WHEN ROMAN STERLINGOV WAS FOUND GUILTY, LAST March, of money laundering and other charges related to the operation of a cryptocurrency service called Bitcoin Fog, his conviction marked a watershed moment for the Department of Justice in its fight against crypto criminality.

According to prosecutors, Sterlingov, 36, a dual citizen of Russia and Sweden, had been running Bitcoin Fog as a dark web “mixer” designed to obscure the origin and destination of on-chain crypto transactions. Over the course of a decade, the service had grown into a hive of criminal activity on a massive scale, facilitating the transfer of 1.2 million Bitcoin (or about $400 million at the time) for the sale of everything from narcotics to child pornography. In November, Sterlingov was sentenced to 12 and a half years in federal prison.

The case represented a legal validation for the digital forensics at the heart of the prosecution’s case—and a win for Chainalysis, the blockchain intelligence firm. that had produced the evidence on the government's behalf. Because of blockchain's baked-in transparency, in the form of an immutable public ledger, all transactions, nefarious or otherwise, are available—but in a raw, context-free form. Chainalysis specializes in deciphering that information to trace transactions, map relationships, and flag suspicious activity. As cofounder and CEO Jonathan Levin puts it, government agencies like the FBI and IRS hire Chainalysis to explain "exactly how and why people are actually using crypto." During the Sterlingov trial, the presiding U.S. district court judge issued a landmark Daubert ruling—a legal mechanism for determining the reliability of evidence—that validated the company’s blockchain analytics as admissible evidence, establishing a critical precedent.