Added bonus WTF

_posts/newsletter/2023-10-01-October_2023.md

@@ -374,7 +374,9 @@ Firstly, on July 18th, **Chainalysis**' head of investigations for government so
 > 
 > ... Historically, Chainalysis **has not gathered and recorded in a central location false positives / false  negatives** because there is design to be more conservative in the clustering of addresses. In response to the Court’s inquiry, Chainalysis is looking into the potential of trying to collect and record any potential false positives and margin of error, but such a collection does not currently exist.
 
-"Looking into the potential of trying to" do science, how lovely!
+"Looking into the potential of trying to" do science, how lovely! These admissions were all [further confirmed](https://storage.courtlistener.com/recap/gov.uscourts.dcd.232431/gov.uscourts.dcd.232431.164.0_1.pdf) in-person during the [Daubert hearing](https://www.law.cornell.edu/wex/daubert_standard) on June 23rd, where Bisbee and **Federal Bureau
+of Investigation** (FBI) staff operations and virtual currency specialist [Luke Scholl](https://www.courtlistener.com/docket/60633510/53/5/united-states-v-sterlingov/) were questioned on the subject.
+{: style="text-align: justify;"}
 
 Secondly, on August 8th, **Ciphertrace** director of investigations and intelligence [Jonelle Still](https://www.middlebury.edu/institute/people/jonelle-still) filed [a 41-page expert report](https://storage.courtlistener.com/recap/gov.uscourts.dcd.232431/gov.uscourts.dcd.232431.159.1.pdf) "reveal[ing] errors, omissions, and a lack of methodological rigor" in the so-called evidence provided by Chainalysis and [TRM Labs](https://www.trmlabs.com/products/forensics), "calling the Government’s conclusions into serious doubt."
 {: style="text-align: justify;"}
@@ -396,6 +398,18 @@ Thirdly, despite much resistance from Chainalysis, it now seems possible that an
 
 > This ban on Mr. Sterlingov’s personal review of the evidence directly relevant to a core issue in this case – the inaccuracy of Chainalysis Reactor software and its lack of scientific validity – violates Mr. Sterlingov’s Fifth Amendment due process rights, particularly his right to put on a complete defense, and his Sixth Amendment rights to effective assistance of counsel and to confront his accusers.
 
+**Bonus 'What Is Wrong With This Picture?' Moment:** On November 2nd, FTX CEO Sam Bankman-Fried was [found guilty on all charges](https://www.justice.gov/usao-sdny/pr/statement-us-attorney-damian-williams-conviction-samuel-bankman-fried) of wire fraud, wire fraud conspiracy, conspiracy to commit money laundering, conspiracy to commit commodities fraud, and conspiracy to commit securities fraud; the remaining charges from the indictment, of "[conspiracy to defraud the Federal Election Commission and commit campaign finance violations](https://www.justice.gov/opa/pr/ftx-founder-indicted-fraud-money-laundering-and-campaign-finance-offenses)," may [reportedly](https://www.youtube.com/watch?v=etyPcP73Tqg) still be prosecuted at some future date. Back in April, [**New York Times**](https://www.nytco.com/press/david-yaffe-bellany-joins-technology/) (NYT) [technology reporter](https://yaffebellany.com/) [David Yaffe-Bellany](https://twitter.com/yaffebellany), writing about the the Ryan Felton case (coincidentally where Bisbee's testimony was again involved in the prosecution), stated that "[Chainalysis has come to occupy an increasingly important position in the industry](https://archive.ph/XkhB9)." 
+{: style="text-align: justify;"}
+
+> [After the FTX exchange imploded, its bankruptcy lawyers hired Chainalysis to disentangle the web of entities at the center of Sam Bankman-Fried’s empire and track the $400 million in crypto that a hacker stole from FTX’s accounts. Chainalysis has also been conducting some light diplomacy: In April, it hosted a conference in Manhattan to bring together government officials and the newly chastened crypto executives who are trying to win back their trust. Guests received socks stitched with the Chainalysis logo.
+> 
+> ... In 2021, an official at TRM emailed the Treasury Department to question its decision to award an exclusive contract to Chainalysis, according to email logs obtained through a public records request.
+> 
+> The TRM representative asked for a “rationale as to why this procurement isn’t following a competitive bid process,” according to the emails. “There are multiple providers with analogous capabilities that meet” the requirements, the representative wrote. By early last year, TRM had secured its own contract with the Treasury Department, according to a company spokeswoman. And TRM was hired alongside Chainalysis to work on FTX’s bankruptcy.
+
+According to [the testimony](https://docs.house.gov/meetings/BA/BA00/20221213/115246/HHRG-117-BA00-Wstate-RayJ-20221213.pdf) of attorney and FTX's new CEO [John J. Ray III](https://www.reuters.com/technology/ftxs-new-ceo-helped-bolster-enron-victims-recovery-2022-11-15/) to the [House Financial Services Committee](https://financialservices.house.gov/calendar/eventsingle.aspx?EventID=408483) in December 2022, Chainalysis was involved in the 'Asset Protection & Recovery' operations of the bankruptcy proceedings, which they have indeed [offered as a service](https://www.chainalysis.com/blog/chainalysis-asset-realization-program-announcement/) since at least November 2020. Neither the NYT article nor the testimony mentions the fact that Chainalysis was not only a creditor of FTX, but their compliance partner while they were still operating, monitoring "[all deposits and withdrawals](https://archive.ph/kdAAB)" as well as on-chain "[flows into and out of](https://blog.chainalysis.com/reports/defi-dexs-web3/)" the exchange ([TMIBP21](https://enegnei.github.io/This-Month-In-Bitcoin-Privacy/November_2022/#november-16th---client-whom-thou-used-to-know)).
+{: style="text-align: justify;"}
+
 ## TORNADO CASH UPDATE, CONTINUED
 
 In [TMIBP20](https://enegnei.github.io/This-Month-In-Bitcoin-Privacy/August_2022/#august-8th---ofac-sanctions-tornado-cash), [TMIBP21](https://enegnei.github.io/This-Month-In-Bitcoin-Privacy/November_2022/#november-22nd---tornado-cash-update), and [TMIBP22](https://enegnei.github.io/This-Month-In-Bitcoin-Privacy/April_2023/#april-26th---tornado-cash-update-continued), I covered the designation of Ethereum-based mixer Tornado Cash as [a sanctioned entity](https://home.treasury.gov/news/press-releases/jy1087#:~:text=REDESIGNATING%20), the subsequent arrest & pre-trial detention of developer [Alexey Pertsev](https://www.freealex.nl/#who) in the Netherlands, and related lawsuits challenging the criminalisation of mixing software. Pertsev's trial is [currently scheduled](https://twitter.com/CryptoCanal/status/1716786816362123315) for March 26-27th 2024.