On January 31, 2017, attorney Jeffrey A. Wertkin was arrested at a Hilton Garden Inn in Cupertino, California. According to a complaint which was, filed on February 1 in the District Court for the Northern District of California in San Francisco, Wertkin, who went by the alias Dan, attempted to sell a sealed court document in exchange for Bitcoin.

According to FBI Special Agent William A. Scanlon, Wertkin, who was a former trial attorney in the Civil Division of the U.S. Department of Justice (“DOJ”) and then-current partner of Akin Gump Strauss Hauer & Feld LLP, first contacted an unidentified employee at a technology security company the week after Thanksgiving 2016, informing the employee about a whistleblower case the DOJ had filed under seal against the company.  In December 2016, after providing the employee with a redacted version of the first page of the sealed complaint, Wertkin offered to provide the employee with a full copy of the sealed complaint in exchange for $300,000.  On January 5, 2017, Wertkin suggested that he be paid in Bitcoins. Afterward, the two had multiple conversations and agreed to meet at the hotel to complete the exchange of $310,000 (Wertkin asked for an additional $10,000 to cover travel expenses) for the sealed document. Although he insisted the consulting fee be paid in Bitcoin due to its anonymity, he later agreed to a cash handoff. When Wertkin arrived at the hotel on January 31, he expected to complete the transaction but was instead met by Special Agent Scanlon and arrested. Wertkin was arraigned last week on a criminal contempt of court charge and released on a $750,000 bond.

Wertkin’s attempted use of Bitcoin to complete the illegal transaction highlights a commonly known feature of transacting with virtual currency—anonymity. However, the use of virtual currency to complete criminal transactions of any kind does little to boost its reputation or emphasize its many other characteristics—transparency, immutability, and accountability. If virtual currency is associated with criminal activity, then governments and skeptics will be discouraged to explore its many benefits. The virtual currency and blockchain community must collectively maintain the integrity of virtual currency and blockchain technology by developing productive and meaningful use cases within the ecosystem.