DNA testing was first used to solve a crime in 1986 in England, soon making its way over to the U.S. Even by 1995, when the O.J. Simpson trial captivated the country, the public was not accustomed to the new form of crime-fighting science, with prosecutors struggling to explain the overwhelming evidence to the jury.

As the presence of cryptocurrency transactions pervades court cases, from money laundering to drug trafficking to child pornography, prosecutors are now turning to a new kind of forensics: Blockchain analytics. Thanks to the immutable and public nature of many blockchains, from Bitcoin to Tron, firms like Chainalysis and TRM Labs can trace activity to individuals and companies who may have been fooled into believing their actions were discreet.

Though as nascent as DNA testing once was, blockchain analytics does not seem to be suffering from the same inscrutability with juries—or judges. In the Sam Bankman-Fried trial, I watched prosecutors deftly sort through reams of evidence to demonstrate the illicit flow of funds through digital wallets and exchanges that amounted to fraud. (The sheer volume of additional evidence certainly helped secure a conviction.)

Yesterday was a big day for the growing science, which has become a multibillion-dollar industry. Tigran Gambaryan—a protagonist from Andy Greenberg’s Tracers in the Dark, which recounts the history of blockchain analytics and Chainalysis—was revealed to be detained by the Nigerian government in his capacity as Binance’s top investigator. And a jury in Washington convicted Roman Sterlingov of running a crypto mixer to launder tens of millions of dollars from darknet marketplaces.

The Bitcoin Fog case was not particularly notable for raising novel questions about the collision of privacy software and anti-money laundering laws—I expect the upcoming trial for the Tornado Cash founders to be more eventful because they actually sought to create an open-source software protocol, rather than a centralized service.

Instead, the Bitcoin Fog case was fascinating because it brought doubts over blockchain analytics into the foreground, as Sterlingov’s attorneys argued that the prosecutors’ mountain of evidence from Chainalysis linking illicit transactions to their client should be inadmissible.

In an August filing, the defense team called on the expert testimony of Jonelle Still, the director of investigations and intelligence at CipherTrace, a crypto intelligence company acquired by Mastercard in 2021. In the 41-page report, Still argued that Chainalysis’ attributions were “unverifiable” and that the prosecution’s investigation was “massively incomplete.” Her points, among many, were that there is no standards body to oversee blockchain analytics companies. Sterlingov’s lawyer would refer to Chainalysis’ software as “junk science” in subsequent testimony.

In response, the judge overseeing the case, Randolph Moss, held a series of Daubert hearings, which is a legal framework for assessing the reliability of expert witness testimony. Despite the defense trying to poke holes in blockchain analytics, its case began to fall apart. In February, Mastercard decided to pull Still’s testimony, arguing in a letter to the court that the data she relied on was “unverifiable and unauditable” originating from data collection practices before Mastercard even acquired the firm. The defense tried to argue this was exactly their point about the fallibility of blockchain analytics, although without success.

In a series of rulings from the bench, Moss declared that the evidence would be admissible. He provided a full explanation in an opinion from Feb. 29, saying that he was “unpersuaded” by the defense’s stance that blockchain analytics had not been peer-reviewed. “Substantial evidence supports the government’s submission that the software is highly reliable—and, if anything, conservative,” he wrote in the 31-page order.

Some of Moss’s logic seemed circular, including that law enforcement uses blockchain analysis extensively throughout the world, and that Chainalysis is an “industry standard tool” for customers from the Department of Justice to the Department of the Treasury. Still, he cited “widespread academic approval” of Chainalysis’ heuristics to satisfy one of the prongs for the Daubert standard, which requires that the evidence in question has “general acceptance” in the scientific community.

Despite the win for Chainalysis—who declined to comment for this article—the question does not seem to be settled. Moss argued that blockchain analytics was just one piece of evidence that the prosecution used and that it was reinforced by other methods. A case that relied solely on blockchain analytics could have a different result, especially if the opposing side can find an expert witness who doesn’t retract their testimony. And while Moss was persuaded by the “staggering” amount of data provided by blockchain evidence, another judge may prove more skeptical of the potential for errors, which Moss waved off as “likely immaterial.” The era of crypto tracing is just getting started.

Leo Schwartz
leo.schwartz@fortune.com
@leomschwartz

DECENTRALIZED NEWS

Grayscale filed to launch a low-fee spinoff of its Bitcoin ETF to appease investors as outflows continue. (Fortune)

The messaging platform Telegram is one of the few mainstream companies to embrace Web3 technology. (Financial Times)

The latest budget proposal from President Biden is raising concerns over new crypto rules, including for Bitcoin mining and wash trading. (CoinDesk)

Bitcoin reached another all-time peak of nearly $73,000 on Tuesday before falling back below $70,000 as the leading cryptocurrency continues its historic run. (Bloomberg)

Noted Bitcoin critic Jamie Dimon seems to be softening his stance, saying that he would defend people’s right to purchase the asset, though he still has concerns. (Fortune)

MEME O’ THE MOMENT

Don’t hold your breath for an ETH ETF:

This is the web version of Fortune Crypto, a daily newsletter on the coins, companies, and people shaping the world of crypto. Sign up for free.