Latest / Monero Talk / Roman Sterlingov’s Bitcoin Fog conviction based on chain analysis sets dangerous precedent / EPI 304
Transcript
- Doug Alright guys, what's going on? You guys want to briefly intro? Tor Ekeland I'm a Tor Ekeland, I'm a defense lawyer, and well, here's Mike Hazard who I work with. Mike Hassard Mike Hassard, also a defense lawyer. We just recently wrapped up the case of the United States versus Roman Sterlingov. My ears are still ringing from the verdict. Guilty four times on four counts. Doug For those who don't know what that case was about, can you guys just briefly summarize? Tor Ekeland So, Roman was accused of operating a mixer called Bitcoin Fog over a period of 10 years between 2011 and when he was arrested at Los Angeles International Airport in 2021. And they said that he basically laundered $334 million worth of dark net money that went through Bitcoin Fog, except there wasn't any direct evidence. Tor Ekeland The government's case was all circumstantial that he ever operated Bitcoin Fog. Like when they arrested him at the airport, they caught him with all his computers, his hard drives, handwritten notes, his diaries, his password log, and nothing in it showed him that he ever operated Bitcoin Fog. Tor Ekeland He was a user of Bitcoin Fog because he was using the mixer for privacy reasons, and we just finished a month trial. We got the verdict, very disappointing verdict on Tuesday, guilty, but we're still convinced he's innocent and we're gonna go appeal it. Doug Right. So so so we fully understand the only evidence that they had was that he had that that he was connected to Bitcoin that was used for purchasing the domain name for the service. Right. And it wasn't directly connected. Doug It was hops away and that using chain analysis they concluded that he was most likely the the user of that Bitcoin. Correct. That's that's really what they're they're hanging it on in terms of. Tor Ekeland Basically what they did is they The best we could figure is that he ran into the people maybe who started Bitcoin fog in 2011 he was an early adopter of Bitcoin and They have these traces the the majority of their case is based on these traces. Tor Ekeland They did in 2011 where he Back then he's selling Bitcoin to people. He's buying Bitcoin, you know, like bitcoins Like I think it starts the year at 30 cents, you know for one Bitcoin And so he's buying and selling Bitcoin and there's this transaction from his Mt. Tor Ekeland Cox account, which he had ky seed in 2011, which is optional and then it goes to this Bitcoin address that the government doesn't have the private keys to there's no, you know attribution evidence and That it's him and then it's and the government's witnesses even testified It was entirely consistent with him selling Bitcoin to somebody then that Bitcoin goes from that address to another address They don't have the private key to then it goes to another Mt. Tor Ekeland Cox account, which they say was controlled by him Even though they don't really have any evidence was controlled by him non -kyc account goes to another Mt. Cox account then goes to an arm exchange account, which they don't have any evidence He really controlled and then it paid for the DNS registration for the clarinet, you know plain internet website for WW Bitcoin FOG calm that's their main piece of evidence. Tor Ekeland And then the other thing they really used against him as he was a user of the mixer and Because he had all these like paper wallets and stuff like that from 2010 2011 2012 and when Bitcoin took off in price He decided oh, I'm gonna put these into KYC exchanges like Kraken and all these accounts He had that he ky seed, right? Tor Ekeland and so he took his post mix funds out of a coin fog and put them into his KYC accounts and They said oh, that's you getting paid, you know, the royalty fees from the operation of Bitcoin fog Even though like those numbers don't add up like the operator because function have Depending on when you do the exchange rate like hundreds of millions of dollars Like when they caught Ilya Lichtenstein and Harmon they had a lot of money on him when they caught Roman They had about like 1 .8 Million which you know is not anything to sneeze at but it's consistent with him just by Bitcoin early So it was an entirely circumstantial case But what we found out from the jury talking to him afterwards From the faction the jury that I think kind of like drove the decision They just bought into the government's tracing Right, this is this Doug The real, I mean, obviously it's unfortunate for Roman, obviously, there's a human being involved in this who very well may have been wrongfully found guilty of this and with evidence that really is not reliable, right? Doug So it's a case of the government finding the excuse to pin somebody with the crime and using Bitcoin as that excuse and using the traceability of Bitcoin and that's from our perspective of people that are into Monero and Bitcoin, that's the point that we really need to focus on. Doug So what do you guys think that means? Does that mean that your Bitcoin transactions will be used against you? Like warning, beware, is it fair to say that? Doug when when you use Mike Hassard Jenga It very well could be the case, you know I'm worried that we're gonna have more cases like this come about where people have been wrongfully accused and Wrongfully convicted for crimes. They didn't commit because this faulty faulty tracing We've seen it happen with companies that have been red -flagged We've heard stories of the UK in the United States where people have been wrongfully accused and you know Police are breaking down there the door at their house based on you know decisions and information was given to law enforcement by chain houses and other blockchain surveillance companies like it and You know to watch these people's lives fall apart when they didn't commit the crime It just is devastating to watch and I you know, I hope that doesn't continue to happen But you know basing on this case that happened with Romanum I think it's gonna happen gonna continue to happen. Mike Hassard This will continue to be a problem unless we can do something to you know, it's hard to think about what you can do, but This blockchain surveillance software should only be used to generate leads It should not be used as evidence in criminal or civil cases at all Tor Ekeland One thing that's really striking to me. I think the reason that they honed in on Roman is that when they initially did their traces He was the only person who came I see it anything, right? Like so like like there's like in some of the traces you can see like they have this one trace where they say Oh, this is him putting in the first deposit into Bitcoin fog before Bitcoin fog announced, you know, it's operation But when you look at the trace, there's ten hops nineteen different addresses you know BTC coming from an Insta wallet, but it's the wallets not KYC There's there's stuff coming from a Bitcoin miner the first hop on this transaction, you know The first address it starts with Romans KYC account in this trace But the first the next hop just like the other ones they don't have the private key to they've got no, you know corroborating like Attributive evidence that it's him and again, they admit it's entirely consistent with him just selling Bitcoin to somebody then it goes through two wallets that they say are controlled by a You know based on a co -spend heuristic right in between those two wallets There's another address that they don't have the keys to or any evidence that he controlled but I think one of the things that happened like really psychologically with the juries like when you look at these charts and these errors These arrows people just see they they confuse the flow of funds with the flow of control and I think that's really scary because like he made an effort to be legitimate to KYC stuff and now he's in jail for it. Tor Ekeland Like what does that say about? You know what you should be doing privacy wise like here's a guy who's like trying to do everything by the book And if you read a lot of his communications, he's always like trying to pay his taxes and all this stuff and they just nailed him For it, you know Doug Tell us more about the chain analysis side of things. Was chain analysis effectively on trial as well? And if it was, what were the findings for that? Tor Ekeland Well, that was kind of fascinating to me, because when we first took this case, Chainalysis had its name all over it. They'd done a press release the day that Roman was arrested saying, this proves this kind of blockchain tracing works. Tor Ekeland And without going into details I can't go into because there's a protective order on stuff that looks to us, they were behind the initial traces or their software was and people at IRS. But when we came in and we challenged them, by the time we got to trial, they were just saying, we're not attributing anything to Roman. Tor Ekeland And we're just coming in and saying that they just came in to document the cash flows from dark net markets like Silk Road into Bitcoin Fog. And then again, they made it on the stand, this is kind of old news at this point, but they don't have any error rates for the software. Tor Ekeland They've got no scientific peer reviewed papers attesting its accuracy. There's no industry standards. They haven't done any kind of independent model validation of it. It's more sort of like, trust us, it's worked before. Tor Ekeland But when you admit that you're not collecting any error data, how can you tell me that it's accurate? Because you don't even have the baseline data to do this. But people have this view of these kinds of software and stuff like that. Tor Ekeland And in my business they call it the CSI effect for the TV shows where everybody's like, it's scientific, it must be accurate. But this happens in a lot of newly emergent forensic fields. A lot of innocent people get thrown in jail because a lot of companies move in. Tor Ekeland It happened with like bite marks. It happened with DNA and stuff like that before there's any industry standards or any kind of error rate analysis or anything. And something like, according to the Innocence Project, something like 51% of wrongful convictions are just based on faulty forensics. Tor Ekeland So, yeah. Mike Hassard Yeah, of course. It's unbelievable the amount of kind of credit that was given to this tracing by the jury. We spoke to some of the jurors after, and they were convinced by it. They trust the government, and the government's out there to do good by them. Mike Hassard And when you're shown a trace that doesn't have the entire picture, there was a lot of addresses that were not included. You're not seeing the full picture. You're just seeing a picture that was plucked out of the blockchain networks by Chainalysis and presented in a way that pointed the arrow at Roman, and they bought it. Mike Hassard And that's part of the reason why he's in prison right now. Doug So where do you see this going? I mean, if things are going to get worse, you think, in terms of chain analysis and essentially the power that they have or the power that's being wielded through it by the government. Tor Ekeland Yeah, I think it's getting a lot worse. I mean, we're all, I mean, now, like to strike a slightly optimistic note, I think now there's, people are becoming more and more aware of it, right? And, you know, I think there's a lot of issues about having an unregulated, basically, I think, kind of monopoly business in this space, because that's what Chainalysis is, and they've marketed themselves as sort of, like, the compliance software of choice for regulatory agencies and big companies, and they're making tons of money off of this, but I think the fundamental problem, at least when you come to something like a criminal prosecution, is that kind of profit motive distorts justice, because it gives you an incentive to find someone guilty whether or not they are actually guilty, and I honestly think that's what happened here. Tor Ekeland It was a big driver on this, and I think it's just gonna get worse. I think, you know, the software makes it easy, right? It makes a hard problem seemingly easy, so, you know, let's just press a button and we'll get an answer rather than actually having to do, like, one of the things that struck me about this case is they never, he had a computer at his home apartment in Sweden, and what came out in the trial is, you know, they kept on saying, oh, you were trying to, you know, you knew Linux, you were using Linux to log into the Bitcoin fog servers, and we were like, no, that's him logging into his home computer, and then it came out that they never bothered to get his home computer from his apartment in Sweden, and that really strikes me, because, you know, if you got that, you'd be able to check, right? Tor Ekeland And their answer was, well, you know, paperwork, and we didn't, you know, like, what, right? Like, and in a case with no real corroborating evidence, where everything's circumstantial and they're just trying to make him out to be a horrible person, like they were quoting drug dealers from Silk Road that he had nothing to do with, you know, Silk Road shut down in 2013, that's really striking to me, and I think there needs to be standards for the software that go beyond just this simple kind of tracing that we take on superstition and faith. Doug Also, tell us more about the relationship between the government and chain analysis, right? I mean, it's kind of a revolving door there, right? There's this, it's most likely corrupt, right? I think we could say from the relationship between these businesses and government officials, kind of explain that a little bit to us. Mike Hassard Yeah, that's a good point you're bringing up, because there seems to be a revolving door between the government and chain analysis and other tracing companies. You see, in our case, we had the two original prosecutors. Mike Hassard One of them is now a magistrate judge on the DC bench. The other one went to go work as Director of Legal Operations at Chainalysis. Then you get this new set of prosecutors in, and one of them was previously an investigator on the case, but we can't bring her in as a witness, because she's got prosecutorial immunity. Mike Hassard And you just consistently see people going from investigative departments and law enforcement in the United States to then go work at these tracing companies. And the tracing companies then turn over and get good contracts from law enforcement to continue this cycle. Mike Hassard And, you know, this revolving door creates a financial profit incentive for people in the government to go after and use, use chain analysis to go after suspects that they have and get these big contracts. Mike Hassard And it just goes around and around in circles, and billions of dollars are made on this. Tor Ekeland I don't know if I'd call it a revolving door, I'd call it more of a gilded door because they're not going back into government, but what they are doing is they're going to huge, high -paying jobs from their government job to Chainhouse. Tor Ekeland Chainhouse's expert witness, Elizabeth Bisbee, was a former DEA agent. There was the initial IRS investigator on this case, a guy named Aaron Bice. He starts a private LLC, or I think he dusted one off, he started in college, and uses it to investigate Roman, in this case, early on, then when the DOJ press release comes out, when Roman's arrested, his company gets top billing on the press release, which is a huge deal, right? Tor Ekeland Like if you're trying to market a company or whatever, DOJ says, oh, we used it to catch some huge cyber criminal, right? Yet, there wasn't a single shred of evidence that came in from this company, Exigent LLC at trial, but five months after Roman's arrested, Chainhouse has biased the company, right? Tor Ekeland So what everyone's got, even though, and again, I'm not saying these people are like, whoa, evil, right? But you've got this, like, you know, like that when you leave your government job, if you do right by this company, you're gonna get paid a lot of money, and they're hiring, you know, they've hired people from the FBI, they're hiring government people, and that's not cool. Tor Ekeland Like, I'm a capitalist, right? But not when it comes to justice, because the profit motive here, I think, really distorted things. Thanks. Doug Yeah, it kind of reminds me of like the relationship between pharma suit like big pharma and like the FDA, right? Yeah, or weapons contractors Have you guys spoken to RFK jr. About about all this I feel? Doug I feel like he this is this is a you know, this is some Doug something where he should finish your sentence before you even get there, right? Because this is what he's all about and what I personally like about him, what made me interested in him. I would love to hear his take and understanding of this, because we've heard him talk about Bitcoin and stuff, and I'd be really curious about that. Tor Ekeland We actually have a friend who's on his campaign and we have been talking with him. We were in trial, like we just finished trial on Tuesday, but we have been talking with somebody in his campaign because I think he's really good on these issues, you know, and I think there is a big fight over, you know, sort of control of crypto because certain factions of the government, you know, are scared to death of it because they want to be able to control everything and they want to, you know, if you control people's money, you control their freedom. Tor Ekeland Like Elizabeth Warren. Yeah, like Elizabeth, what big, Elizabeth Big Bank Warren. So, yeah. Doug Um, give us your I know you guys obviously don't don't follow it super close, but Monero, I know you guys are obviously well aware of it, right? um What do you think is is happening or could potentially happen with Monero and the government's relationship with Monero? Doug We see large exchanges being pressured or seemingly pressured to de -list Monero because they're they're doing it. They're taking that action um where we see governments, uh Maybe not passing not yet passing legislation, but stomping on the grounds of you know Monero is bad or maybe not even saying it in name, but uh crypto current privacy coins these things that allow people to Send money to each other peer to peer without the government's ability to surveil. Doug It is bad, right? It could be used. It's be its primary use cases are, you know, money laundering and financing terrorism, right? uh, like, you know ignoring what the what you know the amount of uh, of of that that's Perpetuated by by the u .s. Doug Dollar, right? Um, so what you know any any comments comments on that? Tor Ekeland Mike, you go. I will. Thank you so much. Mike Hassard One of the interesting things that I think about Monero is with the 16 -ring ring signature, if everyone's sending those to KYC exchanges and the recipients are being identified with their KYC accounts, it makes it easier for companies like Chainalysis to be able to identify the one address that is not KYC'd on that transaction, right? Mike Hassard So that's a risk that I think can be resolved if people are... Everyone's using KYC with Monero, you're going to be able to show that the other ring signatures are illicit, they're legal, right? And I think that's going to go a long way to showing that it's not just criminals who are using Monero, it's regular people who are concerned with their day -to -day privacy. Mike Hassard And we need more statistics and presentation of those statistics about how Monero is used legally. Show what's been going on in Argentina with what you just told me about the soccer tournament and this community that has all started adopting Monero, you know, these are the best used cases and these need to come out because this is what it's really about. Tor Ekeland I think there's a faction in the government because I don't think there are single monolith on this thing, and this is why I think political action and lobbying by people all across the crypto sphere, so to speak, is really, really important because I think they want to project. Tor Ekeland There's factions in DOJ and Treasury whose livelihood depends on whatever manufacturing crimes. My experience as a federal criminal defense lawyer in the last 10 years dealing almost exclusively with DOJ, now at this point I think there are more law enforcement officers than there are crimes, and when you've got that and you're a law enforcement officer and you don't have any crimes, you need to manufacture some. Tor Ekeland So they have an incentive to go criminalize everything, and I think you're going to see more and more of that, but I think they're not a political monolith, and I think we just need to really all work hard on mobilizing and pushing back politically, and I think this assumption, particularly in America, a country that was founded on a revolution overthrowing a tyrannical government, and if you read the Bill of Rights, the Bill of Rights is not a series of documents that say, trust the government, quite the opposite. Tor Ekeland It's all a whole document about ... It's rules for the government. It's rules for the government and preventing them from doing certain things. I think this notion that the government has a right to violate your privacy because they're the government and they're moral, that's not even something that's like a foundational political philosophy in the United States, and I think we've lost our way there on that point, but I think you're going to get these kinds of moralist, kind of zealous, kind of save the children sort of things going after Monero and anything related to privacy, because ultimately what these people want is they want to be able to control everything, but then they should move to China, right? Tor Ekeland We just saw that presentation about social credit scores in China, because that's what that is trending to, and that's what I think the impulse is, and that's why I think it's very important we've got privacy crypto like Monero or anything, and look at what happened to Roman. Tor Ekeland I'm 100% convinced this guy's innocent, and he was trying to follow their rules, and look what they did, and I really think what they did there and what happened there, they were driven by motives that they don't even fully understand, because I do think that they think they're doing the morally right thing, and that's really, really scary, you know, it's sort of like the banality of evil kind of part of it, they're not acting like super villains, they're thinking, oh yeah, I've got this guy, but part of them knows, okay, well, Chainhouse's reactor will pay me whatever, like six, seven figures when I need to retire in 10 years. Tor Ekeland This is great for my career, right, and like, we even had the prosecutor in this case, one of the Pichao hearings, this dropped my jaw, and I think we may have mentioned this on the podcast we did before, was we were talking about whether or not Roman was going to take a plea deal, right, and one of the prosecutors said, well, you know, he has to prove his innocence to us, and I was just like, my jaw dropped, because that's not the, you know, in America you're supposed to be innocent until proven guilty, this is a federal prosecutor in a federal court in Washington D .C. Tor Ekeland saying, no, that's not the standard, and you know what, the sad thing is, it's not the real standard anymore, like he went in, presumed guilty, and even though I think a faction of the jury that sort of took it over looked at him as he was guilty, and that everything that the government was saying is true, and in that sense, we've got an uphill battle, but I do have enough faith in the system thinking that we can, if we fight back, we organize politically, God forbid we start to lobby, we can change this, because they are not a monolith, they act like one, but they're not, you know, and there's cracks in that facade. Doug Yeah, it's really, it's a game of, it really is a game of information at the end, right? We're certainly on the right side of history. It's just enough people need to understand what's at stake here, but do you think fundamentally we can overcome the momentum that's going against us with regards to this system that's set up there that just seems to be getting more and more powerful and totalitarian? Doug Obviously we wouldn't be doing any of this if we didn't think, if we thought it was futile, but what do you see as being that path towards quote unquote victory? How do we get to the point where Monero is considered synonymous with American, right? Doug Like there should be nothing wrong with using Monero, advocating the use of Monero. It should be as widely accepted and as understood as cash itself, you know, equivalent with cash itself. But how do we get there given the fact that you have people like Senator Warren out there being like, this tool, you know, it's evil and it's used by evil people. Doug Like, how do we overcome, what is the pathway to overcoming that? Mike Hassard When people come together, incredible things are possible. And I think that's the first step. And Roman's case is a rallying call for this kind of collective behavior. You know, we need to get publications out, we need a lobby, we need to get movies done, documentaries, shows on Netflix, stuff about this because it affects everybody. Mike Hassard And financial privacy belongs to everyone. Tor Ekeland Yeah, I'll tell you what Mike said. I think it's about taking control of the narrative from them and not assuming that their narrative is locked in. Because if I've learned anything in this space in the last 10 years, is that the narrative and the public perception is very malleable, right? Tor Ekeland Or you even look at what the Republicans did with abortion in the 70s, right? Like in the beginning of the 70s, most fundamentalist Christians were fine with abortion. And then they decided, okay, let's change the narrative. Tor Ekeland And one thing, like when I hear Elizabeth Warren, right, you know, she's fair mongering, well, let's fair monger back a little bit, right? Let's talk about, do you want the government in every corner of your life? Tor Ekeland Do you want these moralists controlling everything? And I think part of what's driving Trump is there's like a real anger at this kind of level of regulation and the government coming in on everything. Tor Ekeland And I think that's why you see a lot of people who would normally not support a guy like Trump, who's, let's face it, the guy's quoting fucking Mein Kampf, right? But he's leading in the presidential polls. Tor Ekeland And I think it's precisely because of this kind of crackdown where they're like, we can't trust you with anything, sign up with everything, put an ID, we wanna know everything you're spending on. Well, you know, this is a country that was founded on not trusting the government. Tor Ekeland As a matter of fact, if you look at like the constitutional basis for like the FBI and general federal criminal statutes, they didn't want that when they wrote the original constitution. You've really had to stretch it and like to kind of take these crazy interpretations to get to the point where you can have this kind of regulations. Tor Ekeland And I think it's reaching the breaking point. But I mean, I think fundamentally is not to give up on the narrative, talk about, like one thing that struck me when I was listening to one of these privacy speakers here was just the safety concerns involved in wanting to not show your transactions publicly. Tor Ekeland And I was thinking something that happened with me during this case is I've been using, I've kept all my Bitcoin transactions above board because I'm a law firm and declaring my taxes. So I've just been using Coinbase. Tor Ekeland Since 2014 or 2013, right? And I wasn't thinking when I set up the legal defense fund for this case and I just used the Coinbase address, I've been using for like a decade, right? So some people that go and they trace and they're like, you got $1 .4 million in donations, you greedy little pig, right? Tor Ekeland And I'm like, dude, like you're looking at 10 years of the Bitcoin flow through my law firm. I think we're the first law firm in the world to take Bitcoin as payment, right? But there they just did what the government did, right? Tor Ekeland But people jump, they jump in and they make these assumptions about things, which is just like, no. And then I was like, oh my God, I got all these jackasses like looking at my crypto address and like making all these assumptions and flying to these wild conclusions. Tor Ekeland And I think that's the real problem with these kinds of tracing and everything is like, you don't have context when you're looking at it. You don't have eyewitnesses saying what happened. And if you don't have collaborating evidence, you go down this rabbit hole and you fill it with whatever your desire or need is. Tor Ekeland And I think in Roman's case, they had a desire and a need for him to be guilty, right? And when eyewitnesses in our case who just say, well, yeah, this is consistent with him doing a peer -to -peer transaction, well, then why are you saying he's running a Bitcoin fog? Tor Ekeland And when I literally asked that question substantially and one of the witnesses and he just was like, well, it's like the totality of the circumstances. I'm like, okay, well point to something, point to me to a concrete. Tor Ekeland Yeah, it's the government's case is what he said. And I got a rejection because I said, well, yeah, that's the government's case, right? You can't point to any one thing. You've got this vague kind of feeling. Tor Ekeland But what's scary is that won their case. I still can't point to a single piece of evidence showing him actually operating Bitcoin fog, right? I can't, like it's just not there. But they're like, well, he could have. Tor Ekeland He used the Tor browser. He knew how to use Linux. He had computers on him when we caught him. Yeah, we searched all through his computers high and low, didn't find a trace of him ever operating it, right? Tor Ekeland But it's crazy, right? But then there's a certain crowd of people who... expect they need the government to protect them and they kind of live their lives in fear a little bit and so they're not going to rebel against that and Those are the people we need to get and reach to and change the narrative with you know and explain to them Look, this isn't some sinister thing Like everything we heard anything having to do with crypto in the trial was they just cast as evil Right and we need to normalize it and in a certain sense Bitcoin with the ETS and stuff like that is becoming more nervous Same thing with Monero, right? Tor Ekeland They're trying to you know, tar Monero is like used by CSAM people, right? It's like but no it's not it's like normal people like us We don't want to get mugged, you know because somebody's done a trace I don't do you want your bank, you know, nobody in America would say oh go ahead Take my bank account number and give all my banking information to everybody in the country But that's what you get on the fucking blockchain, right? Tor Ekeland Like like but there's a disconnect there But between you know What people wouldn't do with their normal fiat currency accounts and then they get over to crypto because it's still so new and exotic Doug Yeah. I mean, I think a lot of people go into not even realizing that that flaw exists even to this day. I mean, obviously everybody here, I think we should say we're at the Finney Forum here. I don't think we really spoke much about that. Doug But that's okay. Yeah. All these people know, right? But the noobs, the people that are buying the Bitcoin ETF, for example, they're just assuming that it's this tool that allows you to transact cash. Doug We saw Michael Saylor coming out the other day basically saying no. That was, I forget the phrasing he used, but he basically said that was an historical mishap. The fact that it was ever considered digital cash is not supposed to be that. Doug It's digital property. It's like owning a piece of Manhattan. So, I mean, he's basically saying, you know, Bitcoin is meant to ultimately be a transparent piece of property that you know who the owner is at all times. Tor Ekeland Yeah, you know, I think when you're in the airport, I'm seeing ads for Bitcoin ETF. And when I first came across Bitcoin, right, like somebody, we were trying to raise money for a case in 2012, and somebody's like, you take Bitcoin? Tor Ekeland I'm like, what's Bitcoin? They're like, it's money? I'm like, yeah, we take it, of course. And I didn't think it was any big deal, right? It was just, it was like at $42 of Bitcoin or something like that. Tor Ekeland The only thing we did with it was we were like, you had to transfer it to US dollars quickly because it was so volatile at the time. And I regret that. I should have just been a janitor for 10 years and just sat on my Bitcoin. Tor Ekeland But like, I think, you know, maybe, I hope in 10 years, like five, 10 years, the perception will change. But we have a duty, I think, if we do really care about this, is to start educating the normies because there's nothing wrong, inherently wrong with them. Tor Ekeland They just don't understand it in the way like we do, right? And so we should, instead of fighting them on that, or like, you know, maybe it's not even, we don't even like fight the government. The fight is just educating people and normalizing it because the fact of the matter is more fiat money is used in crime than any cryptocurrency. Tor Ekeland And China also says that, right? It's like less than 1% of cryptocurrencies are involved in any kind of illicit activity. And you know, the US dollar, $20 bill, $100 bill, man, you know, everybody knows there's like a ton of cocaine on every fricking US dollar bill, right? Tor Ekeland But what's weird about crypto is like, nobody would say if I go spend $20 at Starbucks, Starbucks gives that $20 to change another customer, then go spend it at the pharmacy. The pharmacy go gives that $20 bill to somebody, that person goes and buys drugs. Tor Ekeland Nobody would say, I bought those drugs, right? But that's what they're doing with crypto because they confuse the flow of funds in their trace with the control of funds. Doug I forget the term, it was the legal term for like when they talk about the fungibility of money, the bona fide something, I forget the term but basically this concept it's in law and it dates back to you know from Roman times this idea that money is treated different in the eye of the law and that you don't look back at its history because then it would no longer be fungible and it would be inefficient if people can you know prosecute on those grounds and saying you know where that money come from, where that cash come from right, as opposed to property, property is treated differently and but with Bitcoin ultimately it's being treated like property in this case, it's not being treated like money where there's no you know no questions asked when cash is paid otherwise it would lead to a world where you know you'd always have to basically you have to be the due diligence would be on the business owner or whoever it is to investigate to make sure that cash didn't come from somewhere where it shouldn't have I mean that happens a little bit with bank secrecy act right but ultimately you know cash is allowed to flow freely and that's not how crypto is being treated. Mike Hassard The downstream liability aspect of what Roman was charged with and how it all played out is very scary for anybody who uses Bitcoin and Monero. The idea that you can get prosecuted for somebody else's crimes because of this misidentification is downright scary. Mike Hassard And I think that that's one of the things that we're going to have to educate people on, was that Canalysis and other blockchain surveillance companies are moving beyond KYC, know your customer and towards KYT, know your transaction. Mike Hassard So this blockchain surveillance dragnet is going to expand and try to identify every single transaction. But in attempting to develop that dragnet, there's a lot of assumptions that are going to be made and they're not all going to be correct. Mike Hassard And the accuracy of the software and being presented as something that is completely accurate and given a law enforcement as facts when really there's all these assumptions baked into it, makes it even more scarier when they're trying to combine, know your transaction with this misunderstanding of flow of control and flow of funds. Tor Ekeland And I think what Mike just made me think of a really kind of disturbing aspect to your analysis is they've got they seem to have access to government databases and information through their special relationship that they built with the government. Tor Ekeland And that I think is a little disturbing to me because they're kind of a monopoly right in this space. And now they've kind of got these privileged relationships with the government. I just think that's a recipe for disaster because you know what they're unregulated. Tor Ekeland They are not a regulated entity. There are no standards. There are no laws governing them. Where is this? And this is where I think there's another space to push back on is that we need to go to the politicians and say look you need to regulate this space. Tor Ekeland If you're going to use this software and use these companies to regulate us to put us in jail on all we need some standards here because right now right now there's nothing. There is no regulation. So you want to tell us that we need to regulate our currencies. Tor Ekeland Let's talk about regulating your compliance scheme right because you guys are just the wild wild west right now. You guys are they're hiring you left and right they're spending all sorts of money on you. Tor Ekeland You know millions and millions of dollars are flying into this completely unregulated business and I actually think there need to be laws about taking jobs from companies that you contract to when you're a prosecutor or an investigator because that is just distorting distorting justice. Tor Ekeland They should just remove entirely any kind of profit incentive for anybody working on a case because like I look at Romans case and I look at other cases and I just see it completely completely distorting things right and it needs to stop because if you really do believe in justice if all that crap that they serve up about DOJ we really believe in justice well OK put your fucking money where your mouth is then commit to not taking a high paying job from any of the contractors that you're working with then I'll believe you because your actions will speak louder than your words because right now I'm watching everybody go right over to chain analysis you know get big payouts going to Binance you know doing book interviews the whole nine yard right. Tor Ekeland But you want to tell me you're for justice OK put your fucking money where your mouth is. Doug All right, man, I love that. That was... Doug That was fantastic, that's gratuitous coffee guys, you too can speak the words of liberty and truth, just drink some gratuitous coffee. Mike Hassard I think that one of the ways that we can combat this is try to set standards in this field of digital forensics, and it's been lacking left, right, and center. I think that if we get a conference put together, something like this, where people can come together and discuss how we're going to set standards, maybe put together some academic peer -reviewed papers where people open this discussion to the public, I think that could go a long way. Mike Hassard A conference for digital forensics and blockchain surveillance in an effort to set standards in the field would be a great first start. So that's something I think we'd like to do and work on. Doug That's interesting. That's interesting. I'd like to hear where other people stand on that. Like, did you guys talk to any of the Bitcoin privacy people about that concept? Tor Ekeland Yeah, a little bit like, I mean, I agree with Mike. Yeah, we actually were talking to some people last night about it, right? Like, and I mean, it's common sense, right? Like you want like, you know, doctors and everybody, we've got lawyers. Tor Ekeland We all have professional standards. Why doesn't this field that is like reaching in every aspect of our financial life? Why is it completely unregulated? I mean, as a sitter and I think about it, like here's this company and these law enforcement agencies that want to regulate what we do financially, yet they're doing it in a completely unregulated way. Mike Hassard Yeah, it's crazy. I think that's the big first step, you know, and I think if if we can get the right people on board and put the right minds together, people have the sway, the credit, the followers, the money, you know, we can we can change the world on this front. Doug Yeah, I got to think more about it where I was like, obviously, for me, like less is more. Right. I hear regulation now. I hear like other, you know, the kind of the cypherpunk take is let's build tools that they can't fuck with in the first place. Doug Right. That's why ultimately, you know, I see weakness with with Bitcoin and I see its ledger as ultimately being a flaw, because it does create this attack surface and they're going to take advantage of it and you can't expect them not to. Doug From when I first saw the, you know, the rise of chain analysis companies, I was always like, well, you know, that that that you can't blame them for for that blossoming and happening. Right. It is ultimately leading to corruption. Doug But it made sense that it that it was created because there's this attack surface that exists there for it to happen. So I'm more I'm usually more aligned with the side of we just have to build something that they can't that they can't attack. Doug In the first place and use regulations to to essentially manipulate. Tor Ekeland I'm all for multiple attack vectors, right? So, like, I mean, what you say makes sense to me, and I just think also, if you have that front, it's a multi -front war, right? If you have that front, you've got the narrative front, you've got the, well, that's, you're gonna regulate us, we're gonna regulate you, there's a political battle, and I think everybody, you know, everyone has different superpowers, and I think, you know, as a group effort, we all, if you find what you're good at, pick your attack vector and go for it, you know? Tor Ekeland Because it's not, I don't think there's any simple solution to it, but this war's not going away, right? This is just, this is, I mean, in a certain sense, you're always fighting for liberty, and we're just the latest group fighting on this side for it. Doug You think we could win on cash as a human right argument? Because that's a simple meme. A lot of people, like I talked to my parents, get it right away. They see that cash is disappearing. And they realize that that's not right. Doug Cash should exist. People should be able to make transactions peer to peer without the whole world knowing about it. You think we could potentially win on that front, just that concept of the freedom to transact. Doug Cash is a human right. Mike Hassard Certainly, you know, one of my favorite quotes that I've heard through the course of this travel is, privacy is normal. You know, and that seems to be a very clear phrase that just sticks with everybody. Mike Hassard It is normal. You know, you don't want the government or blockchain surveillance companies peeking in through your windows and seeing, taking a look at your financial stability or something. And another thing that has really, people have really responded to well, especially capitalist, right, is if you can see how much money is in someone's account, if you're trying to do it, make a business deal with somebody and they can see you have ten million dollars of Bitcoin in it, you lose a lot of negotiating power if you're doing another business relationship using Bitcoin, right? Mike Hassard So the ability to see through and be able to see people's assets generally is not good for capitalism. And I think that's one of the, one of the, you know, attack vectors we can take when we're trying to, you know, limit the negative effects that blockchain surveillance can have on us. Tor Ekeland Second that and I really like that what you're saying and like I think there's something there with what we're saying like And I don't know what the slogan is like as you guys were saying and I'm like, okay What's the catchphrase like is it? Tor Ekeland You know financial privacy is a fundamental right cash is a fundamental right because there's something that nobody Nobody I know likes paying taxes, right? Nobody likes the government being up in their business I mean, that's why we've got the Fourth Amendment Right, like so there's something really key there that if we could like lock into Like just you know, why is the government assuming that every why does the government have the right to look at every one of my financial? Tor Ekeland Transactions, aren't you saying to me that oh, I must be some potential criminal Shouldn't it be you come in and investigate me after you have evidence of me committing some fucking crime, right? And this sort of like big nanny state. Tor Ekeland It's what's fucking Orwellian? Doug Yeah, the entire the entire Bank Secrecy Act is basically guilty until proven innocent, right and now they're Crypto allows them to do that on steroids because because of the traceability of most blockchains We could talk about all this stuff forever. Doug So to bring it bring it full circle Well, I will finish up with because we didn't talk about it, you know, it's not over yet You guys lost the trial, but you're gonna appeal give us some insight to there on what that might look like what the the big the biggest arguments you have are and You know likelihood and and basically and also what perhaps people can do to help you guys win on appeal Tor Ekeland Yeah, so as a federal criminal defense lawyer, I'm well aware of the statistics that less than 1% of federal criminal trials ended in acquittal. So this is nothing new to me. And so acquittals are great. Tor Ekeland That's what we were going for. We thought we had a really good shot on this one, and so we were disappointed by the verdict. But we're definitely appealing. That's going to be a one to three year process. Tor Ekeland Roman's being sentenced July 15th. After that, we can file our notice of appeal because you got to do it after the sentencing in case you want to appeal something in the sentencing. We think that the biggest issue is one called venue, which is the United States Constitution requires all federal criminal trials to occur in the state and the district where the crime occurred. Tor Ekeland The reason you have that rule is during the American Revolution. The British Crown was arresting revolutionaries in Philadelphia and putting them on trial in London. Very different jury. And look at Roman here. Tor Ekeland He's living in Sweden, never set foot in DC, and he's arrested when he lands in LA and dragged to DC and put on trial. In this case, the only thing the government admitted this, the only evidence they have of anything happening in DC are IRS agents mixing money through Bitcoin fog. Tor Ekeland They did this one transaction in 2019 where they sent the message to the Bitcoin fog help desk saying, hey, we want to launder drug money. No response. That's their basics for jurisdiction. We said early on in Emotionism is, listen, you can't. Tor Ekeland This is not constitutional. And there's a bunch of case law, I think, that's on our side on this. The judge, unusually, and I've never had this happen in a federal criminal case before, he didn't issue a written decision on our Emotion to dismiss. Tor Ekeland Even though he had a year and a half, two years to do it, we asked him right before trial to rule on it. He ruled from the bench saying, you know, denied. And I honestly think the reason for that is that he was worried about that issue and didn't really want to put something on writing because district judges don't like to get reversed. Tor Ekeland And he could see how sticky an issue it is. We're also going to be arguing a whole bunch of stuff because as you go through trial, because of that less than 1% acquittal rate, you know you've got to preserve issues for appeal at trial. Tor Ekeland So there's issues about the experts. There's stuff that happened at trial where we objected to this one witness on the grounds that, look, it looks like he's about to give expert testimony. And we had a five minute conversation or whatever with the judge side by the jury kid in a year. Tor Ekeland And the judge overruled us. And then like 30 seconds later when they start the testimony, the witness does exactly what we said we objected to and the judge said wasn't going to happen and instructed the witness not to do. Tor Ekeland And that was making an attribution to Roman as somebody controlling an address that they had no evidence for. So I stood up and objected. It was stricken from the record. But there was stuff like that kind of all the way through. Tor Ekeland And so, you know, it's an uphill battle. You've got what an 8% reversal rate on appeal. We've done it a couple of times. Actually my first big case was like a venue one, but you know, in terms of what people can do, I'm going to turn it over to Mike because Mike's got some good advice on how people can help out. Mike Hassard So we're definitely going to need to expand the discussion on this case as we approach the appeal, right? The appeal is different than the trial. The trial is about the facts. The facts have now been decided by the jury. Mike Hassard Even if they're incorrect, those are the facts for the record now. And for the appeal, we really have to focus on legal procedures that were not followed or constitutional, you know, guidance that was not followed. Mike Hassard And this kind of stuff is more of legal arguments at the appellate level compared to factual arguments at the trial level. And part of changing and setting up a positive outcome for the appeal is to get the public discourse talking about these problems, because a lot of them are treated differently in different districts in the United States. Mike Hassard Like, the circuit court, Ninth Circuit in California, came out with a decision on venue that favored us. We brought it up with the judge in D .C., and he didn't even respond to it. Did he respond? I don't think he did. Mike Hassard Yeah, he never responded to it. And, you know, it's this kind of thing. These kind of circuit splits at the appellate level. This is also what these are the kind of issues that the Supreme Court would hear as well. Mike Hassard So, you know, even I'm hoping that the appeal, if we were lose, is still not the end of this fight. And we're going to keep on fighting until we can't fight anymore. Tor Ekeland we're fighting to the end and that that you know that's could be like whatever to habeas corpus petitions getting whatever denied 10 years from now but like i'm sticking we're sticking with this case to the end like i i just i just this i 100% convinced he's innocent like and you know like he just they just this is a cautionary tale for everybody and anybody who deals with crypto or anything or even who's just concerned about government overreach this is a scary case because this could be anybody Doug your Bitcoin transactions can and will be used against you. It's crazy. Alright guys, thank you so much. That was, that was fantastic. As always, uh, I've watched you guys from, from day one, right? I think we, I had you on my, I think you're, I think we're the first show. Mike Hassard You were a huge part for getting a public discourse about Roman's case as we prepared for the trial. I think Monero -Topia was the first podcast we did. And from that, I think Matt Odell picked us up when we were on the Citadel Dispatch. Mike Hassard And from there, it really took off and we've done a bunch of these now. So it's great to be coming back and talking with you on, this is Monero -Topia, right? Or Monero -Topia. I love talking with you, regardless of what it is. Mike Hassard So thank you very much. Doug Thank you. Thank you. Got any chance we see you at Monero Topia in Argentina? Oh, fantastic. All right, guys. Cheers. Thank you. That was awesome. Thank you.