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February 17, 2021  |   By: Max Dilendorf, Esq.

Cryptocurrency & Bitcoin Expert Witnesses

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As more cryptocurrency is bought and sold, attempts to regulate Bitcoin and other cryptocurrencies are well underway. However, many questions remain unanswered. An expert witness can help juries and judges better understand the nuances of virtual currencies and which regulations, if any, apply to the case. An expert witness will also explain how these currencies function, the unique aspects of the blockchain, and how digital assets can be traced, tracked, erased, or altered.

One of the Nation’s Leading Experts on Cryptocurrency Transactions

Max Dilendorf, Esq., founding partner of the Dilendorf Law Firm, has traveled the world as a widely sought-after speaker on topics related to digital asset transactions, and compliance with U.S. securities and cryptocurrency laws. Mr. Dilendorf’s recent speaking engagements have included the Thailand SEC, IBM, Berkshire Hathaway, and New York University, to name a few.

The Dilendorf Law Firm is uniquely qualified to serve as an expert witness in any case involving cryptocurrency and Bitcoin. Our legal and financial expertise allows us to offer high-level legal opinions, as well as digging into cryptocurrency transactions between various parties with forensic detail.

Having provided expert opinions in many forensic cryptocurrency cases, including adjudication proceedings in EB-5 matters with the USCIS, the Dilendorf Law Firm has been instrumental in settling cases pertaining to cryptocurrency and blockchain technology.

Expert Witnesses in Federal Cases Tracing Bitcoin

The Dilendorf Law Firm has been involved as expert witnesses in several federal cases regarding the tracing of stolen Bitcoin. The two cases below are examples of our experience as expert witnesses tracing Bitcoin. Both were filed in the United States District Courts.

One of the cases involved 1,000 mined Bitcoins that were unlawfully transferred to the Claimant’s BTC-e Exchange wallet, and then transferred out to another account, resulting in the Claimant being falsely accused of money laundering.  The second case involved forensic blockchain investigation of multiple unlawful transfers that compromised Bitcoin that was stolen from the former Mt. Gox exchange by hackers, including client’s property.

Why use a cryptocurrency expert witness?

Ideally, an expert witness expressing a legal opinion will be experienced in cybersecurity and blockchain applications, as this would be an important prerequisite to providing an authoritative opinion concerning the authenticity of data related to cryptocurrency, and how that data is related to the movement of the currency.

When using an expert witness of any kind, it is important to be able to build credibility for the witness and prove their qualifications to the judge and jury. Our experience in this area includes all types of cryptocurrency. Our team has provided legal expertise in high-profile cases against Coinbase, and Bitcoin Series cases involving the tracing of BTC from wallets to external pools of funds. Our opinion and testimony are often sought out by legal professionals who require a thorough understanding of digital assets.

Below are some examples of the forensic tracing that allowed our team to prove the movement of BTC from wallets on the Coinbase exchange and into external pools of funds.

Our deep knowledge of this industry allows our team to educate the legal authorities about the mechanisms of cryptocurrency, how it is traceable, and how, despite common misconceptions, transactions involving digital assets are often completely legal and publicly traceable.

The Importance of in-depth Cryptocurrency Expertise

Advising on legality and traceability of blockchain assets, we utilize not only our deep knowledge in the digital-asset legal compliance but also our vast network of professional connections, which include the major cryptocurrency and digital security exchanges, trusts, traders, and broker-dealers.

In addition to standard legal opinions related to cryptocurrency transactions, there are many other areas where a cryptocurrency and Bitcoin expert witness may be useful.

These include:

  • Immigration
  • Trials & Expert Witness Testimony
  • Litigation
  • Federal and State Adjudication Proceedings
  • Title reports
  • Bitcoin Forensics
  • Blockchain Forensics
  • EB-5 Investment “Source of Funds”

Since the initial offerings of digital securities and cryptocurrencies, our attorneys have advised early adopters and issuers of virtual assets on compliance with U.S. securities and cryptocurrencies laws and regulations, including the KYC/AML checks and the mechanics of digital asset transactions.

Our legal expert opinions and forensic reporting may contain:

  • A detailed flow of our client’s or a counterparty’s flow of cryptocurrency or other digital assets on a blockchain.
  • Assessment of sufficiency of cryptographic private keys, public records and other factors establishing ownership of cryptocurrency or another digital asset on a blockchain.
  • KYC/AML compliance measures taken at each point of the funds’ journey by clients and third parties, including exchanges and OTC traders.
  • Legal opinion on adoption, traceability, exchangeability, and legality of a particular kind of digital asset existing on a blockchain.
  • The regulatory framework for cryptocurrencies and other blockchain assets in the U.S.

Legal expert opinions and investigative reports about blockchain forensics can be effective tools, which may be essential for individuals investing in digital securities or conducting due diligence for a cryptocurrency transaction, a background check, or KYC/AML compliance. Such reporting may also be useful in demonstrating the legality of a digital asset holding to the IRS, USCIS, or another government agency.

The Dilendorf Law Firm provides industry-leading expert witnesses and related legal services, including investigative reporting, regulatory compliance, litigation, and consulting. When a legal proceeding requires an opinion or testimony from a cryptocurrency expert, our attorneys can play a key role in the outcome of the case.

Resources:

This article is provided for your convenience and does not constitute legal advice. The information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Prior results do not guarantee a similar outcome.

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