As the Silk Road show trial continues with Preet Bharara's team and Judge Forrest doing everything they can to suppress evidence that might allow for reasonable doubt, while permitting accusatory evidence without regard for its origin the battle has moved on to challenging the defense's witnesses.
Dratel seeks to bring in a figure on the fringe of Bitcoin, one Andreas Antonopoulos, who has a questionable history of promoting scams in order to present a kindergarten level overview of Bitcoin, which he just might be capable of doing. In spite of a lack of technical accomplishment or involvement in actual Bitcoin endeavors, he tends to get invited to present Bitcoin in a non-threatening manner to government groups. Bharara's prosecution wants to prevent Dratel from presenting any witness which would offer even this kindergarten level explanation of how Bitcoin works, likening it to having it witness on the stand to describe the operation of cash.
While the merits of the particular witness Dratel selected are questionable at best, the continued efforts of Preet Bharara's office to transform the criminal trial from a means of legally determining guilt to a piece of performance art leading to a certain determination of guilt is far more disturbing.
Update: The judge has ruled allowing this mentioned defense expert witness along with another defense expert witness Steven Bellovin.
The prosecution's filing is below followed by Dratel's filing:
U.S. Department of Justice
United States Attorney
Southern District of New YorkThe Silvio J. Mollo Building
One Saint Andrew’s Plaza
New York, New York 10007January 29, 2015
By Email
Hon. Katherine B. Forrest
United States District Judge
Southern District of New York
Daniel Patrick Moynihan U.S. Courthouse
500 Pearl Street
New York, New York 10007Re: United States v. Ross William Ulbricht, 14 Cr. 68 (KBF)
Dear Judge Forrest:
The Government writes respectfully to move to preclude the testimony of Andreas M.
Antonopoulos, a purported “expert” noticed by the defense in a letter sent to the Government on
January 26, 2015 (“Defense Letter,” attached as Ex. A). The subjects of testimony proffered in
the notice all are either irrelevant to the case or do not require specialized knowledge, or both. In
addition, the expert notice does not identify the opinions to be offered by Mr. Antonopoulos on
these subjects, or the bases or reasons for those opinions, and thus does not comply with Rule
16(b)(1)(C). For all these reasons, Mr. Antonopoulos should be precluded from testifying.Applicable Law
A. Rule 702
Rule 702 of the Federal Rules of Evidence provides:
If scientific, technical, or other specialized knowledge will assist the trier of fact
to understand the evidence or to determine a fact in issue, a witness qualified as
an expert by knowledge, skill, experience, training, or education, may testify
thereto in the form of an opinion or otherwise, if (1) the testimony is based upon
sufficient facts or data, (2) the testimony is the product of reliable principles and
methods, and (3) the witness has applied the principles and methods reliably to
the facts of the case.The party that proffers the testimony bears the burden of showing that it is admissible. See
Bourjaily v. United States, 483 U.S. 171, 172-73 (1987). The District Court’s exclusion of
Case 1:14-cr-00068-KBF Document 165 Filed 01/29/15 Page 1 of 72
expert testimony will be affirmed unless it constitutes an abuse of discretion. See General Elec.
Co. v. Joiner, 522 U.S. 136, 142 (1997).The party seeking admission of expert testimony must demonstrate that the testimony is
based on the witness’s specialized knowledge. See United States v. Mejia, 545 F.3d 179, 196
(2d Cir. 2008) (district court erred in allowing expert testimony “about matters that required no
specialized knowledge”). Expert testimony is inadmissible when it merely addresses “lay
matters which [the trier of fact] is capable of understanding and deciding without the expert’s
help.” Andrews v. Metro N. Commuter R.R. Co., 882 F.2d 705, 708 (2d Cir. 1989). The Second
Circuit has warned against the “uncontrolled” use of expert testimony that might have the effect
of providing “an additional summation by having the expert interpret the evidence.” United
States v. Nersesian, 824 F.2d 1294, 1308 (2d Cir. 1987). A district court must therefore be
vigilant to prevent an expert from coming “usurping the jury’s function.” Id.B. Rules 401 and 403
Rules 401 and 403 of the Federal Rules of Evidence provide that evidence is admissible
when it tends to make the existence of any fact that is of consequence more or less probable than
it would be without the evidence, but that the evidence may be excluded if its probative value is
substantially outweighed by, among other things, the danger of unfair prejudice, confusion of the
issues, and misleading the jury. “Expert evidence can be both powerful and quite misleading
because of the difficulty in evaluating it. Because of this risk, the judge in weighing possible
prejudice against probative force under Rule 403 . . . exercises more control over experts than
over lay witnesses.” Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579, 595 (1993).C. Rule 16
A defendant must “give to the government a written summary of any testimony that the
defendant intends to use under Rules 702, 703, or 705 of the Federal Rules of Evidence as
evidence at trial.” Fed. R. Crim. P. 16(b)(1)(C). “This summary must describe the witness’s
opinions, the bases and reasons for those opinions, and the witness’s qualifications.” Id. As the
Advisory Committee notes to Rule 16 explain, the disclosure requirement “is intended to
minimize surprise that often results from unexpected expert testimony, reduce the need for
continuances, and to provide the opponent with a fair opportunity to test the merit of the expert’s
testimony through focused cross-examination.” United States v. Ferguson, 3:06 Cr. 137 (CFD),
2007 WL 4539646, at *1 (D. Conn. Dec. 14, 2007) (citation omitted). If a defendant fails to
provide disclosures in accordance with Rule 16(b)(1)(C), the district court may exclude the
expert’s testimony at trial. United States v. Mahaffy, No. 05 Cr. 613 (ILG), 2007 WL 1213738,
at *2 (E.D.N.Y. Apr. 24, 2007).Case 1:14-cr-00068-KBF Document 165 Filed 01/29/15 Page 2 of 7
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Discussion
A. The “Origins” of Bitcoin and the “Various Purposes and Uses” of Bitcoin Are Not
Relevant to This CaseAccording to the Defense Letter, the first two subjects that the defense intends to have
Mr. Antonopoulos testify about are “the origins of Bitcoin” and “the various purposes and uses
of Bitcoin.” Neither topic is relevant to this case. The “origins” and “various purposes and
uses” of Bitcoin are no more relevant here than the “origins” or “various purposes and uses” of
cash would be relevant in a traditional drug dealing or money laundering case.Presumably, the defense plans to elicit testimony from Mr. Antonopoulos that Bitcoin has
a legitimate origin and legitimate purposes and uses. However, neither point is in dispute here.
None of the Government’s witnesses have testified to the effect that Bitcoin is inherently
illegitimate; indeed, both Special Agent DerYeghiayan and former Special Agent Yum
specifically testified, on direct, that using Bitcoins is not illegal in and of itself. (See Tr. 152:11-
13 (“Q. And to be clear, is there anything illegal in and of itself about using bitcoins? A. No,
there is not.”)). Bitcoin is relevant to the case only because it was the sole means of payment on
Silk Road and because it was used to launder illegal proceeds from the site. How Bitcoin may be
used in other contexts, or what uses it may have been originally conceived for, are simply not at
issue here. Moreover, allowing such testimony could confuse the jury into believing that
“Bitcoin” is somehow “on trial” in this case and that “expert” testimony concerning its
legitimacy somehow cuts against the defendant’s guilt. Because this risk of prejudice outweighs
any negligible potential probative value, the proffered testimony on these points should be
precluded. See United States v. Stewart, 433 F.3d 273, 312-13 (2d Cir. 2006) (affirming district
court’s preclusion of expert testimony concerning the legality of a certain stock trade, given that
the testimony was irrelevant to whether the defendant had lied about the trade to investors, which
was the subject of the criminal charge); see also In re Air Crash Disaster at New Orleans,
Louisiana, 795 F.2d 1230, 1233 (5th Cir.1986) (noting that “trial courts must be wary lest the
expert become nothing more than an advocate of policy before the jury” and that “the trial judge
ought to insist that a proffered expert bring to the jury more than the lawyers can offer in
argument”).In any event, the Defense Letter does not even disclose what opinions Mr. Antonopoulos
plans to offer concerning the “origins” or “uses” of Bitcoins, or what the bases for these opinions
are. It merely lists these subjects as general topics of discussion. The disclosure thus plainly
falls short of the requirements of Rule 16(b)(1)(C), and his testimony should be precluded for
this reason as well. See United States v. Valle, 12 Cr. 847 (PGG), 2013 WL 440687, at *5
(S.D.N.Y. Feb. 2, 2013) (“Merely identifying the general topics about which the expert will
testify is insufficient; rather, the summary must reveal the expert’s actual opinions.”); see also
United States v. Duvall, 272 F.3d 825, 828 (7th Cir. 2001) (“The Rule requires a summary of the
expected testimony, not a list of topics.”); Mahaffy, 2007 WL 1213738, at *3 (same).Case 1:14-cr-00068-KBF Document 165 Filed 01/29/15 Page 3 of 7
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B. The Exchange Value of Bitcoin Is Not a Matter Requiring Specialized Knowledge
and the Causes of Fluctuation in That Value Are Not Relevant to This CaseThe Defense Letter also indicates the defense intends to have Mr. Antonopoulos testify
concerning “the value of Bitcoin over time since its inception, and the cause of various increases
and decreases in the value of Bitcoin at certain points in time,” as well as “the dollar value of
Bitcoins generated through transactions on Silk Road, at various points in time, including at the
time or Mr. Ulbricht’s arrest.” These topics are not proper subjects of expert testimony in this
matter.To the extent the proffered testimony simply concerns the exchange value of Bitcoin at
various points in time, such testimony plainly does not require specialized knowledge. The
exchange value of Bitcoin is publicly available information that anyone can look up – just like
the exchange value of foreign currency, gold, or silver, or the market price of a stock. Indeed,
the defense has already successfully offered into evidence a chart, obtained from a publicly
accessible website, depicting the exchange value of Bitcoin from 2011 to 2014. (See Def. Ex. B;
Tr. 455). There is no need for an “expert” to “opine” further on this issue. See United States v.
Rea, 958 F.2d 1206, 1216 (2d Cir. 1992) (noting that lay opinion testimony is unhelpful where
the jury is in as good a position to assess the facts as the testifying witness); United States v.
Castillo, 924 F.2d 1227, 1232 (2d Cir. 1991) (the district court should not admit testimony that is
“directed solely to lay matters which a jury is capable of understanding and deciding without the
expert’s help”).To the extent the defense seeks for Mr. Antonopoulos to testify concerning the “cause” of
fluctuations in the Bitcoin exchange rate, such testimony would be both irrelevant and unreliable.
The Bitcoin exchange rate is relevant in this case only insofar as it concerns the dollar value of
the funds that moved through Silk Road or that were otherwise involved in any specific
transactions at issue in the case. Why the exchange rate was what it was on any particular given
day has no relevance to any issue in dispute. Moreover, any “expert” opinion on the cause of
various movements in the Bitcoin exchange rate would inevitably rest on speculation. The
Bitcoin market is highly volatile and unpredictable. There is no generally accepted methodology
or set of principles that one can apply to ascertain the reasons for its ups and downs. Daubert,
509 U.S. at 592-93 (in order to determine reliability of expert testimony, judge must assess
“whether the reasoning or methodology underlying the testimony is scientifically valid”); Three
Crown Ltd. Partnership v. Salomon Bros., Inc., 906 F.Supp. 876, 894 (S.D.N.Y. 1995) (“When
the assumptions made by an expert are not based on fact, the expert’s testimony is likely to
mislead a jury, and should be excluded by the district court.” (quoting Tyger Const. Co. v.
Pensacola Const. Co., 29 F.3d 137 (4th Cir. 1994))).In any event, the Defense Letter does not describe what fluctuations in the Bitcoin
exchange value Mr. Antonopolous will testify about, what opinions he will provide concerning
those fluctuations, or what the bases for these opinions are. It simply lists the “the cause of
various increases and decreases in the value of Bitcoin at certain points in time” as a “subject” on
which the witness will testify. Again, this disclosure does not satisfy the requirements of Rule
Case 1:14-cr-00068-KBF Document 165 Filed 01/29/15 Page 4 of 75
16(b)(1)(C) and fails to give the Government sufficient notice to prepare for effective cross-
examination. The proffered testimony should therefore be precluded.
1C. How to Use Bitcoins and How to Track Transactions on the Blockchain Are Not
Matters Requiring Specialized Knowledge, and Any More Technical Aspects of the
Bitcoin Network Are Not Relevant to This CaseThe Defense Letter also states that the defense intends to have Mr. Antonopolous testify
concerning “the mechanics of Bitcoin transactions, including explanation of Bitcoin wallets,
accounts, exchanges, and the [B]lockchain,” “the ability to track transactions and participants in
Bitcoin transactions,” and “the ability to tie Bitcoins from Silk Road to Mr. Ulbricht.” In
essence, the proffered testimony amounts to testimony concerning how to use Bitcoins and how
to track transactions on the Blockchain, neither of which requires specialized knowledge and
both of which have already been explained in the Government’s case.The “mechanics” of Bitcoin transactions to which the Defense Letter refers – “wallets,”
“accounts,” “exchanges,” and the “[B]lockchain” – are concepts familiar to any layperson who
has ever used Bitcoins and can be explained in lay terms to the jury. Indeed, multiple
Government witnesses – including Special Agent DerYeghiayan and former Special Agent Yum
– testified concerning these concepts in the Government’s case without being qualified as
experts. As former Special Agent Yum explained, a “wallet” is a computer file that enables a
user to make transfers from his “addresses” (i.e., accounts) on the Bitcoin network. As Special
Agent DerYeghiayan explained, “exchanges” are businesses that exchange real currency for
Bitcoins and vice-versa. And as both witnesses explained, the “Blockchain” is the public ledger
where all Bitcoin transactions are recorded. An “expert” is not needed to explain these concepts
any more than an expert is needed to explain how to make an online payment using Paypal or
how to execute a stock purchase on E*Trade. See United States v. Amuso, 21 F.3d 1251, 1263
(2d Cir.1994) (district court should not admit “expert testimony where the evidence
impermissibly mirrors the testimony offered by fact witnesses, or the subject matter of the
expert’s testimony is not beyond the ken of the average juror”); LaSalle Bank Nat. Ass’n v. CIBC
Inc., 08 Civ. 8426 (WHP), 2012 WL 466785 (S.D.N.Y. Feb. 14, 2012) (“[A]n expert witness
may not offer testimony which merely rehashes the testimony of percipient witnesses.”).By the same token, expert testimony is not required to explain how to “track” Bitcoin
transactions on the Blockchain – including how to identify transactions on the Blockchain
reflecting transfers from Bitcoin addresses associated with the Silk Road servers to Bitcoin
addresses associated with defendant’s laptop. Tracking Bitcoin transactions simply involves
looking up a Bitcoin address on the Blockchain and seeing the transfers flowing in or out of it. It1
Even if the defense were to provide supplemental information sufficient to provide adequate
notice, the Court should hold a Daubert hearing to determine whether Mr. Antonopolous’s
opinions on the causes of fluctuations in the value of Bitcoin are reliable and would be likely to
assist the jury, given the facially speculative nature of the subject matter. See, e.g., Nimely v.
City of New York, 414 F.3d 381, 396-97 (2d Cir. 2005) (holding that district courts have a
screening function to evaluate the qualifications of an expert, the reliability of the expert’s
opinions, and the relevance of the proposed expert testimony).
Case 1:14-cr-00068-KBF Document 165 Filed 01/29/15 Page 5 of 76
is conceptually no different from looking at bank account records to check for transfers flowing
from ne account to another. Just as an expert is not required to explain that ministerial task –
even if automated in some fashion – neither is one required to explain the concept in the context
of Bitcoins. Cf. U.S. v. Baker, 496 Fed. Appx. 201, 204 n.1 (3d Cir. 2012) (phone company
representative’s testimony concerning how to read cellphone location records not expert
testimony); John v. Griffen, No. 13 Civ. 922 (RWS), 2014 WL 866277, at *14 (S.D.N.Y. Mar. 4,
2014) (same). Again, former Special Agent Yum already testified extensively concerning this
issue without being qualified as an expert.While there are, of course, more complicated aspects of Bitcoin concerning the actual
software code and cryptographic technologies on which the Bitcoin network is built, these
aspects of the system are irrelevant to the case. Just as a person does not need a technical
seminar on the computer networks used by banks to understand how wire payments can be sent
online or how to read records of the wires after they are sent, the jury in this case does not need
an expert to explain the innards of the Bitcoin network in order to understand how transfers of
Bitcoins are made or how to look such transfers up on the Blockchain.In any event, again, the Defense Letter fails to set forth what opinions Mr. Antonopolous
will give concerning these subjects or the bases for those opinions. It only lists the subjects
themselves. For this reason as well, his testimony on these subjects should be precluded.D. Bitcoin Speculation and Mining Is Not Relevant to the Case and Expert Testimony
on These Subjects Cannot Substitute for Factual Evidence That These Activities
Were the Source of the Bitcoins Found on the Defendant’s LaptopLastly, the Defense Letter states that the defense intends to have Mr. Antonopoulos
testify concerning the “concepts of Bitcoin speculating and Bitcoin mining.” These “concepts”
are not relevant to the case. While the defense has suggested at times that some portion of the
Bitcoins on the defendant’s laptop could have come from Bitcoin speculation or mining, such a
defense requires factual evidence that these activities were the source of the Bitcoins on the
defendant’s laptop. It would be an improper use of expert testimony for Mr. Antonopolous to
explain the “concepts” of Bitcoin speculation and mining simply in order to invite the jury to
speculate that such activities could have been where the defendant’s Bitcoins came from.The Second Circuit’s decision in United States v. Zafar, 291 F. App’x 425 (2d Cir. 2008),
is on point. In that case, the Second Circuit affirmed the district court’s exclusion of expert
testimony the defense sought to introduce concerning the use of certain stock-selection software
found on the defendant’s computer in a securities-fraud case. Id. at 427. Given “the absence of
evidence indicating that defendant had, in fact, used the software for stock trading at the time of
the charged crimes,” the court found it would have been inappropriate to allow expert testimony
on “how [the] stock-selection software worked.” Id. The Second Circuit explained that the true
purpose of the expert testimony appeared not to be “to show the jury how the software worked,”
but rather was “to insinuate what had happened with respect to the relevant stock trades, a
subject on which [the expert] was not a competent witness.” Id. The same is true here: the
defense cannot substitute expert testimony about how Bitcoin speculation or mining works for
Case 1:14-cr-00068-KBF Document 165 Filed 01/29/15 Page 6 of 77
factual evidence that the defendant actually engaged in these activities – and engaged in them to
such an extent that could explain the millions of dollars in Bitcoins recovered from his computer.Finally, in any event, the Defense Letter again fails to specify what opinions Mr.
Antonopolous intends to offer on Bitcoin speculation and mining, or the bases for these opinions.
Merely listing these topics as “concepts” on which the witness will opine in some manner does
not satisfy the prerequisites of Rule 16(b)(1)(C), and for this reason as well the proffered
testimony should be excluded.Conclusion
For the foregoing reasons, the Government respectfully requests that the proffered
testimony of Mr. Antonopolous be precluded in its entirety.Respectfully,
PREET BHARARA
United States AttorneyBy: ______________________________
SERRIN TURNER
TIMOTHY HOWARD
Assistant United States Attorneys
Southern District of New Yorkcc: Joshua Dratel, Esq.
Case 1:14-cr-00068-KBF Document 165 Filed 01/29/15 Page 7 of 7
And now Dratel's filing:
Case 1:14-cr-00068-KBF Document 171 Filed 01/31/15 Page 1 of 5
LAW OFFICES OF
JOSHUA L. DRATEL, P.C.
A PROFESSIONAL CORPORATION29 BROADWAY
Suite 1412
NEW YORK, NEW YORK 10006
–TELEPHONE (212) 732-0707
FACSIMILE (212) 571-3792
E-MAIL: JDratel@JoshuaDratel.com
JOSHUA L. DRATEL
—
LINDSAY A. LEWIS
WHITNEY G. SCHLIMBACHSTEVEN WRIGHT
Office ManagerJanuary 31 2015
BY ECF
The Honorable Katherine B. Forrest
United States District Judge
Southern District of New York
United States Courthouse
500 Pearl Street
New York, New York 10007
Re:United States v. Ross Ulbricht,
14 Cr. 68 (KBF)Dear Judge Forrest:
This letter is submitted in response to the government’s January 29, 2015, letter seeking
preclusion of the expert testimony of proposed defense witness Andreas M. Antonopoulos. For
the reasons set forth below, the government’s application should be denied in its entirety.
Pursuant to the standards of Daubert v. Merrell Dow Pharmaceuticals, Inc., 509 U.S. 579
(1993), as incorporated within Rule 702, Fed.R.Evid., admissibility of expert testimony requires
that the testimony proffered be sufficiently reliable and that the topic of the testimony be one that
is “beyond the ken of the average juror.” United States v. Tapia-Ortiz, 23 F.3d 738, 741 (2d Cir.
1994). The range of topics which are more than a “lay matter[] which [the trier of fact] is
capable of understanding and deciding without the expert’s help,” is broad, varied, and
sometimes counterintuitive. See e.g. Tapia-Ortiz, 23 F.3d 738, 741 (2d Cir. 1994) (permitting
expert testimony on the “weight, purity, dosages, and prices of cocaine”); see also United States
v. Noda, 137 F. App'x 856, 863-64 (6th Cir. 2005) (permitting expert to opine about age of child
in pornography).
Indeed, both the relevant case law and the government’s arguments only support Mr.
Ulbricht’s right to call Mr. Antonopoulos as an expert witness to respond to testimony by
government witnesses as to Bitcoin, including analysis by government witness former SpecialCase 1:14-cr-00068-KBF Document 171 Filed 01/31/15 Page 2 of 5
LAW OFFICES OF
JOSHUA L. DRATEL, P.C.
Hon. Katherine B. Forrest
United States District Judge
Southern District of New York
January 31, 2015
Page 2 of 5Agent Illwan Yum of the FBI cyber squad as to the Bitcoins transferred from the Silk Road
website to Mr. Ulbricht.
I.The Origins of Bitcoin and the Various Purposes and Uses of
Bitcoin Are Relevant to This Case and Necessary to Bring
the Concept of Bitcoin Within the Ken of the Average JurorThe government argues, at 3 of its letter, that Mr. Antonopoulos should not be permitted
to testify as to the origins and uses of Bitcoin because “[t]he ‘origins’ and ‘various purposes and
uses’ of Bitcoin are no more relevant here than the ‘origins’ or ‘various purposes and uses’ of
cash would be relevant in a traditional drug dealing or money laundering case.” In fact, the
opposite is true. Most lay people, and thus most of our jurors, have had bank accounts and are
comfortable and familiar with cash transactions. But, Bitcoin is a concept outside the ken of the
average juror and most, if not all, of our jurors have never conducted a single Bitcoin
transaction. The defense should therefore be permitted to call an expert witness to familiarize
the jury with Bitcoin, and to demystify the concept of Bitcoins. To prevent the defense from
doing so could cause the jury to convict Mr Ulbricht simply based on their fear of the unknown.
At the very least, expert testimony should be permitted to explain a complex and unfamiliar topic
that is directly relevant to the charges in this case.
II.The Exchange Value of Bitcoin Is a Proper Subject of Expert Testimony and Its
Fluctuation Over Time Is DirectlyThe government claims, at 4 of its letter, that “‘the value of Bitcoin over time since its
inception, and the cause of various increases and decreases in the value of Bitcoin at certain
points in time,’ as well as ‘the dollar value of Bitcoins generated through transactions on Silk
Road, at various points in time, including at the time or Mr. Ulbricht’s arrest’” are “not proper
subjects of expert testimony in this matter.”
In fact, the exchange value of bitcoin and causes of fluctuation in that value are proper
subjects of expert testimony in that they are directly relevant to this case. Through the testimony
of former Special Agent Ilhwan Yum, the government sought to show that a total of over
700,000 bitcoins were transferred from the Silk Road bitcoin wallets to a wallets contained on
Mr. Ulbricht's laptop. See GX 620. However, the Government seized only 144,000 bitcoins from
the wallet contained on Mr. Ulbricht's laptop. See Trial Transcript, at 1673.
The testimony of Mr. Antonopoulos will establish that market forces inherent in the
Bitcoin market during the relevant time period would have precluded a cash out from the market
totaling the difference between the amount the government claims was transferred to Mr.
Ulbricht's wallet and the amount actually recovered. Mr. Antonopoulos can testify about theCase 1:14-cr-00068-KBF Document 171 Filed 01/31/15 Page 3 of 5
LAW OFFICES OF
JOSHUA L. DRATEL, P.C.
Hon. Katherine B. Forrest
United States District Judge
Southern District of New York
January 31, 2015
Page 3 of 5liquidity of the bitcoin market and how a withdrawal from the market a fraction of the size of the
540,000 bitcoin discrepancy would have caused drastic fluctuations in the market price of
Bitcoin during the relevant time period. This testimony is materially relevant to the defense
because the government has asserted that over 700k in bitcoins were transferred to a wallet
located on Mr. Ulbricht’s laptop, which is suggestive to the jury that Mr. Ulbricht was able to
secrete an enormous amount of Bitcoin prior to being arrested. However, this number is
contested by the defense and will be attacked through the testimony of Mr. Antonopoulos.
Moreover, expert testimony as to the value of Bitcoin is a proper subject of expert
testimony. Indeed, in United States v. Romano, 859 F. Supp. 2d 445, 460 (E.D.N.Y. 2012), in
addition to permitting the government to submit a valuation chart summarizing coin values (as
the defense did here), the government presented expert testimony as to value of coins based on
published price guides and newsletters in a money laundering prosecution. Accordingly, the
same kind of testimony should be permitted in Mr. Ulbricht’s case.
III.Mr. Antonopoulos Should Be Permitted to Provide Expert Testimony As to the
Mechanics of Bitcoin Transactions, the Ability to Track Bitcoin Transactions,
and as to the Bitcoins Transferred from Silk Road to Mr. Ulbricht’s LaptopThe government claims, at 5–6 of its letter, that Mr. Ulbricht should be precluded from
calling Mr. Antonopoulos to testify as to the ability to track Bitcoin transactions, the
“mechanics” of Bitcoin transactions, and seemingly also as to whether the Bitcoins from Silk
Road can be tied to Mr. Ulbricht. However, the government has put on purported lay witness
testimony through former Special Agent Illwan Yum of the FBI’s cyber squad, that the
transactions on the Blockchain can be tracked from Silk Road to Mr. Ulbricht. Former SA Yum
worked alongside Matthew Edmond, a PhD in cryptology, for more than 100 hours, at a cost of
$55,000 to the government, to complete his analysis of the Blockchain and provide his opinion
as to the ability to track Bitcoins in this case. His testimony also required the use of complex
charts and graphs. Accordingly, the integrity of the bitcoin analysis conducted by former SA
Yum is clearly relevant in that it is a material fact at issue in this case. Mr. Ulbricht must be
permitted to call an expert witness during the defense case to challenge the Government's
assertion, admitted as evidence in GX 620, that over 700,000 bitcoins were transferred to a
bitcoin wallet contained on his laptop. Independent defense investigation has uncovered that this
number is implausible and the defense, through Mr. Antonopoulos, seeks to dispute this finding.
Indeed, it is well-settled that an expert witness can be called to “assess or critique
another expert’s substantive testimony.” See Nature’s Plus Nordic A/S v. Natural Organics Inc.,
92 F. Supp.2d 237, 239 (E.D.N.Y. 2013). See also Stroheim & Romann, Inc. v. Allianz Ins. Co.,
No. 01 CIV. 8236 (LTS), 2003 WL 21980389, at *4 (S.D.N.Y. Aug. 14, 2003) (". . . properly
supported expert testimony critiquing another expert's opinion is admissible"), see also In reCase 1:14-cr-00068-KBF Document 171 Filed 01/31/15 Page 4 of 5
LAW OFFICES OF
JOSHUA L. DRATEL, P.C.
Hon. Katherine B. Forrest
United States District Judge
Southern District of New York
January 31, 2015
Page 4 of 5Blech Sec. Litig., No. 94 CIV. 7696 (RWS), 2003 WL 1610775, at *20 (S.D.N.Y. Mar. 26, 2003)
(courts often permit expert testimony "for the sole purpose of critiquing and thereby helping to
explain the work of an expert witness retained by another party"). In fact, the failure of a
defense attorney in a criminal trial to put on such rebuttal expert testimony has been deemed to
be constitutionally deficient. See Gerston v. Senkowski, 299 F.Supp.2d 84, 103-105 (E.D.N.Y.
2004) (holding trial counsel’s failure to consult with or call an expert to rebut the government’s
expert witness on the same issue “is an independent and sufficient indication of deficiency”).
In this case, even though Mr. Yum testified as a lay witness, the nature of his testimony
was akin to that of an expert witness in that it was complex and dealt with Blockchain
transactions that are outside the ken or familiarity of the average juror. He also drew
conclusions, based on his assessment of those Blockchain transactions, that go to the ultimate
issues in this case. In such circumstances, it is clear, as stated above, that the defense is entitled
to call a rebuttal expert witness to address that testimony head on.
Moreover, the “mechanics” of Bitcoin transactions are a necessary element of any
Bitcoin tracking analysis, and the defense should be permitted to put on expert testimony
regarding such “mechanics” because they are not within the knowledge of the average juror.
The government admits as much when it states, at 5, that “[t]he ‘mechanics’ of Bitcoin
transactions to which the Defense Letter refers – ‘wallets,’ ‘accounts,’ ‘exchanges,’ and the
“‘[B]lockchain’ – are concepts familiar to any layperson who has ever used Bitcoins.” As the
Court is well-aware, the vast majority of laypeople, including all of the jurors on this case, have
never used Bitcoin. Thus, expert testimony is completely appropriate, and necessary, as to this
issue.
Thus, Mr. Antonopoulos should not be precluded from providing relevant and material
testimony as to the mechanics of Bitcoin transactions, the ability to track transactions and
participants in Bitcoin transactions, and most critically, as to the Bitcoins transferred between
Mr. Ulbricht's laptop and the Silk Road Market server wallets.
IV.Mr. Antonopoulos Should Be Permitted to Provide Expert
Testimony On the Subjects of Bitcoin Speculating and MiningThe government claims, at 6, that the “‘concepts of Bitcoin speculating and Bitcoin
mining are not relevant to the case” and therefore that such testimony should not be permitted.
In support of this position they cite United States v. Zafar, No. 06-CR-289JG, 2008 WL 123954
(E.D.N.Y. Jan. 11, 2008). The Zafar case is clearly distinguishable from the circumstances of
Mr. Ulbricht’s case.
In Zafar, the Court concluded that because there was no independent evidence that theCase 1:14-cr-00068-KBF Document 171 Filed 01/31/15 Page 5 of 5
LAW OFFICES OF
JOSHUA L. DRATEL, P.C.
Hon. Katherine B. Forrest
United States District Judge
Southern District of New York
January 31, 2015
Page 5 of 5defendant used stock selection software at the time of the crimes charged, expert testimony
regarding how the software worked, which could imply to the jury that the defendant chose
stocks on the basis of recommendations made by the software, was inappropriate. Zafar, No. 06CR-289JG, 2008 WL 123954, at *2 (E.D.N.Y. Jan. 11, 2008). Given that trial counsel agreed
with the Court that the expert would be unable to testify whether the stock-selection software
would have led users to choose the stocks at issue in the case, that portion of his testimony
related to how the software worked was excluded because it would have been "an impermissible
substitute for evidence that the trading activity at issue . . . was the consequence of the use of this
software.” Id. at *2 (E.D.N.Y. Jan. 11, 2008).
Here, the factual link between Bitcoin speculating – a possible source of the Bitcoins on
Mr, Ulbricht’s laptop and thus relevant to this case – and Mr. Ulbricht has been independently
established by the testimony of Richard Bates, who testified that Mr. Ulbricht was engaged in
Bitcoin speculating during the relevant time.
Accordingly, Mr. Antonopoulos should be permitted to explain the concepts of Bitcoin
mining and speculating to the jury.
Conclusion
Accordingly, for all these reasons, it is respectfully submitted that the government’s
application to preclude the expert testimony of proposed defense expert Andreas M.
Antonopoulos should be denied in its entirety.
Respectfully submitted,Joshua L. Dratel
JLD/lal
cc:Serrin Turner
Timothy T. Howard
Assistant United States Attorneys