Blockchain analysis help needed. Major money laundering case

[ExpertNeeded]

Hello,
I am looking for help with blockchain analysis.  I am a bitcoin trader who has been charged with money laundering by the police.  They are trying to send me to prison for up to 6 years. I need to investigate the case against me and need help with blockchain analysis.
All bitcoins I have ever bought have been in good faith, I have broken no laws and followed the advice of my lawyer and my accountant.  
In the case against me the Netherlands police, and the FBI, state that a large number of bitcoins that have come through my wallets and trading accounts have come from darknets sites.  They have provided no evidence to collaborate this, they have only stated that they did blockchain analysis using blockchain.info and used the website https://www.chainalysis.com/
I need help to investigate these claims.  Is there anyone out there with the technical knowledge that I lack to investigate this?
Thank you

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[Kewde]

Hi,

Make sure to have a backup of all your transactions you've made to and from ALL the exchanges you've traded with.

If you still got every log of transaction and trades, then that proof should suffice to build up a whole history.


---

On the other hand, for the sake of preventing abuse by third parties, falsely screwing you over you should use altcoins like ShadowCash, Monero or Dash to cryptographically break the links and traceability of your transactions.

I'm an avid SDC supporter, but in case big transactions I suggest using Monero or Dash because their volume is a lot bigger.

[achow101]

In order to do this, we would need to know all of your Bitcoin addresses. The police would have also needed to have known this.

Next, you would need to provide an explanation for each transaction, where you got the money from and where you sent to. This can be checked through blockchain analysis. It may be possible to claim that you did not know where the Bitcoin came from when you received it.

[ExpertNeeded]

Thank you for relpying. I will update the thread later today with all the wallet addresses I used.  The police have not give the addresses for the darknet wallets. which is the part I dont understand

[AgentofCoin]

Thank you for relpying. I will update the thread later today with all the wallet addresses I used.  The police have not give the addresses for the darknet wallets. which is the part I dont understand

Before you post your addresses on the internet, which can help or hurt your future case,
you should elaborate all the details you can. For example:

1. Estimate, how much were you trading per day/week/year?
2. Where were you purchasing your coins?
3. Did you mix your coins or were the coins pre-mixed?
4. Do you recall irregular suspicious communications with your sellers/buyers?
5. When you sold BTC, how was this done? Online or P2P, etc?
6. Etc. any other info that would be helpful for your defense.
7. Did they provide the written complaint or document of your charges?

Providing all your addresses may be providing the prosecution with addresses they
currently do not know of or can add to your incrimination.

It is likely that for their case to be successful, they would have needed to have been
watching you for a long time and a majority of your btc came directly from illegal sources
and they have proof that you know this and willing participated. If that is not the case here,
then their case is BS since all bitcoins at some point have been circulated through the darknet.
The question then is, how close is your addresses to known "darknet" addresses and what did
you reasonably know.

Obviously, I do not know the laws in your jurisdiction, so this is just my opinion and not legal advice.
I advise that you obviously get a lawyer for this matter that has some knowledge of crypto-currencies
if possible.

[Shiroslullaby]

Wow this is actually very scary.
I assumed that the Feds were watching BTC and anyone who was moving a large amount of coins, but this is proof.
I'm curious to see the amount of coins OP was moving. I would guess it was a lot for them to actually arrest you on charges of money laundering.

How are they proving that you are linked to the bitcoin addresses?
Were the coins ever converted into cash?

[ExpertNeeded]

TRANSLATED FROM THE DUTCH POLICE FILE - hence it sounds abit weird............


Analysis bitcoinwallet
I have the bitcoin addresses provided by the ATF (Alcohol, Tabacco, Firearms in USA) which would have been used by <suspects name>, surveyed in blockchain.info. I saw this bitcoinadressen be used during the period 20 June 2014 until September 30, 2015. I saw that in total 32.602,9B65 bitcoins.

Bitcoin addresses of suspect on Kraken.
1GRwJvpzZJDtwTbEWeqJv42YJ93hEHVvE4                20-06-2014 to  31-12-2014      7.204.8191 bitcoins
137TSxYDMjcyzmQ4GfvAxBFzjuN8ee74cn                 19-12-2014 to 14-02-201 5      9.459,8435 bitcoins
1FiisocqKRgkorBxQfv7eJZKDonaYaKqhS                    12-02-2015 to  02-08-2015     7.031.4014 bitcoins
1AixaykEQ4kdo67v2rzr2gjrzTZJ3KV9CD                    24-02-2015 to 25-05-2015       1.167,2325 bitcoins
1UCBGwueY19rn6GDMhqMPCg4VEpknHNqr              17-03-2015 to 30-09-2015        7.743,6900 bitcoins
Total  bitcoins 32.602,9865

I have done with the aid of Chainalysis.com on the basis of the transaction <suspects name> methodology of investigation into the bitcoinadressen from where large numbers of bitcoins to the bitcoinadressen provided by the ATF  have been sent. I saw that the were received within the aforesaid period bitcoins bitcoinadressen provided by the ATF from the following bitcoinadressen:

1JCtnaiHWo4sg8DzHbcSbyrjmsoEUtaWDY
15JUqgcmpkiWS3ZCBYMFEcqzSVkiBKByxt  
16pTvieLus9xcHvXrn6FjCgpb5yZzHrPJD
12jDrFo2STAvaJkjru3vnE6V76rWub8adQ
1MM1jJRF4RZNiTqfD9PwR1CB7qTDzuTrZN
1949A61PjFRnJXjW7ZGU2Wm6bFvHXT875


Under the Purchase Method <suspects name> 'can aforementioned six bitcoin addresses are called' own bitcoinadressen of bitcointrader '(see below diagram)

Bitcoin trader
The bitcoin address of bitcointrader  >>>send bitcoins >>>> Bitcoin address of bitcoin trader on Kraken

I then using chainanalysis.com examined whether large quantities of bitcoins (50 bitcoins or more) from Dark Markets known as Abraxas, Agora, Alphabay, Evolution, Middle Earth, Nucleus, Pandora and Silk Road 2 via bitcoinadressen of vendors to six were sent bitcoinadressen said. (See the diagram).
 
Bitcoin address of Darknet Vendor >>>send bitcoins >>>> Bitcoin address of bitcoin trader

By only transactions from 50 bitcoins or more between their own bitcoinadressen of vendors and private bitcoinadressen of bitcointraders and use of so-called bitcoinmixers disregard, I have established a so-called lower limit. I make from it that 23082.4519 bitcoins from Dark Markets received on bitcoinadressen of <suspects name> (see below).



1JCtnaiHWo4sg8DzHbcSbyrjmsoEUtaWDY    6039BC
15JUqgcmpkiWS3ZCBYMFEcqzSVkiBKByxt    6148BC
16pTvieLus9xcHvXrn6FjCgpb5yZzHrPJD      3079BC
12jDrFo2STAvaJkjru3vnE6V76rWub8adQ    4205BC
1MM1jJRF4RZNiTqfD9PwR1CB7qTDzuTrZN   1926BC
1949A61PjFRnJXjW7ZGU2Wm6bFvHXT875   1683BC
Total 23082 Bitcoins

------------------------------------
So the main question I have is what are the bitcoin addresses of these darknet Vendors or darknet sites??  The file makes no reference to the actual addresses.   Has anyone used the site that they state?  chainanalysis.com.  Can anyone help me to analyse the information above,  as the police have not provided anything other than this.  

To answer some of the questions.  I am a cash trader.  I bought bitcoins for cash, I would then later sell the bitcoins at an exchange (like kraken), hopefully for a profit.    This is all completly legal.  The addresses above are all from the proscutions case.  The FBI said I was one of the top 3 'íllegal' bitcoin traders in the world.   I made no secret of my activites. I used my own bank accounts, I informed kraken what I was doing. I advertised on localbitcoins.com with my real name. I did not mix coins, or try to hide the origin of coins.  I met in public places.  I told the tax authorites the money I was making.  I took advice from my lawyer and followed the law fully.  If I had an suspicion of illegal activity I would not deal with the people. I informed the police of my activites when I was involved in a robbery a few years ago while doing a bitcoin trade.   The police have only provided the details I have given above (aswell as a huge case file but this is the only part on the actual bitcoins origin). They have arrested none of my customers (or atleast they are not mentioned in my police file).  I do not have a criminal record.

I was under suvilance for a couple of months.  Phone tapped, being followed etc etc.  The only link to the "darknet"is the details they have provided above, which is the part I cant understand. If they havent proven that they have come from illegal activites how would I know they had?  And we are talking the power of the ATF, FBI, National police here.  

My home was raided 4 months ago, the police took all my assets and computers,  I spent 3 1/2 months in prison since my arrest,  I was then released.  My court date is in approx 2 months, like I said they want to give me up to 6 years in prison.   This research is for part of my defense.

I have good lawyers working on my case but they do not know about blockchain analysis, nor do I.

Any help is greatly appreciated!

[achow101]

Disclaimer: I am not a lawyer, so take my replies regarding legal stuff with a grain of salt.

The translation is a little hard to understand.

So, If I read this correctly, they think that the first block of addresses are your kraken deposit addresses.

Then the next block of addresses are addresses that have sent Bitcoin to your kraken addresses.

There is no proof that you own those addresses nor that you sent those Bitcoin yourself unless those addresses are somehow spend linked to an address that you own. Because of the pseudonymous nature of Bitcoin addresses, you could say that you did not know that those Bitcoin came from darknet markets.

Since you say that you are a cash trader on localbitcoins, did you keep good records of your trades? Do you have records such as the name of the person, amount, address that they sent to, for each trade? Maybe also transaction ids for each trade? That will probably be helpful for you in same way in court. With those records, you could try to contact the people you traded with and ask them to testify that they did in fact trade Bitcoin with you and that you aren't cashing out from darknet markets.

So the main question I have is what are the bitcoin addresses of these darknet Vendors or darknet sites??  The file makes no reference to the actual addresses.   Has anyone used the site that they state?  chainanalysis.com.  Can anyone help me to analyse the information above,  as the police have not provided anything other than this.  

Chainalysis is a company that is trying to deanonymize Bitcoin. They don't offer any free services and their service requires actually contacting the company, it isn't a software. You can however, use https://www.walletexplorer.com/ which groups addresses together by spend links. The person that made that site now works at chainalysis.


I don't quite know how kraken works as I haven't used it before. Do you use the same deposit address or does it change for each deposit?

[AgentofCoin]

Disclaimer: I am not a lawyer, so take my replies regarding legal stuff with a grain of salt.

The translation is a little hard to understand.

So, If I read this correctly, they think that the first block of addresses are your kraken deposit addresses.

Then the next block of addresses are addresses that have sent Bitcoin to your kraken addresses.

There is no proof that you own those addresses nor that you sent those Bitcoin yourself unless those addresses are somehow spend linked to an address that you own. Because of the pseudonymous nature of Bitcoin addresses, you could say that you did not know that those Bitcoin came from darknet markets.

Since you say that you are a cash trader on localbitcoins, did you keep good records of your trades? Do you have records such as the name of the person, amount, address that they sent to, for each trade? Maybe also transaction ids for each trade? That will probably be helpful for you in same way in court. With those records, you could try to contact the people you traded with and ask them to testify that they did in fact trade Bitcoin with you and that you aren't cashing out from darknet markets.

So the main question I have is what are the bitcoin addresses of these darknet Vendors or darknet sites??  The file makes no reference to the actual addresses.   Has anyone used the site that they state?  chainanalysis.com.  Can anyone help me to analyse the information above,  as the police have not provided anything other than this.  

Chainalysis is a company that is trying to deanonymize Bitcoin. They don't offer any free services and their service requires actually contacting the company, it isn't a software. You can however, use https://www.walletexplorer.com/ which groups addresses together by spend links. The person that made that site now works at chainalysis.
...

I agree with what knightdk said.

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Since they seized your computers and etc, they potentially have access to all your wallets and addresses.
The issue now is whether you have control over the "intermediary" addresses or those are truly someone elses.

There are things they will need to do that this letter does not provide:
1. They will need to prove your direct connection to the darknet account or withdrawal.
2. They will need communications with sellers to you that prove that you willing participated in a crime.
3. They will need communications with undercover agents proving you acknowledge participating in a crime.
4. They will need to prove that you actively attempted to cover your tracks and crimes.
5. etc.


I assume they will provide all their evidence against you before trial, so that you can make a defense?
Because what they have provided you is not enough evidence to prove money laundering.
Something doesn't entirely add up here.

This is just my opinion and not legal advice.

[ExpertNeeded]

Thank you for your response. Any advice on here is just to help me investigate my case further.  My lawyers will decide what information will be used in court and what to do for my defense. So please feel free to brainstorm my problem.  I wont be coming back to sue anyone  

What Im really looking for is advice on how we can check what the police have said.   They say that bitcoins have come from Darknet sites, then are sent directly to the wallets listed (Lets just assume they are my wallets for the analysis), after that the bitcoins are sent to kraken (also lets assume they are my trading account wallets)  But they didnt list the wallet of darknet sites (where they said the coins came from), so I need to check if they did come from darknet sites and did they come then directly to the wallets listed.  

I have contacted chainanalysis.com and Im waiting on a reply from them.

The police have inferred that its a simple process of throwing in a few wallet addresses into the internet and finding out the coins have come from a darknet site.  Like everyone knows the wallet addresses of darknet sites, and its something that I should of known to do.  Even though I dont find out what the customers wallet address is till they have already sent me the bitcoins (so after the trade basically)

Thank you for the link to https://www.walletexplorer.com/  but as I dont know what the darknet sites addresses are I dont know how to investigate further.

I kept records of all my trades, date amount etc etc. I was not required by law to record customer information (name, contact details etc).

Kraken you can create many new wallet addresses.  The ones they have listed, they said are all linked to me.  I cant check this as I have no computer/passwords since the seizure.  

Yes something definatly does not add up.  They have not linked me to any crimminal activity or too any of your 5 points you made (communicating to customers to commit crime/talking to undercover agents/shown that I was covering my tracks/etc).  My whole case file is about 400 pages long, too much to post on here, packed full of information that I did not hide from anyone, which the police 'uncovered' and have presented as a case against me.  The investigation is now closed and I have all the 'evidence' against me.

Let me please stress though that even though they do not have these things they could still get a money laundering conviction against me because of the large amount of money involved and under dutch law, even though they havent proven a link to crimminal activity they say that I should of assumed it was illegal. its crazy but that is the law.

Any help on the Blockchain analysis part of this case would be grealy appeciated.

 

[achow101]

Thank you for the link to https://www.walletexplorer.com/  but as I dont know what the darknet sites addresses are I dont know how to investigate further.

It's really simple since some darknet site addresses are known, and the site used that information to link together different addresses.

When you search an address, it will give you all of the transactions related to that address and addresses that are linked to it (linked by spend linking). It does this for every address and assigns each group (called a wallet) and id. If the wallet contains addresses known to belong to a certain company or person, then the wallet will be named so. So, by looking down the list of transactions for each of those addresses, we can see what wallets sent them money, and if any of them are known to be darknet markets.

[ExpertNeeded]

Thank you I'll start looking at that site

[AgentofCoin]

...
Let me please stress though that even though they do not have these things they could still get a money laundering conviction against me because of the large amount of money involved and under dutch law, even though they havent proven a link to crimminal activity they say that I should of assumed it was illegal. its crazy but that is the law.
...

Yes, but if there was no crime, it might not be laundering or conspiracy to launder.
It could be argued that you were an unregulated bitcoin exchange. (You were a btc trader after all.)

it is something to consider as a defense, since you admit you moved a lot of bitcoins.
If you purposefully laundered, you would not have paid taxes and kept records and etc.

Laundering says you were purposefully helping criminals dispose of dirty money,
but in reality you may have been operating an unlicensed money transmission business/exchange.
The differences in sentences and etc could be very different.

It may be that the penalty for illegal money transmission is less than criminal laundering.
It could also be possible that claiming to be an illegal exchange, is worse in your jurisdiction,
but just throwing it out there as a possible defense argument (for your lawyer to consider).

[ExpertNeeded]

Thank you - all suggestions are appreciated and Ill pass everything onto my lawyer, any ideas are welcome for my defense.

Does anyone know how long walletexplorer.com has been active?  and Im assuming that darknet links could be updated at anytime?  For example lets say I took 100 coins into my wallet in March 2015.  If I had done analyse on that day on walletexplorer.com, the address could of not been linked to a darknet site, then if I checked one year later it could then be linked to a darknet site as walletexplorer.com has updated the link.  Is this a correct assumption?

Thank you

[achow101]

Thank you - all suggestions are appreciated and Ill pass everything onto my lawyer, any ideas are welcome for my defense.

Does anyone know how long walletexplorer.com has been active?  and Im assuming that darknet links could be updated at anytime?  For example lets say I took 100 coins into my wallet in March 2015.  If I had done analyse on that day on walletexplorer.com, the address could of not been linked to a darknet site, then if I checked one year later it could then be linked to a darknet site as walletexplorer.com has updated the link.  Is this a correct assumption?

Thank you

AFAIK, yes that is the correct assumption. The site isn't always up to date though.

[BlockSeer]

ExpertNeeded - Blockseer would be happy to help. We specialize in blockchain analysis.
If you would like, please email us at info@blockseer.com

[Nicolas Dorier]

What you need at this point is not a Bitcoin wizard, but a lawyer.
Maybe you don't have any problem even if you don't provide anything as the burden of proof is on them. But to be sure, consult a lawyer. (I know it sucks, consider it a learning experience in Law)
It is their job to find proof on you, not you to find proof of your innocence I guess.

[BlockSeer]

Nicolas, agreed that a good lawyer is needed. ExpertNeeded said he already has a legal team. The lawyers can be helped with an understanding of the blockchain analysis and possible evidence that is being used against their client. Blockchain analysis is a new area, so the rules and standards of evidence that apply to blockchain analysis is unclear. Knowing the types of evidence and data that can be collected, and what can and cannot be shown with analysis of this data, will likely help the legal team prepare their defense.

[gielbier]

1JCtnaiHWo4sg8DzHbcSbyrjmsoEUtaWDY

Any help is greatly appreciated!

That adress in itself is interesting, considering walletexplorer has designated it as MtGoxandothers. (which means clusterfuck/privkeyleak/brainwallet/coinjoin etc) . If you want a second opinion on the analysis part, you'll have to explain a bit about your use with that address. Also, in my opinion is chainalysis often correct, but not always.
So If you are looking for a second opinion send me a pm.

[ExpertNeeded]

Thank you for your replies.

Yes I have a good legal team already, but we needed to understand the evidence the police have presented.

For now I think we have enough information without further analysis.  The analysis is not scientific proof as the police are presenting it.  Its a new technology and is not admissible in to a court of law (in the USA anyway).  Importantly what could be analysied as a 'clean' transaction one year ago could now be seen as linked to an illegal website as links can be changed at any time.