Gal “Oxymonster” Vallerius has been sentenced for drug trafficking following his August 2017 arrest in Austin, Texas. The Dream market vendor, who specialized in selling oxycontin, memorably flew in to participate in a beard contest, only to be greeted by U.S. federal agents, who had doxxed him by using blockchain forensics and writing analysis. Law enforcement succeeded in tying Oxymonster’s bitcoin core (BTC) tip jar to a Localbitcoins.com account registered in the hirsute Frenchman’s real name.
Vallerius’ case drew attention on account of the Texan trip that proved to be his downfall, but also due to the way in which law enforcement officials commandeered the case, rather than giving the French authorities the option to prosecute Vallerius in his homeland. News.Bitcoin.com recently reported on a similar case involving Alphabay ringleader Alexandre Cazes, noting:
In the case of Oxymonster, U.S. District Judge Robert N. Scola Jr. ordered the forfeiture of 100 BTC and 121 bitcoin cash (BCH). The latter cryptocurrency was less than a month old when Vallerius was arrested, just as he prepared to take center stage at the Austin beard competition. Despite a desperate plea for clemency from his wife, the judge handed down a stiff sentence that will ensure Vallerius won’t return home until 2038.
Users of darknet markets (DNMs) are finding it harder to pursue their largely benign hobby in peace. What used to be a solitary pursuit conducted away from the eyes of the law and the general public has become an activity subject to scrutiny, demonization, and potential prosecution. Numerous tools have been introduced or proposed that chip away at the anonymity traditionally enjoyed by DNM customers. A new research paper proposes a tagging system to monitor the flow of cryptocurrencies and the demand for goods as they flow through DNMs.
The open-source Blocktag algorithm enables blockchain addresses associated with DNM activity to be linked, along with user accounts on product listings and sites such as Dream and Wall Street. Blocktag will make it easier for researchers — or more likely, law enforcement — to connect the dots, associating DNM activity with related Bitcointalk forum posts and social media accounts. One of the ways in which Ross Ulbricht was caught was on account of Bitcointalk posts the Silk Road founder had made promoting the site.
The authors of the Blocktag paper concluded: “Blockchain analysis has become a hot topic among researchers and law enforcement agencies for applications that demand more effective tools … we used Blocktag to uncover privacy issues with using bitcoin in Tor hidden services, and flag bitcoin addresses that are likely to be part of a large Ponzi scheme.”