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U.S. Feds Seized Nearly $1B in Bitcoin from Wallet Linked to Silk Road

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Re: U.S. Feds Seized Nearly $1B in Bitcoin from Wallet Linked to Silk Road

#71

Post by gamblor956 »

shiado wrote: post #67

What's fascinating is that it is the view of the state that the creation of a hard fork, which is the creation of new and previously non-existing coins according to how Bitcoin is taxed by the IRS, is considered to be the proceeds of crime. It is philosophically notable that a piece of property can come into existence and immediately be considered the proceeds of crime in this way.

The Bitcoin Cash coins were received solely as a result of owning coins that were the proceeds of a crime, therefore, the BC coins were themselves also deemed the proceeds of a crime.

Re: U.S. Feds Seized Nearly $1B in Bitcoin from Wallet Linked to Silk Road

#72

Post by Denvercoder9 »

wolco2 wrote: post #48
smaps wrote: post #24

Seems like HN might be blocked as referrer here... clicked on the link and got a 404. If I go to the link directly it loads.

Change your gateway from 1.1.1.1 to 8.8.8.8 and see if it makes a difference

First, 1.1.1.1 and 8.8.8.8 are DNS servers, not gateways. Second, changing DNS server doesn't really work against a 404.

Re: U.S. Feds Seized Nearly $1B in Bitcoin from Wallet Linked to Silk Road

#73

Post by ineedasername »

shiado wrote: post #67

What's fascinating is that it is the view of the state that the creation of a hard fork, which is the creation of new and previously non-existing coins according to how Bitcoin is taxed by the IRS, is considered to be the proceeds of crime. It is philosophically notable that a piece of property can come into existence and immediately be considered the proceeds of crime in this way.

Don't think of it from the point of view of "creation" of property. Think of it as an investment: The investment grew, that's all. Imagine an asset seizure that overlooked 1,000 shares of Apple stock. It was then found some years later, but the stock had split so there was now 2,000 shares. That isn't new property, is rose out of the original forfeited asset. This is no different.

Re: U.S. Feds Seized Nearly $1B in Bitcoin from Wallet Linked to Silk Road

#74

Post by jagged-chisel »

prvc wrote: post #68
macksd wrote: post #49

Earlier quoted context omitted.

This is the XKCD you're looking for: https://xkcd.com/538/

What does that have to do with a rubber hose?

Rubber hose, hammer ... same usage, slightly different “impact”

Re: U.S. Feds Seized Nearly $1B in Bitcoin from Wallet Linked to Silk Road

#75

Post by wtallis »

prvc wrote: post #68
macksd wrote: post #49

Earlier quoted context omitted.

This is the XKCD you're looking for: https://xkcd.com/538/

What does that have to do with a rubber hose?

The proverbial rubber hose serves the same purpose as the $5 wrench mentioned in the comic.

Re: U.S. Feds Seized Nearly $1B in Bitcoin from Wallet Linked to Silk Road

#76

Post by cmauniada »

colinmhayes wrote: post #50
cmauniada wrote: post #36

Earlier quoted context omitted.

Yes, but they didn't hack into the wallet. They basically found the person who was in-charge of the wallet and forced their hand (read: civil forfeiture) in order to gain access to the bitcoin.

I'm not sure civil forfeiture is the right term for what happened here. I don't think the government can compel individual x to give them the wallet's key. Unless they found the key laying around I'd say they likely they built a case against them and used that to get them to trade the billion dollars in exchange for dropping the case.

Thanks for the correction.

Re: U.S. Feds Seized Nearly $1B in Bitcoin from Wallet Linked to Silk Road

#77

Post by gojomo »

gregrata wrote: post #30
gojomo wrote: post #20

Earlier quoted context omitted.

Oddly enough, in the case of other "Anonymity-Enhanced Cryptocurrencies" ("AECs"), the DoJ has taken the position that they'd rather not recirculate them. See https://twitter.com/jerrybrito/status/1314254265251225600 >, where it's reported: > In most cases, the Department [of Justice] does not liquidate seized or forfeited AECs, as doing so allows them to re-enter the stream of commerce for potential future criminal…

I'm sorry - but - HUH? > re-enter the stream of commerce for potential future criminal use. Because of course if CASH re-enters the steam of commerce is somehow different?

I agree it's batty reasoning!

For example, what if we assume for a moment that this makes sense from a crime-fighting perspective. That is, the marginal value of future-crime prevented by withholding the cryptocurrency is greater than the value of the crime-fighting that could be financed if it were auctioned off.

If true, it would also follow that the DoJ should be buying cryptocurrency on the open market to keep it idle, at least until its price rises such that an equilibrium is reached, where "withhold-from-stream-of-commerce-value" and "spend-on-crime-fighting-value" become roughly equal.

Re: U.S. Feds Seized Nearly $1B in Bitcoin from Wallet Linked to Silk Road

#79

Post by jonplackett »

macksd wrote: post #49
ballenf wrote: post #37

Earlier quoted context omitted.

The regular reply to that strength is usually the rubber hose threat. Which is pretty much what happened here it seems with the person who had control of the private key in custody of the government.

This is the XKCD you're looking for: https://xkcd.com/538/

There really is an XKCD for every occasion.

Re: U.S. Feds Seized Nearly $1B in Bitcoin from Wallet Linked to Silk Road

#80

Post by ineedasername »

modeless wrote: post #42
londons_explore wrote: post #39

This gives the US government a lot of power over bitcoin... That both gives the government an incentive to let bitcoin thrive (to protect it's holdings), but also an opportunity to substantially manipulate bitcoins market price, possibly down to nearly zero. Or the keys to these bitcoin will sit idly in a filing cabinet forever...

They will auction it off as soon as possible like they did several times before. I'm not sure why the bitcoin price has gone up in response to this news, because it means more supply is coming to the market soonish. These coins might have been presumed lost before. Certainly they would not have been able to be sold on any legitimate exchange. Now they will be washed clean and enter the markets. On the other hand, a b…

MtGox might be able to pay people the dollar value of their investment at the time, but still not the actual # of bitcoins.
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