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Ulbricht Admits Seized Bitcoins Are His and Wants Them Back
An anonymous reader writes with the latest news about the aftermath of the Silk Road shutdown "From the article: 'Ulbricht ... said in a notarised December 11 statement that he believes the virtual currency should be returned to him because Bitcoins are "not subject to seizure" by federal law. Ulbricht, 29, now admits the Bitcoin fortune is his — even though he's previously denied any wrongdoing regarding Silk Road and claimed through his lawyer that the feds arrested the wrong guy.' So not only has he now confirmed his link to the site, and confirmed the money is his, but also means that a few precedents will be set. Is it seizable? Is it just 'copying data?'"
Relatedly, three alleged moderators of Silk Road were indicted on Friday.
I'm pretty sure I would have kept my mouth shut. The worst thing you can do is make it easier for the feds. But who knows, I've never been arrested on those charges and had a shitton of bitcoins seized.
The foolish arrogance of geeks is sometimes astounding.
What changed under Obama? Nothing Good
Yeah, let's tone down the hysteria a notch now, shall we?
Mr Ulbricht admitted to committing a crime, by facilitating the buying and selling of drugs on the Internet. Wrong move, but let us set this aside for a moment.
Bitcoins can be considered (and, indeed, are presented everywhere) as a currency. Hence, they can be considered as an ill-gotten gain.
While I am not a lawyer, I am pretty much certain that every country under the sun has got a law in its books that says, essentially: "Thou shall not profit from illegal activities" or some such.
This is prefectly constitutional, it respects the 4th amendment of the Constitution of the USA, and I am pretty sure it has been challenged many times in front of the Supreme Court, and upheld every time.
Since Bitcoin is a currency, and that said currency has been obtained from an illegal activity, it represents a profit from an illegal activity, and, therefore, can be and should be seized by the Federal Bureau of Investigations, a branch of the Department of Justice of the Government of the United States of America. The same thing would happen if, say, he had been paid in Euros or Yens (or any other currency, really) instead of Bitcoins.
If Mr Ulbricht is cleared of all charges - good luck with that since he pretty much admitted committing or facilitating an illegal activity - then, of course, the Bitcoins he has stashed should be returned to him by the FBI, probably with a little note attached saying: "Sorry! Here is your crypto currency" (again, good luck with that).
Should drug selling and buying be considered legal? Why not, you may have some arguments for the legalisation of drugs (See: Marijuana, legal use of), but, in the mean-time, it remains an illegal activity.
Hence, I believe Mr Ulbricht (a) will never see ''his'' Bitcoins again, (b) is about to learn a thing or two about the US legal process and (c) spend quite a number of years in a Federal Correctional Facility (or Prison). Whis is as it should be, since the guy comes off as a complete amateur.
And, while I agree that the ATF has badly bungled the whole Waco fiasco, I have zero compassion for religious nuts.
The right to offend is far more important than the right not to be offended. (Rowan Atkinson)
Unless you were at Waco, you don't know what happened at Waco.
You mean what happens in Waco stays in Waco?
There is no crown. In the US, the Feds seize first, worry about proof later. Civil forfeiture is big business, "policing for profit":
http://www.ij.org/policing-for-profit-the-abuse-of-civil-asset-forfeiture-4
What changed under Obama? Nothing Good
My opinion that the less than Dread Pirate Roberts is a massive idiot has now been reinforced in a way I never would have imagined. The demand is tantamount to the drug lord demanding the feds return the hundred million dollars that could only have come from selling 100 kilos of cocaine many times over.
He hasn't got any possible legal pretense to justifying having the money and all it's going to do is prove his guilt. This idiot ought to look at the cartels and organized crime worldwide where they pointedly have this process called laundering money so that they can have at least have a pretense of legitimacy for their claims. No jury in the world is going to buy that this guy made tens of millions of dollars day trading bitcoin without a paper trail.
I haven't seen a single thing about the silk road operation that did anything other than prove the man was an idiot from inception through the present day. Why the hell are people defending this guy, just because he ran a trading site for drugs? The people who were deluded into thinking they were safe on silk road are being arrested, the intelligence gained was an incredible coup and likely the only reason it lasted as long as it did until the guy started trying to trade bitcoins for murder.
If you want to defend legalizing drugs, than make your argument for that, but don't defend one of the biggest idiots the Internet has ever seen.
Unless you were at Waco, you don't know what happened at Waco.
Bullshit. Even the US government doesn't deny that children were burned to death. They do deny their culpability, but it isn't terribly hard to see that as misdirection.
Even if the footage (which I watched on live TV at the time) of the tank pushing in the walls and the fire starting not to long afterwards was misleading, the government were the ones with all the resources and time necessary to handle the situation in a safer way. They decided that their time was worth more than the risk to the children and that's the best possible light you can put on the government's actions, all other interpretations are much less favorable.
Most people who have responded seem to not understand the legal argument here. Yes, this is risky to his case and basically he can't explain how he got the coins without hurting his own case. However, that's not the point. My guess is that he and his attorneys know that he is going to lose in court and go to jail. They are trying a novel argument that likely won't work that the government doesn't have the right to seize the coins no matter how acquired specifically because of their electronic nature. This is basically a low percentage "hail Mary" type play (to use an American football reference - look it up in Wikipedia if you don't understand it) to try to at least get him some income (and get his lawyers paid now) for when he gets out of jail. It's trying to turn the best case scenario into "Yeah, you're going to jail, but you'll still be rich when you get out". The unpleasant alternative is to say nothing, let the government keep the coins, and proceed with his weak defense that probably won't work anyway, in which case he goes to jail for a long time penniless. He's going to jail - the only question is whether this highly unlikely argument to keep the coins actually works and he at least gets to leave prison as a rich man. Anything can happen in a US courtroom, but I don't think this is going to be successful.
Ahhhh! However the hard drive is also evidence against him in a criminal trial. This means the contents should be available to him as a matter of discovery. If he has to answer for the contents of the drive, he needs to be able to have the same data they do to defend himself.
I lived with someone who did computer forensics for the defense at a trial. He had to install a lock on the office door for that, and he had many binders of reports. He also was provided images of all computers that were seized. Full images. (complete with malware!)
Its an interesting argument. The wallets are just data; data being used as evidence against him. They are not the bitcoins themselves. I would be surprised if there is any real direct precedent for this. The very files he needs and should be entitled to for the purpose of his defence, also necessarily give him control over the bitcoins....there is no separation between the two.
It will be interesting to see how these arguments go. It may in fact be that bitcoins perform an end run around existing federal law. It certainly will make me laugh if this works.
"I opened my eyes, and everything went dark again"
Except that ill-gotten gains are always subject to seizure. Look up US Federal drug forfeiture laws some time. The feds can take anything that's the proceed of or used to facilitate drug crimes. It doesn't matter what form the assets are in. If the feds can prove they were bought with drug money, they can seize them. If they were used as an active part of the trade, the feds can seize them. Since the bitcoins appear to be both, it's going to be pretty easy for the feds to get them.
There's no point in questioning authority if you aren't going to listen to the answers.