Major bitcoin industry companies including Digital Currency Group (DCG) subsidiary Genesis Trading and bitcoin hedge fund Binary Financial are set to participate in a government auction of just over 44,000 BTC (worth $18.3m at press time) to be held on Thursday.
Announced in October[1] by the US Marshals Service (USMS), the auction, to be held from 12:00 to 18:00 UTC, will see the sale of the last remaining confiscated from convicted Silk Road operator Ross Ulbricht[2], who was sentenced to life in prison this May.
The initial auction saw investor and Draper Fisher Jurvetson (DFJ[3]) partner Tim Draper purchase nearly 30,000 BTC[4], and was seen by some as a turning point in bitcoin’s history, as many took the sale as a sign it was moving toward broader acceptance.
“In terms of the auction, it signaled a really important turning point in framing bitcoin as a legal and legitimate tool,” Sunny Ray, CEO of India-focused bitcoin exchange Unocoin[5], recalled in conversation with CoinDesk.
The mood around the upcoming auction, however, is markedly more subdued.
Genesis Trading[6] CEO Brendan O’Connor said its auction participation was simply a business decision.
“From our perspective, any time we have an opportunity to buy or sell large quantities we take advantage of it. This is just another really good opportunity to do that,” he said.
Involvement unknown
Still, O’Connor suggested he believed many previous auction participants would enter the bidding process for similar reasons, though few confirmed their involvement at press time.
Representatives from Cumberland Mining[7], Pantera Capital[8], Falcon Global Capital and investor Tim Draper did not respond to press requests regarding the auction.
Further, the USMS that indicated it would not release figures for the number of auction participants, though it has historically done so on the day of the auctions.
Elsewhere, representatives from regulated bitcoin exchanges such as Coinbase[9] and itBit[10] declined to comment on their potential involvement with the auction.
Gemini[11] bitcoin exchange founders Cameron and Tyler Winklevoss told CoinDesk they will not be participating, going so far as to criticize the strategy of doing so:
“We don’t generally participate in auctions where there is limited information, a high likelihood of a winner’s curse and a low likelihood of achieving an efficient price.”
Marketplaces on the dark web frequently processed more bitcoin transactions than BitPay last year, new research has found.
In a paper released this week[1], Kyle Soska and Nicolas Christin from Carnegie Mellon University revealed that, even by conservative estimates, the daily sales volume of six large-scale dark markets reached up to $650,000 in 2014.
The bitcoin merchant processor’s self-reported annual total, $158.8m[2], would produce a daily average of around $435,000.
The report reads:
“In the short four years since the development of the original Silk Road, total volumes have reached up to $650,000 daily (averaged over 30-day windows) and are generally stable around $300,000–$500,000 a day, far exceeding what had been previously reported.”
Previous studies have relied on the total number of listings on each site, however Christin and Soska estimated sales volume using sellers’ feedback scores, with each review counting as one product sold.
This was important, they say, as popular items could have numerous feedback scores that could even build up to over $1m in volume.
The chosen few
The researchers, who spent over two years scraping and analysing data from more than 35 different sites, also found a large discrepancy between their sellers.
A very small fraction – the elite – generated a significant profit. By contrast, the majority of sellers (70%) would never sell more than $1,000-worth of items.
“In fact, 35 sellers were observed selling over $1,000,000 worth of product and the top 1% most successful vendors were responsible for 51.5% of all the volume transacted.”
This has parallels with BitPay’s data, too. Rather than many smaller merchants receiving bitcoin payments, researcher Tim Swanson[3] suspects there are a select few retailers that account for the majority of its transaction volume, in line with the 80/20[4] rule.
In the firm’s most recent report, broken up by industry, gift card retailers accounted for 9% of its transaction volume[5]. As there are so few gift-card-for-bitcoin services around, Swanson said, the lion’s share of activity in this sector was likely to come from just one or two of its 60,000 retailers, most likely Gyft and e-Gifter – the biggest on the market.
If this logic follows for the rest of the sections on BitPay’s chart, then it paints a view not of industries, but companies each taking up a share of its volume.
This appears to be supported by the number of small merchants, listed here[6], that have chosen to drop bitcoin as a payment option following poor sales.
Mixers, gamblers, thieves
Swanson came out with his best guess[7] at the flow of money through the bitcoin ecosystem in April. What it showed was merchants sales – illicit or otherwise – make up only a slice of transactions.
In actuality, bitcoin transaction volume that takes place ‘on-chain’ is dominated by a whole host of other services. The network is a test bed for many things – stress tests included – and it costs very little to spam the network with tiny ‘dust’ transactions, for example.
The popularity of gambling sites such as Satoshi Dice, which at one point accounted for 50% of transactions[8] on the network, continue.
“In terms of on-chain transactions we know gambling transactions as a whole are likely the largest component of transaction volume,” Swanson said.
The same goes for bitcoin mixing services – of which there are at least seven in popular use. A study[9] from Kristov Atlas released last September found that 2.6% of the 20,000 bitcoin transactions in his sample fitted the profile of SharedCoin transactions.
Bitcoin is back in the headlines again this week, but for all the wrong reasons. It surfaced yesterday that two operators of bitcoin exchange Coin.mx were being charged by US prosecutors[1] for working without a money transmission license.
This is by no means the first time characters associated to bitcoin have had a brush with the law – the space has certainly witnessed more than its fair share of scams, hacks and deception.
With this in mind, let’s take a trip down memory lane and remind ourselves of some of the more high-profile bitcoin-related court cases.
1. Charlie Shrem: bitcoin’s ‘first’ felon
Back in August 2014, bitcoin entrepreneur Charlie Shrem[2] pleaded guilty to aiding and abetting the operation of an unlicensed money transmitting business.
The former CEO of bitcoin exchange BitInstant violated anti-money laundering duties in his dealings with Robert Faiella, who supplied $1m in digital currency to people buying drugs on the now defunct Silk Road[3] marketplace.
As part of his plea, Shrem agreed to forfeit $950,000 to the US government.
Having been sentenced[4] in December last year, Shrem is currently serving a two-year prison term in Lewisburg Federal Prison Camp, a minimum security prison in Pennsylvania.
2. Ross Ulbricht: life in prison
Perhaps one of the most familiar faces in the bitcoin space, Ross Ulbricht [5]was sentenced[6] in May to life in prison, without the right to parole, for operating Silk Road[7].
Ulbricht was found guilty[8] on all charges – including trafficking of narcotics, trafficking on the Internet, conspiracy to commit money laundering, and computer hacking – on the first day of jury deliberations in February this year.
The ruling, considered harsh[9] by some, sent shock waves across the world and is perceived as the benchmark case that will set precedents in cases on online crime and privacy.
3. Carl Mark Force IV and Shaun Bridges: Silk Road saga
Handed down by US District Judge Katherine Forrest in New York, Ulbricht’s life-long sentence put an end to a year and a half-long saga which saw the emergence of various bitcoin auctions[10] as well as the surprise indictment of two former federal agents[11] involved with the Baltimore-based Silk Road investigation.
In a twist of events[12] worthy of a Hollywood blockbuster, Carl Mark Force IV, a former Drug Enforcement Administration (DEA) agent admitted to stealing over $700,000 worth of bitcoin whilst working on the investigation. Force, the lead undercover agent, who communicated with Ulbricht, said he had used fake online personas to steal bitcoin from both the US government and the investigated parties.
US Secret Service special agent Shaun Bridges is also expected to plead guilty[13] to charges of money laundering and wire fraud during his time investigating the online drugs bazaar. Court documents[14] in March indicated Bridges had diverted $800,000 in digital currency to his personal bank accounts without receiving prior authorisation from law enforcement officials.
4. Mark Karpeles: the disgraced CEO
The disgraced CEO of the now defunct bitcoin exchange Mt Gox came under scrutiny[15] after the exchange filed for bankruptcy following the loss of approximately 850,000 BTC (more than $450m at the time) in February last year.
In April 2014, the former CEO was subpoenaed by the United States Department of the Treasury’s Financial Crimes Enforcement Network. However, Karpeles declined to appear to testify[18].
According to some media reports[19], Karpeles was allegedly found guilty of fraud when he was tried in absentia in his native France in 2010. He was sentenced to a year in jail but has not yet served his sentence.
The CEO was also implicated[20] in the Silk Road trial, after Ulbricht claimed Karpeles was “Dread Pirate Roberts” – the pseudonym used by the marketplace’s mastermind. Karpeles denied the claims publicly.
In essence, the battle has seen Ripple Labs[22], its founder and ex-employee McCaleb and the Stellar Development Foundation – McCaleb’s current employer – fight over $1,038,172 currently being held by digital currency exchange Bitstamp[23].
Both Ripple and Stellar have voiced their opinion on whether the court should grant Bitstamp’s request to be discharged from the court case, after the exchange filed a complaint for interpleader on 1st April[24], where it requested permission from the court to transfer the funds to Stellar.
The argument put forward by Bitstamp is that it was unable to determine whether Ripple Labs or the defendant, Jacob Stephenson (McCaleb’s cousin) was the rightful owner of the funds in dispute.
It is believed that Stephenson sold the XRP – the Ripple network’s native currency – to Ripple through a sale on Bitstamp, an action that, according to Ripple, was done on McCaleb’s behalf in violation of a settlement agreement.
6. GAW Miners: breach of contract charges
GAW Miners is facing non-payment and breach of contract charges following the filing[25] of a suit by the Mississippi Power Company (MPC).
The company is requesting repayment of approximately $224,000 for services as well as almost $50,000 in installation costs.
Additionally, MPC is looking to collect a further $73,493.48 for breach of contract charges.
A couple of months after the filing was submitted, MPC requested[26] a default judgement in its favour against GAW, citing the firm’s unresponsiveness.
7. Bryan Micon: avoids prison
Having avoided a maximum sentence of 10 years in prison, Bryan Micon, who ran the now-defunct[27] bitcoin poker site Seals with Clubs[28], pleaded guilty[29] to one count of operating an unlicensed gambling site in the state of Nevada.
Micon will have to pay a $25,000 fine[30] and serve a probation term, the duration of which is yet to be determined.
Additionally, the former operator will have to forfeit property seized during a raid carried out at his home; including $900 cash, around 3 BTC and electronic equipment.
Former Drug Enforcement Administration (DEA) agent Carl Mark Force IV, has admitted to stealing over $700,000 worth of bitcoin while running the Baltimore Silk Road investigation.
Force, the lead undercover agent in communication with Ross Ulbricht[1] – the mastermind behind the online drug marketplace now sentenced[2] to life in prison – admitted using fake online personas to steal bitcoin from both the US government and investigated parties.
He pleaded guilty to charges of extortion, money laundering and obstruction of justice.
In connection to his plea, Force admitted he had offered to sell law enforcement information regarding the ongoing Silk Road[3] investigation to Ulbricht. He also pleaded guilty to entering into a $240,000 contract with 20th Century Fox Film Studios for a film concerning the government’s investigation into the dark web marketplace, without obtaining prior approval from the DEA.
Assistant Attorney General Caldwell of the Justice Department’s Criminal Division said in a statement[4]:
“Seduced by the perceived anonymity of virtual currency and the dark web, Force used invested online personas and encrypted messaging to fraudulently obtain bitcoin worth hundreds of thousands of dollars from the government and investigative targets alike.”
Caldwell continued: “This guilty plea should send a strong message: neither the supposed anonymity of the dark web nor the use of virtual currency nor the misuse of a law enforcement badge will serve as a shield from the reach of the law.”
Now awaiting sentencing, Force’s hearing is scheduled for 19th October.
The full accusations against him are detailed in a federal complaint[5] submitted in the Northern District of California in late March.
US Secret Service special agent Shaun Bridges will plead guilty to charges of money laundering and wire fraud stemming from the government investigation into the illicit online black market Silk Road.
Details first emerged of Bridges’ alleged improper actions in March[1], when court documents revealed that Bridges had diverted $800,000 in digital currency to his personal bank accounts without authorization. Bridges was charged alongside Carl Mark Force IV[2], a Drug Enforcement Administration (DEA) agent also working on the case.
Notice of the agreement was filed in the US District Court Northern District of California on 17th June, with the formal court filing including the request that Bridges will enter his guilty pleas on 31st August or 1st September, depending on court availability.
The filing indicates that Force completed 10 wire transfers from proceeds of his illicit actions on Silk Road to bank accounts at Quantum Fidelity and PNC Bank. Nine of the wire transfers were for amounts exceeding $99,000, according to a separate 16th June filing, with the largest totaling $225,000.
As part of the agreement, the US government has moved to request that Bridges relinquish any property traceable to his illicit actions and be forced to pay “a money judgment equivalent to the amount of property” involved in the violations.
Bridges was assigned to conduct forensic computer investigations as part of an effort to locate the Silk Road servers for the Baltimore Silk Road Task Force.
A full copy of the 16th June court filing can be found below:
Bitcoin in the Headlines is a weekly look at bitcoin news, analysing media and its impact.
Bitcoin’s Wild West days may be numbered, or so the headlines would have us believe.
This week saw the release of the final version of the BitLicense, New York’s long-awaited, and still heavily debated, state-specific regulation for bitcoin businesses. Unsurprisingly, the news was extensively covered in the media, and often heralded as a milestone in the evolution of the emerging technology.
Many stories used legitimizing language and headlines that foreshadowed that bitcoin had taken yet another step toward inclusion in the wider financial world.
However, the technology’s growing pains were still on display this week, as it continued to be associated with illicit Deep Web-based activities and development issues dogged one of its most well-funded startups.
Milestone legislation
The victory lap for the BitLicense came swiftly following its 3rd June release, with the mainstream narrative all but arranged to trumpet the government’s stamp of approval.
The Wall Street Journal’s Michael J Casey wrote a piece, which noted[1]:
“Outgoing New York Superintendent of Financial Services Benjamin Lawsky released sweeping new rules for licensing digital-currency businesses in the state Wednesday, staking part of his legacy on launching a specialised regulatory regime for an industry that many experts believe could play a significant role in the financial system.”
In the article, Casey quoted Lawsky’s statements in which he voiced his belif that the legislation struck the appropriate balance between protecting customers and rooting out illicit activity, while showing commitment to not “doom promising new technologies before they get out of the cradle”.
“Whereas some have questioned why existing money transmission regulations can’t be used for virtual currency businesses, Mr Lawsky said those Civil War-era laws simply wouldn’t work for digital currency, a technology unlike anything we had ever seen before,” said Casey.
More marginalized were the many dissenting voices[2] who occasionally appeared in such content, arguing that the BitLicense would discourage the same spirit of innovation that propelled the early Internet.
Extensively covered by Western mainstream media, the news was also picked up by less likely outlets around the world, showcasing the technology’s growing appeal abroad.
Kommersant, a Russian Daily, ran a headline[3] which implied bitcoin had been legitimised as a digital currency; a loosely translated version read: “Cryptocurrency Recognised A Full Part of The Financial Market”.
The article said:
“The key provision of the new rules is that now all the companies that work with cryptocurrency, you must have a special license from the Department, which should improve the safety of customers and transparency of operations cryptocurrency.”
Such articles could no doubt have an influence on coming conversations regarding regulation that is seeking to ban the technology in Russia under rules for monetary surrogates.
Nail in the bitcoin coffin
It wasn’t all good news for bitcoin.
Following Silk Road[4] creator Ross Ulbricht’s life sentence[5] last week, it was not surprising to see how the debate around bitcoin’s use in illicit activities was reignited.
Forbespublished[6] a piece by Jason Bloomberg in which the author outlined the digital currency’s link to the Deep Web.
He wrote:
“Silk Road kingpin Ross Ulbricht’s recent conviction and life sentence was more than simply a crackdown on a massive online black market for illegal drugs. It was a nail in the coffin for the radical new cryptocurrency bitcoin, as bitcoin was the glue that held Silk Road together.”
Backtracking slightly, Bloomberg asked how significant the demise of Silk Road was for bitcoin, noting that this was part of an ongoing debate.
“Controversy, however, is nothing new for bitcoin. In fact, it seems the story of this digital currency consists of nothing but controversy,” he wrote, adding: “In fact, perhaps the greatest challenge for bitcoin is divining the technology’s true purpose. Early innovators often espoused radical Libertarian goals for revolutionising the banking system and with it, the world economy”.
“By disintermediating third parties, bitcoin promised to usher in a new world order free of market commerce,” noted Bloomberg.
Despite this, the author proves seemingly negative about bitcoin’s performance.
“Bitcoin soon became a haven for criminals – not just Silk Road, but any number of money launderers and other shady types who gravitated toward an anonymous, relatively safe method for conducting financial transactions, in particular across national borders,” he said.
The Guardian ran a piece[10] with an alarmist headline given the small number of users apparently affected, writing:
“Blockchain has issued an update for the Android version of its bitcoin wallet after discovering a critical failure which breaks the cryptocurrency’s security.”
Whether intentional or not, the latter seems to imply that Blockchain’s bug could potentially affect bitcoin as a whole, as opposed to just users who store their holdings on Blockchain’s wallets.
Writer Alex Hern explained:
“Bitcoin wallet application Blockchain has rushed to release an update after a critical bug left multiple users unaware that they were sharing a bitcoin wallet, leaving their cryptocurrency completely unsecured.”
He continued: “The bug affected users running Blockchain’s app on Android version 4.1 or older […] it resulted in one specific address being generated multiple times, leading to a loss of funds for a handful of users.”
According to Hern, the bug was due to a series of questionable development choices:
“Bitcoin wallets are typically created by randomly generating a public address and a related private key. As a result, it is important for address and key to be truly random, or else it may be possible to guess the private key by looking at the public address.”
It seems that Blockchain used two sources to create the random numbers, pulling a random number from Android’s built-in generator, and then connecting to online service Random.org to obtain the second combination.
Hern noted that on some Android devices, the built-in random number generator failed to connect and report back Blockchain’s app.
Then, the battering continued.
Michael Mimoso wrote a piece[11] for Threat Post with “Crypto Calamity For Blockchain Android App” as its headline.
Describing Blockchain as one of the busiest bitcoin wallets, the article said: “Shoddy crypto is being blamed for the loss of bitcoin for an unnamed number of Blockchain users.”
It seems that New York’s plans to regulate digital currency companies, at least for now, will do little to help solve the pain points for companies still struggling to gain wider adoption.
Ross Ulbricht, the convicted founder and operator of online black market Silk Road, was sentenced to life in prison yesterday after being found guilty of narcotics and computer hacking charges in February.
The severity of the sentencing[1] quickly set off a firestorm of comment and criticism, with debates centering on the alleged hypocrisy of the federal government and the morality of its handling of illicit Internet crime in context of its actions against the traditional financial sector.
Such criticisms, however, were interspersed with live drama, as standing outside of a New York courthouse, Lyn Ulbricht voiced concern for her son Ross Ulbricht’s safety as he heads to maximum security prison.
Lyn Ulbricht added that a medium-security prison, in her opinion, would be more appropriate given his behavior since his arrest in late 2013, but acknowledged that “with his sentence, I don’t know if that can be possible”.
During her comments, Ulbricht criticized the government for keeping Silk Road open, suggesting that federal officials should share the blame for deaths said to be tied to the dark market’s operation.
She told reporters:
“Two of those overdose deaths happened while the government had the server. They owned and controlled it, and they kept it open, open for business, and those two deaths happened. And by their logic, are they liable as well?”
Ulbricht went on to criticize the fact that some information remains under seal regarding the indictment of two federal agents accused of going rogue[3] during the US government’s investigation of Silk Road.
Defense attorney Joshua Dratel also spoke during the press, declaring his disappointment with the outcome and vowing once again to appeal the conviction.
Dratel did not immediately respond to a request for comment.
Twitter reacts
Even before the sentencing hearing, Twitter was abuzz with thoughts on the then-pending result.
Often times the law is wrong. It’s the lawbreakers who move society forward. Think Rosa Parks, or Harriet Tubman and perhaps, Ross Ulbricht.
Other comments questioned the alleged hypocrisy of federal prosecutors who demanded a life sentence and millions in ordered payments for Ulbricht’s involvement in Silk Road while major banks implicated in multi-billion dollar market rigging schemes[16] have been handed penalties that are significantly less severe, even when guilt has been admitted on the part of those institutions.
Some reacted to the sentencing outcome through donations to Ulbricht’s defense fund. One donation[17] topped 5 BTC[18], according to the #FreeRoss Twitter account.
Government celebrates outcome
Shortly after the sentence was announced, representatives in the US government soon took advantage of the occasion to celebrate its successful case against Ulbricht.
In a Justice Department press release[19], Manhattan US Attorney Preet Bharara described Ulbricht as “the face of cybercrime” and lauded the outcome of the trial, stating:
“Make no mistake: Ulbricht was a drug dealer and criminal profiteer who exploited people’s addictions and contributed to the deaths of at least six young people. Ulbricht went from hiding his cybercrime identity to becoming the face of cybercrime and as today’s sentence proves, no one is above the law.”
According to a statement attributed to US Distric Judge Katherine Forrest, the trial proves that “all stand equal before the law”.
“There must be no doubt that you cannot run a massive criminal enterprise and because it occurred over the Internet minimize the crime committed on that basis,” she noted.
Ross Ulbricht has been sentenced to life in prison without the possibility of parole for the operation of Silk Road, the now-defunct online dark market.
The sentence was handed down by US District Judge Katherine Forrest in New York today, capping roughly a year and a half-long legal process that saw multiple bitcoin auctions[1] and the shock indictment of two federal agents[2] involved in the investigation.
In addition to the prison term, Ulbricht has been ordered to pay nearly $200m. In a 28th May court filing, US prosecutors asked Forrest to require that Ulbricht pay $183,961,921 to the federal government, an amount tied to proceeds related to the operation of Silk Road during its active period.
During the hearing, Forrest is said to have rejected Ulbricht’s contention that the site’s creation was borne out of youthful naïveté.
“It was a carefully planned life’s work,” she said, according to a report by Bloomberg[3]. “It was your opus.”
According to Motherboard[4], Forrest also questioned Ulbricht’s decision to keep a log of his Silk Road activities.
“It is still unclear to me why you ever kept a journal,” she said.
Ulbricht, who ran the marketplace under the name Dread Pirate Roberts, was convicted in February[5] on seven charges related to narcotics distribution, computer hacking and conspiracy. Ulbricht’s defense is expected to appeal the conviction.
Ulbricht wasn’t the only person affiliated with Silk Road to be sentenced this week. In a Chicago court case, a well-known Silk Road vender known as “Super Trips” was sentenced to 10 years in prison[6]. Cornelis Jan Slomp previously plead guilty to drug trafficking, according to a report by Deep Dot Web.
Separately, a Louisiana man was charged[7] by the US Department of Justice yesterday with conspiracy to commit wire fraud and conspiracy to commit trademark counterfeiting. Beau Wattigney, 30, has been accused of selling fake coupons on Silk Road.
CoinDesk will continue monitoring this developing story and update this story accordingly.
Convicted Silk Road operator Ross Ulbricht faces life in prison at a sentencing hearing tomorrow in New York.
The end of the trial comes more than a year and a half after Ulbricht’s legal battle[1] with the US government first began. Ulbricht was found guilty in February[2] of narcotics, computer hacking and conspiracy charges in connection with his operation of the Silk Road black market.
As reported by Wired[3], prosecutors asked the court earlier this week that Ulbricht be given “a lengthy sentence” to dissuade other would-be dark market operators.
“The court thus has an opportunity to send a clear message to anyone tempted to follow his example that the operation of these illegal enterprises comes with severe consequences,” the letter read.
In a separate letter addressed to US District Judge Katherine Forrest, Ulbricht asked to be spared from life in prison, acknowledging the severity of his actions but seeking a degree of leniency.
“I’ve had my youth, and I know you must take away my middle years, but please leave me my old age,” he wrote. “Please leave a small light at the end of the tunnel, an excuse to stay healthy, an excuse to dream of better days and a chance to redeem myself in the free world before I meet my maker.”
Ulbricht’s sentencing hearing is scheduled to take place at 18:00 UTC.
For a complete look at the case history, view our timeline of the Ross Ulbricht legal case below.
The Silk Road case will make headlines again this week with Ross Ulbricht’s sentencing. One of the players in the still unfolding saga is Assistant US Attorney Kathryn Haun, who heads digital currency initiatives at the US Department of Justice. Haun will speak on the blockchain and transparency at Consensus 2015[1].
With Ross Ulbricht’s sentencing due Friday, the Silk Road story is a hot topic once again. But even when Ulbricht’s sentencing is complete, the saga looks to be far from over. One of the stranger twists in an already convoluted tale is the case against[2] two former Drug Enforcement Administration and Secret Service agents.
The agents, Carl Mark Force IV of the DEA and Shaun Bridges of the Secret Service, are being charged with wire fraud, money laundering and other offences for making off with more than $800,000-worth of stolen bitcoin during their investigation of Silk Road.
The lead prosecutor on the case is Assistant US Attorney Kathryn Haun, of the Northern District of California. According to the complaint, Haun’s team made extensive use of blockchain analysis to link the illicit bitcoin flows to the accused former agents.
Multi-agency taskforce
Haun’s experience isn’t limited to the bitcoin blockchain, either. She also led the prosecution against Ripple Labs, which ended in a settlement[3] and a $700,000 fine for the firm.
Haun was recently appointed the Digital Currency Crimes Coordinator at the US Department of Justice and leads a new multi-agency task force charged with looking into digital currencies that includes the FBI, Secret Service, Internal Revenue Service and Department of Homeland Security, based in San Francisco. Additionally, she will teach a course called Digital Currency and Cybercrime at Stanford next year.
Kathryn Haun, who is set to speak at Consensus 2015
Before focusing on digital currencies, Haun was a counsellor to Attorney General Michael Muksaey and was counsel to the Assistant Attorney General for National Security.
Haun will discuss data from her cases on a panel that will include Martine Niejadlik[4], the former chief compliance officer at Coinbase.
Corporate compliance perspective
Niejadlik headed Coinbase’s compliance efforts during a period of unprecedented growth for the company, as it started operations in Europe[5] and opened a US-based exchange[6]. She helped the company navigate a constantly evolving legal and regulatory landscape from November 2013.
Previously, Niejadlik ran risk and compliance management teams for Boku, PayPal, eBay and Amazon. She was a founding member of the Merchant Risk Council[7] and a lead developer of the FICO score[8], the de facto gauge of credit risk in the US.
At Consensus 2015[9], Niejadlik will discuss case studies from her experience running risk and compliance teams for 20 years, with a particular focus on her time grappling with digital currency issues at Coinbase.
