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US To Auction 29,656 Bitcoins Seized From Silk Road
ClownP writes with news that the U.S. Marshals Service is selling off 29,656.51306529 Bitcoins that were seized when the Silk Road website was shut down. At current exchange rates, they're worth around $17-18 million. The coins will be auctioned off in nine blocks of 3,000 coins, plus one block with the remainder.
The USMS said that the first deadline for bidders will be 9am Eastern Time on June 16, 2014. All bidders must complete the government's Bidder Registration Form, which requires that you provide a copy of a government-issued ID as well as a $200,000 deposit sent by wire transfer from an American bank. The government added that the highest bidder will win, and he or she cannot finance its payment in installments — the winner must pay the full amount in cash. The USMS added one final stipulation. "The USMS will not sell to any person who is acting on behalf of or in concert with the Silk Road and/or Ross William Ulbricht, and bidders will be required to so certify," the USMS stated.
On the first bitcoin, I bid one bitcoin.
Do they accept payment in Bitcoins?
They're laundering the coins. The high bidders will end up being shell companies for TLAs.
"Lack of speed can be overcome. In the worst case by patience." --Znork
IRS said bitcoin is property
This isn't any different from them auctioning off any asset seized by law enforcement though.
They're basically treating bitcoins like anything else. It's the same as them auctioning off Beanie Babies or baseball cards. They want to convert things they take into US currency and auctions are how they get what the market will bear from it while doing so quickly.
Since I can't tell them apart, I treat all ACs as the same person.
The government has never been against that, so it doesn't need 'legitimising' in that manner.
It's an auction of property they seized. If the property value is expected to sell for more money than you have, you will not be the highest bidder. This is the way auctions (government and non government) have been for just about ever. This has nothing to do with the rich or poor. There is no incentive to split them into 29,000 individual items either. That would be a waste of time and money.
No, it doesn't, actually, or at least not any more than it somehow makes cars, homes, or other items seized and auctioned off suddenly become money.
What would legitimize it would be if they kept them and used them as money to buy things. They aren't. They're getting rid of them and explicitly NOT treating them like money.
It's literally no different than if they'd seized any other thing that some people think is worth buying.
Since I can't tell them apart, I treat all ACs as the same person.
Using an "exchange" would legitimize it as currency. Auctioning it treats it as property. Imagine the government was auctioning dollar bills seized in a drug raid, or tried trading seized sports cars for dollars on a currency exchange.
Let me blow your mind right now: all currency is fake. That's what makes it currency instead of bartered goods.
Because that's not how the government works in this regard?
They take shit, they auction it off to the highest bidder. The government is not in the business of managing an inventory, they want to convert whatever they take into cash as fast and efficiently as possible.
They think 3000 coin lots is the most efficient way for them to sell them, and couldn't give a shit as to who buys them as long as they pass the vetting process.
Since I can't tell them apart, I treat all ACs as the same person.
If not couldn't they end up 5 years later getting a judge ordering them to return the bitcoins at whatever the going rate is? Does the government routinely sell off shares in companies they seize too?
I don't want to get into the "is it money" argument but since this case is still pending isn't it a bit premature to be selling assets of any kind until guilt is proven in a court of law? I guess we've completely trampled on the constitution here especially the fifth amendment.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
You're thinking of English auctions. There's also Dutch auctions where the price is lowered from the seller's reserve price and then sealed auctions in which everyone submits a single bid.
"Lack of speed can be overcome. In the worst case by patience." --Znork
It's kind of adorable that you think they don't already know this kind of thing, given the amount of internal snooping they do already.
Also that you think they couldn't tank the value much more easily through other means, if they cared to.
Or that they actually care much about bitcoin beyond "how can we tax it?" type of questions.
They have a thing that they want to turn into cash. They want to do this as quickly as possible, and they don't want to spend time or money trying to take into account the vagaries of all the different kinds of things that they take in order to get maximum value.
Seriously, asking them to try and deal with the details of getting as much as possible from bitcoin would be like asking them to restore classic cars they seize and then try and sell them at various shows or through private channels to get the maximum return. Sure, they could squeeze a few extra bucks out of it, but who gives a shit?
Since I can't tell them apart, I treat all ACs as the same person.
Well, the owner of Silk Road would first have to actually claim the coins. Right now, no one is taking ownership of said coins so they are considered abandoned. The government is not a storage locker. You get a set amount of time to claim your property or its abandoned. It's the same as if your car was towed and you didn't come get it. Or if someone steals some of your stuff and is later caught by police. The police will hold the items until someone claims them or they are considered legally abandoned then auction them off.
As far as this move showing the feds find Ulbricht guilty without trial, he says he didn't run Silk Road so why would auctioning off SR assets matter to him? Ulbricht objecting to the sale would be as legitimate as me objecting to the sale. I don't have any rights to the coins, and he disavows any rights to them.
You're very confused.
Being able to pay for something with legal tender (US dollars) does not somehow make the things you buy with legal tender into legal tender itself. Nor does it somehow turn it into a currency. It sets no precedent.
Selling bitcoin - or ANYTHING ELSE - at an auction in exchange for US dollars does not set ANY kind of precedent establishing that bitcoin - or ANYTHING ELSE - is now legal tender. In fact, it establishes the opposite.
What WOULD set a precedent is if the government called up some suppliers and gave them bitcoin directly in exchange for things that aren't legal tender, because then they would be saying that bitcoin is the same as US dollars.
What they are doing here is saying "we have these bitcoins (and other things) and we would rather have US dollars, which are legal tender. We will give you these bitcoins for dollars, which we will then go and use like real money."
This isn't difficult.
Since I can't tell them apart, I treat all ACs as the same person.
And sorry, I didn't mean to be condescending there by saying adorable - I was more trying to shit on the snooping the US government does on random, inconsequential shit.
Since I can't tell them apart, I treat all ACs as the same person.
The coins aren't contained in the wallet as such, but rather they reside in the blockchain. The wallet holds the private keys that allow you to move coins away from their public address counterpart. Once that is done, it doesn't matter how many backups of that wallet there is, because the coins are already somewhere else - already locked to another private key in the blockchain. Also, his coins have already been "secured" (moved to another address), so there is nothing anyone can do.
Also also, DRP is in custody, without access to the internet, and thusly was never able to do anything.
If the government sold US dollars for bitcoin, I would say that sets a precedent that they are treating bitcoin like legal tender. A weak precedent, since the argument could be made that they "sell" US dollars for fighter jets, and yet fighter jets are not legal tender.
If the government accepted bitcoin for other things they offer, I would say that sets a precedent that they are treating bitcoins like legal tender. That would be a much stronger precedent.
If the government purchased things with bitcoin directly - as in used it to settle debts - then that would be the strongest possible precedent (short of them flat out saying "bitcoin is now legal tender") that they are treating bitcoin as legal tender.
The government is not treating bitcoins like they treat legal tender, not in any way, shape or form. I know you're probably just being silly with the "buy bitcoin with bitcoin" line, but there are - as I pointed out above - ways that you could establish a precedent that don't involve sophistry.
Since I can't tell them apart, I treat all ACs as the same person.
Let me blow your mind right now: all currency is fake. That's what makes it currency instead of bartered goods.
This. Times a million
Every currency (Yes, Virginia, even gold-standard currencies) are completely fake and arbitrary. The difference between fake and arbitrary fiat currency and fake and arbitrary gold-standard currency is exactly one layer of abstraction, because the "value" of gold is in itself pretty arbitrary. It is somewhat rare, but it's "value" is completely generated by the human mind. Which is actually for the best--can you imagine how high the price of gold would be if it was actually useful for something besides making jewelry and helping Fox News scam old people out of their savings with terrible gold investment opportunities?
Humans assigned "value" to gold because it was rare-enough to avoid hyper-inflation, but common enough that you didn't have to worry about deflation. And that worked just fine for a few tens of thousands of years... until there were too many humans for the world supply of gold to adequately represent new wealth and value as they're created.
If a more numerous race of aliens had evolved on this planet they might have assigned value to blades of grass, pebbles, or certain kinds of trees in a similar matter based on their own needs.
Which is why the entire "gold standard" argument (that "our money is fake and worthless") is so stupid: Yes, it is fake and worthless. So is all other money, everywhere--the value comes from the perception. So it doesn't matter if its "backed by gold" or "backed by Jell-O Pudding pops" the fact is, the value is based totally on the perception of value of something. With fiat currency, it's the perception of the value of what you can buy, with "gold-standard" currency it's the perception of the value of the gold. But neither has any "real" value without that perception.
Who did what now?
What is it called when someone's property is taken by force?
What do you call the one who takes what does not rightfully belong to them?
Now the stolen goods are up for sale. Are there laws against receiving stolen property?
The truth shall set you free!
One of the things things the helped in the Nevada ranch stand off is that no dealers would buy the cows because no rancher would ever sell them a cow again. If a few major exchanges say that anything tracing back to the Gov wallet can not be accepted, then what the Gov seizes will loose its value.
If the US government seized Euros or Yen or Pesos or whatever, they would just convert them to USD through foreign exchange. Why aren't they simply converting these Bitcoins through a Bitcoin exchange into USD and getting their money that way?