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DOJ Hasn't Actually Found Silk Road Founder's Bitcoin Yet
Techdirt has an interesting followup on the arrest and indictment of Silk Road founder Ross Ulbricht, in connection to which the FBI seized 26,000 or so Bitcoins. From the Techdirt piece: "However, in the criminal complaint against Ulbricht, it suggested that his commissions were in the range of $80 million -- or about 600,000 Bitcoins. You might notice the disconnect between the 26,000 Bitcoins seized and the supposed 600,000 Ulbright made. It now comes out that those 26,000 Bitcoins aren't even Ulbricht's. Instead, they're actually from Silk Road's users. In other words, these were Bitcoins stored with user accounts on Silk Road. Ulbricht's actual wallet is separate from that, and was apparently encrypted, so it would appear that the FBI does not have them, nor does it have any way of getting at them just yet. And given that some courts have argued you can't be forced to give up your encryption, as it's a 5th Amendment violation, those Bitcoins could remain hidden -- though, I could see the court ordering him to pay the dollar equivalent in restitution (though still not sure that would force him to decrypt the Bitcoins)." The article also notes that the FBI's own Bitcoin wallet has been identified, leading to some snarky micropayment messages headed their direction.
But that is part of the game. You gut someones means and prosecute them so they can't defend themselves. That is the game the government plays.
This brings up an interesting thought. Since the total number of Bitcoins is fixed, and if these coins seem to now be irrecoverable, what happens to the currency when it disappears into encrypted black holes like this?
// file: mice.h
#include "frickin_lasers.h"
in the criminal complaint against Ulbricht, it suggested that his commissions were in the range of $80 million -- or about 600,000 Bitcoins.
Yes, and given how badly he managed his assets, I doubt even a fraction of this will be recovered. He was not a very good businessman, his servers weren't very well secured... in fact the only thing in the "had lots of" category with this guy was ego. I mean really... "Dread Pirate Roberts"? And have you seen some of the things he wrote on this website of his? "I'll take as much of your money as I want because this is my ship. If you don't like it, fuck off." -- It's actually included in the criminal indictment against him, along with a laundry list of, shall we say, personality shortcomings of his leading to other elements of the criminal underground coming by to explain all meanings of the word "respect" to him, and then him blowing tons and tons of money either paying these people off, or trying (pathetically) to put hits out on them.
If there's one charge I could add to the indictment, it would be criminal stupidity.
It now comes out that those 26,000 Bitcoins aren't even Ulbricht's. Instead, they're actually from Silk Road's users. In other words, these were Bitcoins stored with user accounts on Silk Road.
Technically, they were for purchases pending. Silk road worked by letting you transfer coins into a silk road proxy account. It ran every submission through its "tumbler" to randomize which coins were actually used for which transactions. So what was seized was basically the day's take out of the register, as it were.
Ulbricht's actual wallet is separate from that, and was apparently encrypted, so it would appear that...
That he'll be charged as a terrorist and sequested in a room somewhere to be beaten with a metal pipe or waterboarded until he gives up the password. Has anyone heard from him lately?
And given that some courts have argued you can't be forced to give up your encryption, as it's a 5th Amendment violation...
We'll just create a new court especially to prosecute terrorists like him extrajudicially. Oh wait... we already did.
The article also notes that the FBI's own Bitcoin wallet has been identified, leading to some snarky micropayment messages headed their direction.
Taunting the police has historically worked out quite well for criminals. Dude, you aren't anonymous. You basically just signed your own search warrant.
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But that is part of the game. You gut someones means and prosecute them so they can't defend themselves. That is the game the government plays.
Only with people dumb enough to not prepare ahead of time for this. This guy was 'new money'. He didn't know how to manage his assets, how to invest, how to setup multiple accounts, and didn't have the good sense to bond a lawyer ahead of time and give them limited power of attorney so they could coordinate his estate while he was in jail. See, this is what 'old money' does, and it means they get to hire entire bus loads of attorneys to show up at court, and the government can't do dick about it because they were bought and paid for ahead of time and are being funded out of accounts they can't seize or have access to because the money's been cleaned and separated from his personal accounts through shell corporations, etc.
Don't talk about how to play the game... this guy wasn't a player, he was a loser. He was setup from day one, by his own stupidity, to lose. If I was running a website like that, the very first thing I'd have done after getting ahead financially is separate out as much money as I could for future legal troubles, and hire accountants and lawyers so when the day came to save my sorry ass, all I'd have to do is just sit in jail and wait while Plan Bravo executed all on its own to spring me.
But, since the man was basically a walking cliche instead of a proper criminal or businessman or even passably decent nerd, I feel compelled to quote off his namesake:
"Do you hear that, Fezzik? That is the sound of ultimate suffering. My heart made that sound when the six-fingered man killed my father. The Man in Black makes it now."
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