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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

#171

Post by klodolph »

doggosphere wrote: post #158
klodolph wrote: post #133

Earlier quoted context omitted.

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.

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

The court system is not a computer program you can fool with clever tricks. If you are facing a court order to surrender money or other assets and try to evade it by moving the money around, you are just going to find yourself in deeper trouble. People have tried it before.

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

#172

Post by lixtra »

gamblor956 wrote: post #109
curiousllama wrote: post #92

Earlier quoted context omitted.

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.

Lehmann alone lost almost 300B USD of others peoples money. Banks are safe until they aren’t.

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

#173

Post by gamblor956 »

anonAndOn wrote: post #129
gamblor956 wrote: post #90

Earlier quoted context omitted.

You can be held in contempt of court indefinitely.

That depends on your circumstances. There may be an 18 month limit in some situations.[0] [0] https://arstechnica.com/tech-policy/2020/02/man-who-refused-...

Right, for a witness refusing to testify in a court proceeding in which they are not one of the parties.

It's different when you're a defendant or a party to the proceeding.

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

#175

Post by macinjosh »

What happens if the feds memory hole the keys for this wallet effectively destroying the bitcoin? Its just gone forever right? This seems like the best route for the state to supress and destabilize cryptocurrencies. Heck, if the federal gov't were motivated enough they could 'print' money at the Fed, use it to buy bitcoin, and then destroy it! No skin of their backs.

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

#176

Post by alasdair_ »

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…

>"Would you rather give us your Bitcoin now, or would you rather spend some time in jail first and give us the Bitcoin later?"

A billion dollars is an enormous amount of money. The kind of money that could covertly pay an entire prison worth of guards to look the other way for an escape attempt.

Of course, you end up on the run for the rest of your life, which doesn't sound especially fun.

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

#177

Post by shiado »

gamblor956 wrote: post #167
shiado wrote: post #146

Earlier quoted context omitted.

Under US forfeiture laws proceeds is defined as the following: (A) In cases involving illegal goods, illegal services, unlawful activities, and telemarketing and health care fraud schemes, the term “proceeds” means property of any kind obtained directly or indirectly, as the result of the commission of the offense giving rise to forfeiture, and any property traceable thereto, and is not limited to the net gain or pro…

Yes, that's generally how the tracing works. In one extreme case (at the state level), prosecutor successfully seized the house of the parent of a defendant, where the defendant had made one gift mortgage payment on behalf of their parents, who had timely paid the mortgage for several years and were not at any risk of being unable to pay their mortgage.

And with a total lack of fungibility things could get even crazier with crypto. Imagine losing your house because you cashed out some BTC you got off of some guy you don't know for cash that Chainalysis says is linked to the Silk Road five transactions back so it is the proceeds of crime.

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

#178

Post by alasdair_ »

LiquidSky wrote: post #136
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.

This is the kind of magical thinking I'm talking about. If you owed the IRS tax money, you have a legal obligation to pay it, the IRS isn't responsible for coming and finding it. Garnishment or seizure are tools they can use to get the money, but the obligation is always there. If you don't pay you incur fines and penalties, potentially criminal penalties. You also have an obligation to report your assets. If you tri…

>You also have an obligation to report your assets.

Do you? I own things that are worth money that I've never had to report to anyone.

I see needing to report a gain when the asset is sold, but the asset itself is less certain. Do I need to tell them about the $100 bill in my wallet?

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

#179

Post by gmadsen »

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...

people don't realize this. If there is no flaw in the current implementation of Monaro, then it can't be traced. It is entirely possible that something has been figured out and allows tracing, but that is no different than using bitcoin. So I don't get the hate towards Monaro. \

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

#180

Post by travmatt »

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?

There’s no reason to think that Bitcoin is more resistant to rubber hose cryptanalysis than other financial instruments. If a US prosecutor can bring evidence showing that you are in control of a stolen asset, cryptography isn’t going to save you from being indicted.
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