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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

#101

Post by gamblor956 »

gruez wrote: post #55
TheHypnotist wrote: post #29

I'm not the most saavy BTC person, but isn't part of the allure of bitcoin the ability to evade this type of seizure?

The point of bitcoin is that you can drive across the country "carrying" $1B worth of assets, and if you get pulled over by the cops it won't be found. Try doing that with gold bars or stacks of cash.

Plenty of rich people drive or fly across the country all the time "carrying" $1b worth of assets. They're called bank accounts, and you can access them with these things called "check books" and "debit cards" that you can use in infinitely more places than you can transact Bitcoin or other crypto.

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

#102

Post by tantalor »

lastofthemojito wrote: post #96
Forbo wrote: post #52

Earlier quoted context omitted.

They typically get auctioned off, much like other property seized in asset forfeiture proceedings.

That's an interesting angle in the "is Bitcoin really a currency or is it just property?" argument. What would happen if the US government seized a billion dollars worth of foreign cash? Would that get auctioned off too? Seems like a weird auction, selling money.

https://en.wikipedia.org/wiki/Foreign_exchange_market

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

#103

Post by nullc »

canada_dry wrote: post #98

TL;DR: The wallet held the proceeds of "Silk Road" drug trafficking, a hacker stole the wallet. Feds tracked down the hacker and just made a deal with him to give them keys to the $1B wallet. Hacker prob got a nice pen and stayed out of Federal prison.

> and stayed out of Federal prison.

I'm a little confused there, because both the hacking and money laundering should have been beyond the statute of limitations.

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

#104

Post by compiler-guy »

bufferoverflow wrote: post #45
TheHypnotist wrote: post #29

I'm not the most saavy BTC person, but isn't part of the allure of bitcoin the ability to evade this type of seizure?

With a bank they don't need your permission, they can just take your money straight from the bank. With cryptocurrencies they have to threaten you. And if you're ok with spending some time in jail (for court contempt), there's nothing they can do.

Where by "some time in jail", you mean, "The rest of your life."

Many people will make very expensive trades when facing long prison sentences, including people for whom a mafia torture and hit is a realistic possibility.

So "being ok with it" hand-waves away a very large amount of duress.

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

#105

Post by gruez »

gamblor956 wrote: post #101
gruez wrote: post #55

Earlier quoted context omitted.

The point of bitcoin is that you can drive across the country "carrying" $1B worth of assets, and if you get pulled over by the cops it won't be found. Try doing that with gold bars or stacks of cash.

Plenty of rich people drive or fly across the country all the time "carrying" $1b worth of assets. They're called bank accounts, and you can access them with these things called "check books" and "debit cards" that you can use in infinitely more places than you can transact Bitcoin or other crypto.

Sounds all well and good until your bank account gets seized by the authorities.

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

#106

Post by dcolkitt »

gojomo wrote: post #20
Tuna-Fish wrote: post #7

Earlier quoted context omitted.

> Are they just planning on destroying the wallet key, kind of like if they just burned a billion in seized cash? Why on earth would they do that? Under US law, law enforcement agencies can keep a portion of the proceeds from the sale of any goods they legally seize. This is a massive windfall for them.

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…

Yeah, let's burn these bad coins, thus reducing the supply and raising the net worth of everyone who invested in them. That'll really teach people for using Monero!

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

#107

Post by nullc »

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…

> the Bitcoins they have left have been frozen,

The trustee actually sold bitcoins during the 2017 run up in price and secured enough funds to pay off the cash value of the bankrupcy.

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

#108

Post by tantalor »

Forbo wrote: post #52
dirtnugget wrote: post #47

So what happens to bitcoins which were seized by the US government?

They typically get auctioned off, much like other property seized in asset forfeiture proceedings.

Why go through the trouble? Count it as "revenue" and destroy it.

If the govt wants 1B in cash there are easier ways to get it.

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

#109

Post by gamblor956 »

curiousllama wrote: post #92
jonas21 wrote: post #60

Earlier quoted context omitted.

I am glad we finally have a solution to this pressing issue.

I know it sounds silly but it’s legit. Tons of stories of people driving out to buy a car, getting pulled over, having $10k seized without being charged with a crime, and then having to sue to get it back under a presumption of guilt. Bitcoin is harder to seize under civil asset forfeiture. ETA: in the US. Not sure about other countries.

Or they could have just used a bank account.

More people have lost money to Bitcoin scams and exchange fraud (see e.g. Mt Gox) than have lost their money to civil forfeiture. Depending on the price of Bitcoin, but (based on the current price of Bitcoin) more $$$ has been lost to crypto fraud as well.

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

#110

Post by compiler-guy »

baobabKoodaa wrote: post #86

I find it implausible that someone went through the trouble of stealing $1B from an online marketplace for drugs, then sat on it for 8 years without spending any of it, and then forfeited it to the U.S. government.

Prison makes doing a lot of things extremely inconvenient, and greatly increases your preference to do things that your jailers would like you do.
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