SAN FRANCISCO Blockchain security company CipherTrace today
released the details of the first Canadian court case to use a Bitcoin expert witness.
The 2015 seizure marked the first-ever use of an expert witness during a bitcoin forfeiture hearing and the first seizure
of cryptocurrencies CDN$1.4 million worth - by Canadian police.
In this precedent setting case, CipherTrace CEO David Jevans testified in a February 2019
forfeiture hearing in the Ontario Superior Court of Justice, Canada. The case involved a defendant,
Matthew Phan, who illegally purchased a handgun and trafficked drugs using Bitcoins on two dark web sites.
In response, the Ontario Attorney General is seeking to confiscate 288 bitcoins, BTC.
Bitcoin has become one of the most popular forms of payment on dark markets because users
don't have to reveal their identities. With the surge in the use of bitcoin for illicit purposes,
the demand for cryptocurrency forensics and blockchain threat intelligence to help trace and
monitor transactions is rising just as quickly.
"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," Dwayne King, Senior Manager Grant Thornton Canada LLP. Dwayne was an
Detective Constable in the Asset Forfeiture Unit and the lead proceeds of crime investigator when the
bitcoin was seized in May of 2015.
Mr. Jevans travelled to Ontario and testified that he was able to trace multiple transactions
from dark web markets Agora and Evolution into Phan's bitcoin addresses. “If I knew nothing
about the case, other than being presented with the bitcoin addresses that Mr. Phan controlled,
my analysis would indicate that this individual was dealing in drugs online,” he wrote in a report filed in court.
The issue with the cryptocurrency originated in 2015 when police obtained a search warrant for the
defendant's condo and a storage locker. They seized $2.5 million worth of narcotics including
thousands of grams of cocaine, fentanyl and MDMA and more along with evidence of narcotics
trafficking, such as addressed envelopes, baggies and scales.
Officers also searched Phan's computers and located a digital wallet containing 288 bitcoins,
then worth about $88,000. At their peak value in 2017 the coins were worth more than $7 million.
The Ontario Crown Attorney argued that Phan's bitcoins were proceeds of crime and Superior Court
Justice Jane Kelly should approve a forfeiture order for the full amount—making it the first time
for a Canadian court to confiscate crypto assets in a criminal case after a contested forfeiture hearing.
However, Phan had argued against the forfeiture, claiming he should be allowed to keep half of the digital
cash because it was not from nefarious purposes.
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.
https://en.wikipedia.org/wiki/Bitcoin
https://witnessdirectory.com/signup.php
