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Feds seized $311M in Bitcoin, then hacker stole it back

bloomberg.com

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Re: Feds seized $311M in Bitcoin, then hacker stole it back

#111

Post by FederalAgent47 »

cube00 wrote: post #107
FormerBandmate wrote: post #86

Earlier quoted context omitted.

>It's simple, like all crypto newbies this prosecutor has just learned: Not your keys, not your coins. The US government can throw your ass in prison for the rest of your life so yes, it is their coins. This is the basis of all government power and in a lot of cases, like this, it's good

What happened to Kevin Mitnick is a cautionary tale that you can be held for at least five years without bail before you get the opportunity to plead your case.

Except he was in jail because he was fugitive from violating probation on a earlier fraud conviction

Re: Feds seized $311M in Bitcoin, then hacker stole it back

#112

Post by bryanrasmussen »

netheril96 wrote: post #49
mNovak wrote: post #41

Earlier quoted context omitted.

>> you would think people in his position would know what private keys are and how to secure Bitcoin funds they pretend to "seize" How exactly would you have handled this differently? They were well aware the account could be recovered via mnemonic, but they couldn't move the funds because they didn't have the PIN.

Don’t call it seizing then.

obviously if they call it seizing and are willing to make the case in court that they had it seized, then the 'stealing' of it is a separate crime that probably has even worse penalties given that the argument would be it was stolen from government secured storage. Which I guess would make for an interesting case.

If they don't charge for another theft then it would be obvious that they don't believe enough in that they had it 'seized' and that what happened was a 'theft'.

on edit: I guess I need to go find it on archive.org to figure out if that has happened or not though.

Re: Feds seized $311M in Bitcoin, then hacker stole it back

#113

Post by runeks »

vikingerik wrote: post #68
throwthere wrote: post #53

80% of the way through the article you can read what actually happened. It's not that the Feds were incompetent and kept a "seized wallet" thinking only they had the private keys or something like that. The wallets were simply protected by a passphrase and Larry couldn't be compelled to give the passphrase. The feds even told the judge they didn't have control of the funds and they could be moved to family/friends be…

Which means the feds didn't actually seize anything. A copy of the wallet without the passphrase is nothing. If the feds don't have the keys, they don't have the coins. It sounds like Michael Scott declaring bankruptcy - the feds declared "I seize Bitcoin" but nothing happened.

> If the feds don't have the keys, they don't have the coins.

Having the keys is necessary but not sufficient. Namely, if other people have the same keys you don't really hold the bitcoins in any practical sense.

It's like ten people all holding a $1000 check drawn against a bank account with only $1000 in it. Whoever cashes the check first has the money, everyone else don't have anything.

Re: Feds seized $311M in Bitcoin, then hacker stole it back

#114

Post by once_inc »

FormerBandmate wrote: post #86
throw101010 wrote: post #22

> The prosecutors accuse Harmon of a very unusual crime: remotely swiping Bitcoin... As opposed to what, "locally" swiping Bitcoin? > ... Bitcoin stored on a computer device the government had already seized in another case Yeah that's your problem Mr. Prosecutor, you have no idea where bitcoins are "stored" or what the device you have seized is. Which leads me to think you are not qualified to "seize" this type of a…

>It's simple, like all crypto newbies this prosecutor has just learned: Not your keys, not your coins. The US government can throw your ass in prison for the rest of your life so yes, it is their coins. This is the basis of all government power and in a lot of cases, like this, it's good

Imagine sending in a hard-core, 2009-era bitcoiner with a single address containing 10k bitcoin. The bitcoiner isn't going to hand over his coins for any reason (including torture, torture of family members, bribery, etc). How does the US government own the coins by incarcerating the bitcoiner?

Re: Feds seized $311M in Bitcoin, then hacker stole it back

#115

Post by JohnSmitty32 »

TedDoesntTalk wrote: post #97
michaelrpeskin wrote: post #31

Earlier quoted context omitted.

I actually did this when it was time to renew my SF 86. I didn’t want to remember all the names and addresses and phone numbers from the last time. So I just did a FOIA on myself and the emailed me my last form already filled out.

What’s an SF 86?

Security clearance

Re: Feds seized $311M in Bitcoin, then hacker stole it back

#116

Post by smcl »

matheusmoreira wrote: post #106
dvzk wrote: post #72

Earlier quoted context omitted.

In the very unlikely dream scenario you mention, you are alone in a disreputable nation with no connections. You are weak and a tempting target for blackmail, robbery, kidnapping, and extortion. A bounty is placed on your head by the most powerful nation in the history of the world. You would think the failed track record of knowledgeable criminals like Gary and Ulbricht would convince the crypto-anarchist losers tha…

> A bounty is placed on your head by the most powerful nation in the history of the world. Seriously? The US does that?

I interpreted it as a sort of unofficial bounty. The US will announce that someone is Wanted and the story will inevitably break that they are in possession of $311m - so if you find that person and are determined[0] you can collect a bounty of sorts

[0] https://xkcd.com/538/

Re: Feds seized $311M in Bitcoin, then hacker stole it back

#117

Post by ricktdotorg »

matheusmoreira wrote: post #106
dvzk wrote: post #72

Earlier quoted context omitted.

In the very unlikely dream scenario you mention, you are alone in a disreputable nation with no connections. You are weak and a tempting target for blackmail, robbery, kidnapping, and extortion. A bounty is placed on your head by the most powerful nation in the history of the world. You would think the failed track record of knowledgeable criminals like Gary and Ulbricht would convince the crypto-anarchist losers tha…

> A bounty is placed on your head by the most powerful nation in the history of the world. Seriously? The US does that?

i would say that the large cash rewards given for information leading to the capture of folks on the FBI's Most Wanted list qualify as bounties.

Re: Feds seized $311M in Bitcoin, then hacker stole it back

#118

Post by Double_a_92 »

JumpCrisscross wrote: post #74
vikingerik wrote: post #68

Earlier quoted context omitted.

Which means the feds didn't actually seize anything. A copy of the wallet without the passphrase is nothing. If the feds don't have the keys, they don't have the coins. It sounds like Michael Scott declaring bankruptcy - the feds declared "I seize Bitcoin" but nothing happened.

> Which means the feds didn't actually seize anything Seizure is tied to possession, a legal concept [1]. Not control. Courts commonly authorize the seizure assets not yet under the government's physical control. (I agree the terminology is misleading.) [1] https://www.law.cornell.edu/wex/seizure

But they still didn't "possess" anything, except a meaningless blob of data... of which there are probably copies of out there.

Re: Feds seized $311M in Bitcoin, then hacker stole it back

#120

Post by Cederfjard »

once_inc wrote: post #114
FormerBandmate wrote: post #86

Earlier quoted context omitted.

>It's simple, like all crypto newbies this prosecutor has just learned: Not your keys, not your coins. The US government can throw your ass in prison for the rest of your life so yes, it is their coins. This is the basis of all government power and in a lot of cases, like this, it's good

Imagine sending in a hard-core, 2009-era bitcoiner with a single address containing 10k bitcoin. The bitcoiner isn't going to hand over his coins for any reason (including torture, torture of family members, bribery, etc). How does the US government own the coins by incarcerating the bitcoiner?

Just because you hide a big bag of cash where no one can find it, it doesn’t necessarily mean it’s yours, just that you have it.

If the US government says that it has lawfully seized your bitcoin, then by law the US government owns the bitcoin, even if they don’t possess it. If you’re successfully keeping it from them, they can and will punish you for it. Again, as FormerBandmate said, that’s the basis of their power.

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