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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?
No, but his money and property has.
Civil Forfeiture law is insane.
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...
I don't think you understand. No one gives a shit about what US law you think applies here or what rights the US gov't does or doesn't have here. To the Bitcoin community they were stolen.
You're running into one of the properties of BitCoin here - it's not anonymous, it's pseudonymous. You can't hide the transaction history of a given coin, because that's how BitCoin works - it's a single vast verifiable public transaction log. If someone doesn't want to accept coins that passed through a particular wallet, then it's easy to verify this. And if there are enough people who won't touch Silk Road coins, then their value will be dubious to the people who ordinarily would.
It's impossible to "launder" BitCoin for this reason - you can always trace the entire transaction history for a given coin or subdivisions thereof.
That said, I think it's unlikely that people will turn them down.
Has Ulbricht actually been found - in a court of law - to be either, or confessed to being so? Not so far as I've heard.
This is an asset forfeiture case. He isn't being tried or punished. His assets are being tried in a court of law, and the constitution doesn't give any human rights to assets, so they aren't entitled to such novelties as "trial by jury" or "innocent until proven guilty" or the "right to confront witnesses." Don't worry though, every time a stack of money was asked to speak up if they had any concerns with the proceedings it went along in silent acquiescence.
In drug cases the first thing the US Government typically does is seize any assets they can find and use forfeiture to confiscate them with only an administrative procedure. The owner of the assets has no standing in the court to speak or prevent this - he is technically not under trial.
Of course, when the accused is finally under trial he'll have a much harder time of it now that he has no assets with which to pay a lawyer. Oh, and if he is found to be innocent it doesn't change the fact that his assets were already found to be guilty. Apparently you can try to sue to get your money back, but you need to prove the innocence of the assets in question.
And yes, if this sounds absolutely insane, that merely demonstrates that you aren't.
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.