be some of the motivation here? So let's go into some of the details on what they were trying to present with respect to Chainalysis. Because I found some of that, some of your, Mike, your presentation on that to be jaw dropping. Yeah. So the government's key piece of evidence from Chainalysis was they were trying to trace back the money that was used to register the domain registration for the peer net website, www.bitcoinfog.com. Now, this was on the open internet and it wasn't the actual Bitcoin Fog service. It didn't exist there. The Bitcoin Fog service operated on the Tor network. But bitcoinfog.com had a link that would direct you to the Tor network to be able to use the service. And so the government was trying to trace back the registration of that website and trace the funds to figure out where they came from. And in order to do so, they put up this big poster. The government loves to put up these posters for the jury to look at during trial. And you had the transaction for the DNS registration way down here on the bottom right. and then sixteen convoluted hops with no private keys, and then you have Roman's KYC tracking accounts. And in between those two known addresses were all these different wallet addresses that were linked to different emails. None of those emails appeared anywhere in Roman's possession. None of the passwords or logins appeared anywhere in his devices or networks. Yet they brought this out. So it very much is like if you're roaming at the top here, you do a transaction right away. You had two blockchain addresses, Bitcoin addresses that had no attributed owner. Right. So they could have been anybody. But the government tried to argue that those belong to Roman and he hid them and all this stuff. But what happened to Roman is something similar to if you have a ten dollar bill, you go to buy some coffee. Then the barista takes that ten dollar bill and goes and gives it to the neighbor. And the neighbor takes the ten dollar bill and goes and buys a pair of shoes. And then the shoe store guy goes and buys drugs with it. And now the government's coming to say, hey, Roman funded the purchase of these drugs, illegal activities. The downstream liability aspect of how the government is prosecuting Roman Sterlingov is scary for anybody involved in Bitcoin because it doesn't matter who you transact with. If the government can use Chainalysis to make up these attributions and be able to present it with authority in front of a jury, it dangers everybody in the Bitcoin world. Well, in fact, they told us, they said, if he can just tell us who he did, who he transacted with, give us another name. How's he going to figure out who he transacted with? And that's like one of the matter one of the like tougher things about this case is for us It's like how can we cut a deal with the government when our guy didn't do it, right? Like when when you guys don it or they got him on something or whatever you go cut a deal, right? Because you can give information you can leverage that into a deal and unfortunately like ninety percent of criminal cases get disposed of in a plea deal Really fucked up police system, but that's another shit but so but here in a situation where you've got somebody who's innocent and And the government's coming to you and saying, well, just give us all the information and, you know, we'll let this off. We'll let this go. It's like, dude, we don't have anything to give you. Our client would have to lie. Right. And like, what are we going to do here? Right. Like, um, and they wanted, what did they want at the beginning of they wanted? For him. That was the plea offer. That was the plea offer? The U.S. sentencing guidelines, which are themselves a whole story and a whole complete mess. Life in prison. Life in prison for the USSG. After trial, the government was requesting thirty years in prison. We ended up getting one hundred and fifty months to twelve and a half years. And kept his right to appeal. But we kept his right to appeal. And he didn't have to lie. They don't have to lie. But at least by trial, the DOJ made it pretty clear that if you wanted to give up more Bitcoin, if you wanted to give wallet addresses, if you wanted to give access to the proceeds of Bitcoin fog, deals could be discussed. But he didn't have any of that. Bitcoin fog still has a hot wallet sitting there with all the Bitcoin that generated the fees. It never went out to anyone, let alone Roman. That reminds me of one of my favorite facts in this case. In the indictment, there was that address what they're saying. What did they call it? The Bitcoin fog address. I forget what they call it. Consolidation address. So they say there's I don't know how many millions of dollars with the Bitcoin in it. I can't remember now. But I remember we go look at it. Let's look up the wallet address, right? there's zero dollars in it and it hasn't transacted since like two thousand thirteen or whatever. And they're like, oh, yeah, but we've got this secret sauce and chain analysis and we know that actually there's all this money in it. And that's part of that four hundred million dollar asset forfeiture to him. And we're like, well, we can't even look it up. And it's like, but there's this So in my computer cases coming into this, there was always this, people have this weird superstition. They almost look at like hackers and stuff like that as witches because I think they just don't understand the computer science and it kind of triggers this primordial fear of the unknown in people. You get that with Bitcoin too, right? And it's another thing you're fighting in the juries in these criminal, okay, not fighting with them, trying to overcome with them is this guy looks like evil and they just did everything they could to make Roman look, um evil which is just ridiculous because the guy is not evil I mean this is an innocent guy sitting in jail right now that they just destroyed um they haven't destroyed because he's not broken but they're trying to destroy Well, I mean, it seems like if your name is Roman and you're from Russia, then you're on. Yeah, it's like, you know, we get him like he's the guy we want to go after. But you're not I mean, you're not far off because they they repeatedly mentioned that he was from Russia. They repeatedly mentioned that he wanted to fly a plane. They couldn't decide whether he was part of Taliban or. Yeah, right. It was bizarre. And then they threw out accusations that he was a pedophile. And there was absolutely nothing, nothing, nothing in the case that even came close to that. They kept on putting up this image of a bad ID photo he had. He had a big straggly beard. You know, a computer scientist guy beard. Big one. And it was on his Swedish driver's license. And they just kept putting in that picture in front of the jury over and over and over again. And emphasizing the fact that he was Russian. Not a single eyewitness testifies that they saw Roman operating Bitcoin fog, that he heard him talking about it. All the government witnesses were after the fact investigators, people who'd done tracing on Chainalysis Reactor or forensic accountant saying, well, my guess is this is what he would have gotten. you know because they they said that the money that he mixed through bitcoin fog his own money he got because he started trading in bitcoin in they said after he mixed it through bitcoin fog and put it in his ky seed kraken account kyc just means he stuck his name on it right um that those were the royalty payments for bitcoin fog but he should have had way more money and please please explain to me why the supposed founder of bitcoin fog after setting up the sophisticated mixing thing and being all this great and all this stuff stealth would mix it had sent his royalty fees from the mixer to a kyc kraken account why would the like it just like so much of this in this case when you turn around and you really really look at it it makes no sense and it's why it's so maddening that they got the conviction on this and that they're probably getting you know maybe get affirmed on appeal because i think the you know who knows what the appellate judges think about crypto yeah i mean it's again it's confusing for everyone and um it's It hasn't been great so far, and I know the other cases that I've been following. So, yes, we have somebody where they didn't find any actual evidence on any of his own computers, but yet he's going to have this KYC account. Matter of fact, in fact, he did them an inadvertent favor. He flew over because he didn't know whether he was going to stay or go back. He was sort of a digital nomad at that time. He flew over with with a suitcase filled with devices, with with storage, with memory, with they they did complete forensics on everything and they found they couldn't even find a login related to Bitcoin. Nothing. Wow. So, you know, Mike, you'd mentioned that wasn't there somebody else on your side working on the forensics at one point? Yeah, this was a fascinating story. So in twenty twenty one, Tor and I went down to speak at the Bitcoin conference when it was in Miami and we took the whole presentation. This is before the trial. So we're telling everybody, you know, we've got this innocent guy. We need the support. After our presentation, this guy comes up to me in the hall at the conference center and he says, hey, you know, this is really messed up what's happening to Roman. Now, this is my Alamo. I want to help you guys out. And he worked for a company called CypherTrace. CypherTrace was an early competitor with Kane Allisons. They also did blockchain tracing. They had different heuristics, different methods. And when I spoke to everybody from CypherTrace, everyone said the same thing. This is an art, not a science. You cannot make an attribution a hundred percent using the kind of heuristics that exists in this industry. But we do want to help you. We do want to combat chain analysis and we want to help you get this innocent guy out of prison. So we ended up working with one of their top blockchain tracers. We went to work at her house for a week and we went through everything, all the information. She was lined up to be our expert witness at trial. We have been prepping the entire trial to have CypherTrace be our expert witness that combats chain analysis attributions. About a week before trial, MasterCard, which owns Cypher Trace, pulled their support, everybody on their side lawyered up, and we weren't able to introduce them as an expert witness at trial in front of the jury. We couldn't even talk to Jonah. Couldn't even talk to them. It was like somebody had made a phone call or something. I don't know, like, wow. Right away, right then and there, MasterCard completely dissolves the entire company. It doesn't exist anymore. And we haven't heard or spoken to anybody from Cypher Trace since. And those people were dedicated for the cause. They were all trying to help prove Roman's innocence. And that's how it goes sometimes. We don't know what happened there. They had, China just had a lawyer come in from California to represent them in the case. They tried to put everybody under this very, very strict protective non-competition order. So we had to- Non-compete clause to look at the discovery in a federal criminal case, which is never- happened in the history of the federal courts and for those of you who don't know what a protective order is it's just an order from the court that you're not going to share the evidence in the case that's going between the government and you you know you're going to keep it secret until it comes out of court fine we sign them all the time right but um what was crazy about this one when we were pushing and pushing and pushing to see everything about chain analysis reactor right because we want to know how you're coming up with these numbers and blah blah blah blah um They wanted us in order to see this stuff to everybody, our experts, everybody to sign a non-competition clause for five years with Chainalysis Reactor such that the Chainalysis, if they determined later after the case that somehow we were using the information that they disclosed to us in this case, they could sue us on business matters, right? To which everybody said, no fucking way. right and it scared away all our experts because nobody wants to get sued by multi-billion dollar corporation right and i asked the court we asked the court we said your honor first of all this is a criminal case somebody's liberties at stake and you're putting you know proprietary corporate interests above somebody's constitutional liberty it's just big problem right there right but number two can you name me one time One time in the history, I'm talking the entire history of federal criminal jurisprudence cases, courts, any time, just show me one time that there has ever been a non-compete clause in a protective order. Guess what they showed me? absolutely nothing i was shown one case from an intermediate new jersey appellate court uh on a dna matter right so like one of the things here that's like a really really deep constitutional issue is why are the courts or at least in this instance favoring corporate interests and profit over a defendant's liberty interests and their sixth amendment right to confront an accuser. And in this case, Chainalysis Reactor and Chainalysis is an accuser. They're saying you laundered all this money, right? And yet their excuse, like we were saying earlier before is like, oh, well, hey, you know, you terrorists might be able to use it in the future. Well, tough shit. You know what? Guess what trumps that? The defendant's Sixth Amendment rights, right? And you know what? You can use open source. There's zero reason for this to be closed source. The only reason is that they're worried about competition, but they should not have stepped into the law enforcement compliance zone marketplace without validating their software and expecting it to be examined. Because right now we're just taking its accuracy on faith and people that they have paid to say that it's accurate. Actually, Aaron, you'll find this fascinating on what Tor is talking about. So I have been doing this just shy of thirty years now. And for most of at least the first twenty years, it was there was barely a fight to be able to examine software or hardware in the technology sphere. Basically, we got to I mean, I literally have down by my legs, ironically, by my legs, I have some ankle bracelets that literally were sent to us. So we could test the GPS systems, how well did they work? It was it's never ever been a problem. Maybe occasionally we'll have a fight. But I've always been able to examine hardware and software that's used in a case over the last a little less than ten years, something has turned around. Something's really changed. All of a sudden, the corporate interests of software have have definitely taken over. And now all of a sudden, instead of a court ordering that they have to give us a copy or they can't use it in court, now we're being told, you know, if we give it to you, you're going to use it to help people circumvent. Somehow, in fact, I testified in federal court in Alaska. I don't know if the prosecution understands my business model, but I don't make any money by helping people get away with anything. There's no incentive for me. But despite having received national security clearance in prior cases, this case I could get nothing. And it got worse than just the money, because at one point there was even a criminal clause in their protective order that was coming through. And when CipherTrace was withdrawn by their overlords at MasterCard, we tried to get another tracing expert to hop in. And the community had been great. We had been really public about what was going on with Roman's case. And we had two potential expert witnesses that were ultimately rejected by the government for the most ridiculous reasons. The first we tried to bring in Laurent Salat from OXT, which is an open source blockchain tracing firm, the way blockchain tracing firms should be. It should be audited. It should be open source. People should be able to look at the code. And he was going to come in and contest Chainhouse's attributions because of the of the criminal clause in the protective order. And because of the fact that Laurent Salat was French and France does not extradite its own citizens, the judge was worried that if he comes in and then gets to look at the chain analysis source code and then goes back to France, there would be no recourse for the American government to put him in jail. So he cannot be an expert witness and he cannot testify in this case. The second person who he brought in, was or tried to bring in was Brian Bishop, who is one of the most elite Bitcoin core developers, has been part of the Bitcoin project for for over a decade. And the prosecution brought all this evidence in to say, oh, this guy is unacceptable as an expert witness because he's into bioengineering. You know, he's into working with genetics and trying to play around with the fundamental building blocks of life somehow makes them a bad blockchain analysis. It didn't make any sense, but we ended up having to go to trial without any expert witness on that front. As a matter of fact, we won't know how it would have gone the other way, but it seemed pretty clear that the only reason I was even able to testify was because right up front during the hearing, I volunteered that I wasn't there for the purposes of Bitcoin tracing, of crypto tracing. Then all of a sudden, I was okay. Oh, and can I say my favorite part of the proceedings that I just absolutely, I'm still in shock about? It's, so when we go, you do something called a Daubert challenge when you want to challenge this kind of, you know, chain analysis, this expert kind of testimony. So we mount a Daubert challenge, expert challenge, and we have two days of hearings. and mind you at this point that we're having these two days of hearings roman has been in jail now for a year and a half pre-trial and you can't jail a defendant in the united states pre-trial unless you find it you know their flight risk and you weigh the evidence against them right so we're on i think it's like day two of this hearing you know the entire case turns on blockchain and everything we're a year and a half in and the judge just goes i'm sorry i just have a question Does the blockchain have an administrator? Exactly. So, Aaron, you're laughing right now. I can tell whether or not somebody knows something about the blockchain simply by telling that story, because everybody who knows something about the blockchain immediately laughs. And it's fine if you're a beginner and you're still learning this stuff. That's a great beginner question. The answer to which is no. Virginia, the blockchain does not have an administrator because it's a decentralized ledger and that's why it's one of the greatest innovations in finance in the last few thousand years, right? But for a federal judge to ask that in a hearing a year and a half after he's jailed somebody and one of the factors he evaluated was the weight of the evidence is very problematic and it's also indicative of sort of like the lack of knowledge base in the courts and it's also probably you're going to find it in the juries and the general public about this subject area right like wow right and that guy after that judge after that hearings he's the one who says oh it's okay to let chain analysis reactor in to the courtroom and put it in front of the jury Somebody who just blatantly told you, I don't really know even the basics about blockchain, but I'm making the decision to let this forensic software in as evidence. Anyhow, because law enforcement says it works. Yeah, this is common that I've heard in other cases as well, where the judge doesn't even know how to uh, handle a question or handle the information. And there's often just deference to law enforcement. Uh, and that's, we're seeing that over and over again. So, so to get this straight, so, so the government is presenting this black box evidence that hasn't been peer reviewed, that hasn't been validated. And then you are trying to mount a defense and you have a company that is, you know, that MasterCard has an investment in that is, uh, fully understands what's going on here and they get pulled at the last minute. And so now, so the jury just basically is seeing a one-sided argument that has no backing behind i