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US Government To Convert Silk Road Bitcoins To USD
angry tapir writes "The founder of the Silk Road underground website has forfeited the site and thousands of bitcoins, worth around $28 million at current rates, to the U.S. government. The approximately 29,655 bitcoins were seized from the Silk Road website when the Federal Bureau of Investigation (FBI) moved to close it in late September. 'The United States Marshals Service shall dispose of the Silk Road Hidden Website and the Silk Road Server Bitcoins according to law,' wrote Judge J. Paul Oetken, of the U.S. District Court for the Southern District of New York, in a court order that was issued this week. The ruling represents the largest-ever forfeiture of bitcoins. 'It is the intention of the government to ultimately convert the bitcoins to U.S. currency,' said Jim Margolin, a spokesman for the U.S. Attorney's office for the Southern District of New York."
Are there even enough BTC exchanges out there to actually convert that much BTC into USD?
If there aren't, and the US government is persistent enough, wouldn't they be able to effectively "lock out" everyone else from getting money out of the system by basically draining the exchanges dry?
Like it or not, BTC is worthless unless you can exchange it for IRL bucks. It's a cute experiment and all, but at the end of the day your average shop keeper has to turn his BTC into something he can pay his rent with. If the US government is somehow able to effectively launch a "DoS" attack against all the exchanges, then what is going to happen to BTC?
According to the law, the guy hasn't actually been convicted of anything yet, so WTF?
They aren't.
They are seized goods.
Same way they'd sell your car if that's what you had illicitly gained and they'd seized it - and they'd sell it for US$.
This is just conversion of a seized good to monetary value (and probably at way below current rates, if "police auctions" etc. are any measure of how they'll go about it).
Wasn't those bitcoins marked as forfeited on the various block watching sites?
If nobody want those bitcoins, they might be very hard to sell while other bitcoins can be sold without a problem.
I understand that some people at slashdot love to argue about bitcoin, one way or another.But do we really have to have an article whenever someone decides to buy or sell some of them?
A forfeiture worth ~$28M is surely news?
Also, it is interesting to know that as long as you are charged with something (not convicted or anything, mind you), so much money can go poooof...
You might be surprised, but here in germany US dollars are no legel tender either.
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
OK. since these bitcoins can be uniquely identified, how about the BTC community REFUSING them? That'll piss in the Fed's cornflakes.
Political debates have me rolling my eyes so much I think I got optical whiplash. I should sue. - Foamy The Squirrel
Gold is at least pretty and useful in a number of industrial and electrical applications.
Of course, I don't trade in gold coins anyways - assessment costs* will eat up any 'profits' from gold price increases 9 times out of 10.
*To determine the purity of the gold hasn't changed since you got the coins.
I don't read AC A human right
'It is the intention of the government to ultimately convert the bitcoins to U.S. currency,'
Good luck with that. I've been waiting 3 months now for my U.S. currency.
The government sells their surplus office chairs.
Office chairs aren't tender.
The government sells radio channels.
Radio channels aren't tender.
The government sells bitcoins.
Bitcoins aren't tender.
Legal tender is whatever type of payment you are REQUIRED to accept.
If you eat at a restaurant and when the bill comes you try to pay with a check, they can say "we don't accept checks." If you refused to pay with anything other than a check, they could call the police or sue you for the $12. They can also say "we don't accept credit cards.". They HAVE to accept cash. If they refused your cash and then tried to sue you, the judge would laugh and tell them to read the $20 bill. It says right on the bill "this note is legal tender for all debts, both public and private.". That means you can't refuse cash and then claim that someone didn't pay. THAT is legal tender.
Office chairs are not a tender because you can't force the restaurant to accept office chairs as payment. The fact that the government sells office chairs has nothing to do with it. They are still chairs, not money. The government can sell toys. Bitcoins are still toys, not money.
I think you need to retake Economics 101. Reality doesn't bend to your will. Just because you think Bitcoins shouldn't be in demand, doesn't make it so. What an exceedingly dumb thing to say.
And gold is just a nice-looking metal that has some uses in electronics. Besides food and oxygen, every object we use to determine wealth is kind of bs, so bitcoin is no more or less credible than what we've got now.
A forfeiture worth ~$28M is surely news?
I think the only reason it is news on this site is that it involves bitcoin. $28M isn't too particularly noteworthy when compared to other cash seizures, particularly drug arrests. In relation to general asset seizures, Bernie Madoff's seized assets were reportedly worth around $826M.
Ironically, it's far harder than bitcoin to trace, since it doesn't have a transaction log.
*sigh* I'll keep repeating this until it gets through people's thick skulls.
Sol long as you can calculate a dollar equivalent and pay your taxes in dollars the Feds don't care if you keep your books in BTC, Pesos, or jars of hamster poop. They even have IRS publications that explain how the system works to keep you from running afoul of the laws. It's so easy to do that even I, back when I ran a one-man operation, could (and did) do so. (Living near the Canadian border, I handled a lot of Canadian cash.)
The DEA actually had put out a memo a few years back that said they will not bother to raid properties where persons are using drugs if the property is worth less than $50,000. It was the memo about how landlords forfeit their right of ownership if they knowingly allow the usage of drugs on their property--which was attached particularly to people having some kind of pot-smoking parties in states that had legalized or had planned to legalize marijuana. They directly stated that action would not be taken--no raids, no arrests, no seizure--on properties valued at under $50,000.
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It's not because they don't control the currency. They seize USD all the time.
Is 1563649 a prime number?
You can try to push the "bitcoin doesn't exist" angle as much as you like. You're just arguing over semantics, and in an nonsensical way.
How is the sale of a car not a conversion into dollars? Why is there nobody who "already owned US dollars" who wouldn't want to buy the car/bitcoins for them?
Where do you get the idea that they are "printing" anything? If they had 10m Euros and they "converted them" to US$, what makes you think that's not a "sale"? What makes you think that involves printing more US dollars just for that transaction rather than, as is really the case, giving someone existing commodities for their existing US dollars?
You can make up whatever bullshit you want, because it's a Bitcoin story so anything goes? No. They are SELLING / CONVERTING a virtual commodity (like they do every day, and like you and I can every day and do every time we go on holiday abroad) and receiving US dollars from a vendor to do so. We call it currency conversion. It doesn't involve some guy at the Travel Exchange knocking out freshly-printed dollar bills, in any way, shape or form.
They didn't say that in so many words; they simply said that they wouldn't expend the resources to send agents if there wasn't property of at least $50,000 value to be seized.
1. This definitely isn't what you said before.
2. You still haven't provided any evidence that this memo exists, and isn't just urban legend.