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FBI Seized 144,000 Bitcoins ($28.5 Million) From Silk Road Bust
SonicSpike writes "An FBI official notes that the bureau has located and seized a collection of 144,000 bitcoins, the largest seizure of that cryptocurrency ever, worth close to $28.5 million at current exchange rates. It believes that the stash belonged to Ross Ulbricht, the 29-year-old who allegedly created and managed the Silk Road, the popular anonymous drug-selling site that was taken offline by the Department of Justice after Ulbricht was arrested earlier this month and charged with engaging in a drug trafficking and money laundering conspiracy as well as computer hacking and attempted murder-for-hire. The FBI official wouldn't say how the agency had determined that the Bitcoin 'wallet' — a collection of Bitcoins at a single address in the Bitcoin network — belonged to Ulbricht, but it was sure they were his. 'This is his wallet,' said the FBI official. 'We seized this from DPR,' the official added, referring to the pseudonym 'the Dread Pirate Roberts,' which prosecutors say Ulbricht allegedly used while running the Silk Road."
Sounds like unlimited arcade games for those lucky to get divvied in to the stash.
They may have "seized" them, but unlike with physical property, how can they be sure they are "unspent" and still worth-ful?
What if, when they try to convert them to cash, they are told they've already appeared in the blockchain and have been "spent" elsewhere? Would that not be quite embarrassing? That, from under the noses of the FBI, someone has recovered all that money via an anonymous currency exchange and ran off with the proceeds?
I sincerely hope that they cash in the Bitcoins before something appears on the blockchain from that wallet. Double-spending is blocked, but that doesn't mean the FBI would be the first person to try to spend them. Especially not now they've put it on the news. Anyone could have a copy of that wallet.
If the feds have seized the file he had with them in it, would someone be able to sped a copy of that file? Does bitcoin have a way to let you "back up" your money so that in the case of a government raid you secret copy elsewhere can be put into action and use the bitcoins for your defense fund, etc? Because it is well known the feds will seize all assets right away to prevent the accused from being able to afford good council and fight in court. If you don't have access to your money, you cant hire good lawyers.
Because if this is the case, then I look at bitcoin with more interest and a different light, was that by design or by accident?
Do not look at laser with remaining good eye.
Did they seize a file that is encrypted? That's not the equivalent of seizing bitcoins.
Well, he took the risk, and paid the price.
I wonder if this "Dread Pirate Roberts" is only one person, given how the name was used in The Princess Bride.
Will the government then be auctioning off the proceeds? Holding them for cashing in later like a bond? Who is advising them on managing the funds? There is both a certain irony and legitimacy in a state holding this new stateless currency.
the standard is not "proof", the standard is, they need to follow "due process", which I'm sure they are doing, though he is free to challenge it.
it's like the old "if people are innocent till proven guilty, how can they hold you in jail till your trial?" answer: you are not innocent till proven guilty, you are entitled to the presumption of innocence in court, but outside the court, much more reasonable standards prevail, like "was a crime committed?" and "is there evidence that points to somebody?" That's how due process works.
Or waterboarding?
Sounds like feds are going to have uphill battle in court trying to prove all these beyond reasonable dought. After all in court its not what they say, but what they can actually prove. Lets just hope some innocent people docent come forward and claim those bitcoing to be stolen by feds from them... Would be embarrashing, not to mention blow feds case out of water...
are allowed to traffick drugs and currency. Shame on you, dude.
Well, if they were able to seize the account (presumably meaning transfer the coins to a FBI-controlled account) then they at least know that it belonged to Person X, because they had to get the credentials from *someone*. So on that front what are you going to claim? "Honest officer, I was just holding this authorization to spend millions of dollars worth of bitcoins for a friend" ?
Beyond that I can't say much as I haven't looked into the details of the case.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
much more reasonable standards prevail
Innocent unless proven guilty is reasonable.
To move bitcoins you must spend money to transact them, about 2.5% is the transaction fee.
That's $625000 the FBI spent of that money, if not more.
Would that be illegal?
Don't keep all your eggs in one basket...
The court wants people to show up at their trial. This is done through either collateral i.e. bail or just holding people in jail if they're more likely to flee than appear. Bail is supposed to be returned too.
Given the track record of American law enforcement regarding seizures of assets "believed" to have been gained in unlawful transactions, I would say "Good Luck" fighting that. Further damaging his case, there is a link at the Forbes piece describing some (alleged) Mr. White-like tactics against an embezzler and a blackmailer.
Happiness in intelligent people is the rarest thing I know.
Ernest Hemingway
The FBI doesn't care if the man is found guilty or innocent later on. They just want to bully, terrorize and disrupt the life of anybody who tries to mess with the established system.
I guess this means that the FBI was able to recover the contents of RAM on Ulbricht's laptop after he was arrested. From what I understand, the FBI waited until they got confirmation from an informant that DPR was logged into Silk Road before they grabbed him and his laptop. They were careful to separate the laptop from Ulbricht before he reealized he was being busted and could shut-down/wipe-keys and frustrate efforts to recover evidence and his booty.
Do you think they carefully disassembled the laptop while it was on and chilled the memory with LN2 before removing the modules and placing them into a hardware duplication device or do you think they just slapped in a USB doohickey that ran some code to copy the memory?
If that kind of "evidence" holds a drop in water in court, good night legal system.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
The legal standards for asset forfeiture are not what you think they are.
http://en.wikipedia.org/wiki/Asset_forfeiture
If someone could overtake 51% of the Bitcoin mining, they could change the blockchain. What if 51% of the Miners agree that the FBI shouldn't have that money?
I bet you said the same thing to your mom when she caught you fapping on her keyboard. Didn't keep you out of trouble then, either.
The short term safety of other innocent people, or of the good electronics from getting sticky, means a balance has to be struct to protect society and the fine Corinthian leather of your mom's new computer chair birthday present.
All this technology is anonymized. There is no tracking possible, it's just guesswork.
This is not a normal bank account.
This would be fraudulent for the body that is supposedly responsible for the money. They would be tainting the US Dollar in a real way that wouldn't go unnoticed.
call me paranoid but i use multiple wallets and addresses. I have two private keys (paper wallets) that are not loaded into an online wallet or another client.
i also create multiple backups every 24 hours of my encrypted wallet.dat in blockchain.info files.
No, not even a little. Have you studied the technology? It's all pseudonymous, which is a completely different thing. Anybody who wishes to can completely monitor all activity on any account, the only anonymity resides in how well you hide the connection between yourself and your account number. Publish your account number publicly, like any legitimate business would do to accept payments, and there is no anonymity whatsoever, and every transaction past and present with that account is now known to be a transaction with that business. If you want to be anonymous then the onus is completely on you to make sure a link between your account number and your real identity is never discovered, the technology offers nothing in that regard.
Frankly, take away the gauze of anonymity and what you have is every financial analyst's wet dream of a currency - *every* transaction laid bare for all the world to see, in real time, and with a permanent record.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
would do a service to US and human society in general if they spent the money on education and eradicating poverty instead of fighting drug wars that are lost already. Fuck NSA FBI anf DEA! Funny how the land of the free degenerated into a police state.
Why is the FBI so incompetant to think they are worth $28 million? You can't compute the actual amount of USD you'd get by lastprice x number of bitcoins. You need to look at the order book. On #bitcoin, I've asked gribble. So if you sold 144,000 bitcoins, you'd get about $14 million USD and send the price of bitcoin to around $23/bitcoin.
http://bitcoin.org/en/you-need-to-know
Bitcoin is not anonymous
Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once. Always remember that it is your responsability to adopt good practices in order to protect your privacy.
Obligitory XKCD 538 link.
Just like last time, the market moves over the last few days strongly suggest that the FBI is already selling, or has already sold these bitcoins into the market.
Bitcoins are not for government, please sell them and collect your $28.5 million!
3 BTC community.
Publish your account number publicly, like any legitimate business would do to accept payments...
The recommendation is to use a different account for each order, not just for anonymity but so that you can distinguish the payments apart from the amount, which may not be unique, or even an exact match for the order in the event of a mistake. It's fairly rare even for "legitimate" businesses to have just one account number.
Even apart from unique receiving addresses, any business dealing in large quantities of bitcoins will probably want separate "working funds" and offline "cold storage" accounts, and general practice is to generate a new address every time you send funds to receive the "change". Some consider this more secure against cryptoanalysis since the full public key isn't revealed until the funds are spent, meaning that if you do use a new address every time then the only addresses with known public keys contain no funds.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
As the link in the summary shows: https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH
The bitcoins are still in the FBI seizure account. Not only that, entrepreneurs are sending small amounts to the account, with advertising attached, for online casinos, or cursing out the FBI. I find that amusing. If you scroll down past the tiny (0.0001 BTC) transactions, you will see the big transfers in for 324 BTC at a time. On a phone that spells out "FBI", so that is pretty clear who is doing the transfers.
...nor be deprived of life, liberty, or property, without due process of law...
Oh nevermind. We all know that no longer applies in the US.
Proof is not required to seize assets. Only a mere suspicion of criminal activity is required for a judge to sign off on a civil forfeiture. No criminal act need ever be proven, but even if there is, there is no requirement that the property seized actually be proved to have been involved in the crime.
This is probably the small change! The Big Money is safe from the Feds... Hahaha
Unless the FBI cares to prove it, nobody knows who controls the receiving address. It could easily be someone who paid for the coins.
For example, an exchange who then sold an offsetting amount from other controlled addresses.
The Bitcoins will be use to fund illegal narcotics and sex slaves from China to Obama!
'Nough said!
That sounds like a lot of considerations and headache that are only relevant to people seeking to hide their account transactions. If someone were to go down and buy a TV at BitMart I'm pretty sure the sequence would be
cashier: "you owe X bitcoins, please transfer to Account A"
you: "okay, here it is coming from Account B"
cashier (a half hour later after the transaction is confirmed): "thank you, come again."
How on earth would involving several additional accounts in the transaction simplify anything? All you're doing is increasing the number of transaction fees that need to be paid (as that is the expected funding model as "mining" ceases to be profitable on it's own)
--- Most topics have many sides worth arguing, allow me to take one opposite you.
If you don't give each order a unique receiving address, you have no idea which incoming funds are meant to pay for which orders. You give the buyer an address to send funds to; they aren't expected to know which address(es) the funds come from. They just enter the receiving address and amount (or scan a QR code) and tap "send". Some of the smaller clients stick to a single address and private key, but most of them, including the official client, use randomly-generated "change" addresses which aren't shown by default in the UI. Any number of transactions to different addresses ("change" or otherwise) may be combined to fund a single transfer. This doesn't even consider web-wallets (like Coinbase) where the funds come from a shared address controlled by the service provider.
In practice, every merchant accepting bitcoins today already uses unique receiving addresses. It's not nearly as much of a headache as you seem to think. For the buyer it's completely transparent, and for merchants the process is built into standard shopping-cart interfaces. It's all completely automated. (The real headache is processing refunds.)
P.S. No one would hold a customer at a brick-and-mortar store waiting for confirmations; there's less risk of fraud once they've seen the transaction relayed to the network, even with zero confirmations, than there would be from normal credit card chargebacks up to several months later. If they're really concerned, they'll just require ID so that they can track you down later. It's not like you could get very far in 30 minutes anyway.
"The state is that great fiction by which everyone tries to live at the expense of everyone else." - Bastiat
Where does all the money go that the government takes from seizures? I've always wondered.
Federal Bitcoin Institute.
Could those specific coins be turned into a "conflict diamond" so to speak, where individuals would choose not to accept any bitcoins if they were associated with a specific identity anywhere in the blockchain? A filter check prior to a transaction where an individual could set up a black list and refuse any of those targeted coins into their wallet?
Well, you could send them back, but I don't think there's currently any technical mechanism to be able to refuse to accept them, Giving your account bitcoins is a transaction between the sender and the network, you aren't actually involved at all except to provide the target account #.
.
--- Most topics have many sides worth arguing, allow me to take one opposite you.
Is it possible to refuse to accept any bitcoins that were seized? If so then management becomes like the spam blocking lists.
They ARE out to get you simply because They are in it for themselves and they don't care about you.