Case involves CDN$1.4 million worth of bitcoin confiscated in first
crypto seizure by Canadian police, demonstrating growing demand for
cryptocurrency forensics and blockchain intelligence
SAN FRANCISCO–(BUSINESS WIRE)–lt;a href=”https://twitter.com/hashtag/bitcoin?src=hash” target=”_blank”gt;#bitcoinlt;/agt;–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
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.
“As the crypto market expands, Canadian policymakers and law enforcement
officials need to leverage external parties who specialize in blockchain
forensic analysis if they intend to build resistance to illicit
activity,” Dina Mainville, Sales Director, Canada. “Dave Jevans
demonstrated that CipherTrace can bring transparency and accountability
to illegal and fraudulent cryptocurrency transactions.”
Mr. Jevans, who has been called upon to help solve some of the world’s
largest cryptocurrency crimes, also testified about dark web markets,
how are they used, and how bitcoin transactions are traced.
CipherTrace develops cryptocurrency
Anti-Money Laundering, cryptocurrency forensics, and blockchain threat
intelligence solutions. Leading exchanges, banks, investigators,
regulators and digital asset businesses use CipherTrace to trace
transaction flows and comply with regulatory anti-money laundering
requirements, fostering trust in the cryptocurrency economy. Its
quarterly CipherTrace Cryptocurrency Anti-Money Laundering Report has
become an authoritative industry data source. CipherTrace was founded in
2015 by experienced Silicon Valley entrepreneurs with deep expertise in
cybersecurity, eCrime, payments, banking, encryption, and virtual
currencies. The U.S. Department of Homeland Security (DHS) Science and
Technology (S&T) and DARPA initially funded CipherTrace, and it is
backed by leading Silicon Valley venture capital investors. Visit www.ciphertrace.com
for more information or follow the company on Twitter: @CipherTrace and
Kesselring Communications for CipherTrace