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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

#151

Post by hemloc_io »

nullc wrote: post #103
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.

If I had to guess it's probably because those transactions originally come from the Silk Road.

So while the hacking and money laundering aren't criminally liable, the coins themselves are proceeds from a criminal enterprise, and if you stand in the way of the government trying to get them you could be hit with obstruction(?).

Realistically regardless of the technical level of criminality I doubt that the FBI would let a billionaire be minted with DNM money.

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

#152

Post by overkalix »

shitlord wrote: post #143
spurgu wrote: post #112

Earlier quoted context omitted.

Not sure why you're getting downvoted, to my knowledge you're correct.

The IRS even has a $625k bounty for anyone who can break privacy coins like Monero! https://heraldsheets.com/irs-will-pay-625000-cracks-monero-n...

I'd be extremely surprised if this bounty was anything else than misdirection and bait.

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

#153

Post by [deleted] »

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?

[deleted]

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

#154

Post by simias »

seibelj wrote: post #43
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...

Despite loads of blockchain haters on HN, the government recognizes that bitcoin has value and has formal processes to seize, custody, and auction off the assets to add money to the federal treasury.

They would do the same thing if they had found a truckload of Funko Pops, that's not the government recognizing anything besides the fact that they have market value.

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

#155

Post by tradertef »

jonas21 wrote: post #60
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.

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

For some people, it is a pressing issue. Especially for people from corrupt or despotic states.

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

#156

Post by gamblor956 »

zaroth wrote: post #9

TFA says the suit seeks to seize the $1B in coins after an unknown hacker gained access to the funds. Forfeiture doesn’t mean destroying the coins. If the Fed can gain access to the coins they will auction them off. But if I understand correctly, this is the Fed basically laying a legal claim to and flagging coins that it doesn’t control therefore making them much more difficult to redeem, after seeing that they move…

TFA says that the coins were already seized by the U.S. government, not that they intend to do so.

With respect to the lawsuit, note that this is how civil forfeiture works: the "defendant" is the property seized. In almost all U.S. jurisdictions, a civil forfeiture lawsuit can't be filed until the prosecuting agency is actual in custodial possession of the property. The point of the lawsuit is to give the lawful owners of the property the opportunity to challenge the seizure and get their property back.

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

#157

Post by jaggirs »

RIMR wrote: post #97
aqme28 wrote: post #89

Very curious how they convinced this anonymous hacker to give up $1B to the federal government. The filing makes it sound like it was voluntary, but I doubt it really was.

What do you even do with that much bitcoin realistically? It's dirty, so any attempt to turn it into fiat puts you at risk of being found. Whoever had it refused to touch it for 7 years, likely because they knew it was a fast-track to getting arrested. Giving that money straight to the feds in exchange for immunity might be more attractive than trying to hide the reason you became a billionaire.

Pretty crazy to think about. Its a billion dollars. For that much money, it might almost be worth it to go to jail for it and let your kids try to launder it 50 years later. There are bound to arise opportunities to launder at least part of it right? Even without considering that the bitcoins might become even more valuable, you could set up a dynasty with this money.

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

#158

Post by doggosphere »

klodolph wrote: post #133
ramenmeal wrote: post #118

Earlier quoted context omitted.

Disclaimer, I know very little about bitcoin. If you owe the IRS tax money, they can take the money from your bank account without asking. They just do it. Can the same be done with bitcoin? As far as I know, they aren't able to. If that's the case, there's a difference.

They can "ask" you for your Bitcoin, but the question is phrased, "Would you rather give us your Bitcoin now, or would you rather spend some time in jail first and give us the Bitcoin later?" It generally requires a court order to get money out of your bank. If it's a Bitcoin wallet, then they can just send the court order to you directly, and put you in jail until you comply (i.e. as many years as it takes). The dif…

The difference is fundamental in that the "property" still exists outside the control of the government. If a trusted source has access to it, they can still move it.

If such thing were to happen, and afterwards you complied, then there would be little grounds to hold you for contempt of court.

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

#159

Post by tobyjsullivan »

LiquidSky wrote: post #119
aqme28 wrote: post #89

Very curious how they convinced this anonymous hacker to give up $1B to the federal government. The filing makes it sound like it was voluntary, but I doubt it really was.

"We can charge you with these crimes or you can give up the wallet. Ah, you don't want to go jail? Thank you for your cooperation."

What I find most interesting is that anybody else in America that had $1B to their name - dirty or otherwise - would have almost zero probability of going to prison in the short-to-medium-term, and would therefore never actually hand over the cash. Very, very good lawyers are quite affordable at that point. It's hard to imagine someone with $1B in drug money, for example, just handing it over to the feds.

A very quick search for "largest cash seizures" shows a couple in the $200-300M range. In both cases, the authorities found and seized the physical cash. I don't see any precedent for someone handing it over.

I wonder what made this situation so different. Is it the illiquidity of Bitcoin at that scale? Or did Hacker X just not retain a lawyer/know what to do?

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

#160

Post by simias »

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.

As always in situations like this you shouldn't focus on the face value but the potential value post-laundering of what he could potentially end up with. It's not like he had $1B in the bank he could spend as soon as he got out of jail. Moving even a small fraction of this amount to buy something significant is bound to have people asking questions you don't want to answer.
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