CipherTrace, a blockchain security company, announced today that its CEO, Dave Jevans, has been certified by a Canadian criminal court as an expert witness. Jevans testified against Matthew Phan, a drug dealer convicted for trafficking in drugs and weapons on the dark web.
One of the lawyers for the prosecution said:
“I would have loved to have access to a tool such as CipherTrace when I originally conducted this investigation in May of 2015. The report prepared by Dave really was the pivotal piece in the Crown’s case for forfeiture.”
Phan argued that half of his crypto stash wasn’t from drug dealing. He contended that only his Bitcoin was used on the dark web. However, CipherTrace’s Dave Jevans painted a different picture in court.
Although the CipherTrace news release notes that the arrest took place in 2015, a local police website states that the investigation began in March 2018 and concluded in May of 2018. However, to our knowledge, the following statement in the press release is accurate:
“At the Crown Attorney’s request, Judge Kelly qualified Mr. Jevans to testify as an expert, making him the first-ever Bitcoin expert witness qualified by a Canadian court.”
Phan used both Agora and Evolution. Agora may still be in operation. However, Evolution exit scammed in early 2015 and this reporter was interviewed by the BBC related to his reporting on the events.
Phan didn’t have much of a case, and wouldn’t have gotten far in the US either. During the search of his condo, police found nearly every drug they suspected him of selling. They also discovered his unencrypted Bitcoin wallet.
In the US, if convicted of drug dealing, the government can seize most or all of your assets pending trial. Asset forfeiture laws are so that simply carrying cash can cause the cash itself to be charged with a crime. Last month, however, the Supreme Court ruled that there are limits on how much police can seize. The Land Rover case, in which police claimed a $42,000 vehicle in relation to $225 worth of drug sales, marked the first time the government enforced the constitutional protection against “excessive fines.” The ruling doesn’t change the risk to property much, but it enables people to argue that they were excessively fined, as lawyer Wesley Hottot told the New York Times:
“The new thing is that they can now say at the end of it all, whether I’m guilty or not, I can argue that it was excessive.”
Phan lost his appeal to retain around half of his cryptos. The government is effectively $1.2 million richer as a result. Whether they will auction the coins, as other governments have done, is unknown at this time.
While every dark web marketplace seems to have a shelf life, the show goes on. The lucrative market invented by Ross Ulbricht is still a key use case for cryptocurrencies. Regardless of the authoritarian stance of governments toward recreational drugs. Such transactions would be impossible without cryptocurrency.
Last modified: May 20, 2020 12:52 AM UTC