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Anatomy of a $40M+ Bitcoin heist

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Re: Anatomy of a $40M+ Bitcoin heist

#21

Post by dublinben »

Cthulhu_ wrote: post #17
shawabawa3 wrote: post #10

Earlier quoted context omitted.

> I could imagine the FBI simply deleting the wallets but does anyone know their actual policy? Pretty sure whatever their policy is, it isn't "throw away $150million of seized assets"

Except that it's not $150 million of seized assets, it's a bunch of electronic money that could or would at one point potentially sell for approximately $150 million if there were enough buyers for the offered digital product. What does the FBI or other agencies do with intercepted drug money and criminal possessions? Drugs get destroyed, that much I know, but not sure about the other stuff.

In typical cases, money is sent to the U.S Marshalls, and then disposed of according to a judge's instructions. In this case, the FBI can't easily redeem the seized BTC for USD, so it will likely stay in evidence.

Re: Anatomy of a $40M+ Bitcoin heist

#22

Post by dr_doom »

Cthulhu_ wrote: post #17
shawabawa3 wrote: post #10

Earlier quoted context omitted.

> I could imagine the FBI simply deleting the wallets but does anyone know their actual policy? Pretty sure whatever their policy is, it isn't "throw away $150million of seized assets"

Except that it's not $150 million of seized assets, it's a bunch of electronic money that could or would at one point potentially sell for approximately $150 million if there were enough buyers for the offered digital product. What does the FBI or other agencies do with intercepted drug money and criminal possessions? Drugs get destroyed, that much I know, but not sure about the other stuff.

Like other seized assets they will get repurposed for other investigations. When the feds seize a boat, car, or home they either sell them or use them for operations, undercover and the like.[0]

I imagine the btc will be saved until the case is closed then try to be used for other investigations, I don't think the feds would try converting and selling it.

[0] http://www.justice.gov/jmd/afp/02fundreport/02_2.html

Re: Anatomy of a $40M+ Bitcoin heist

#23

Post by wmf »

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

So the '324 is FBI on phone handset' comment, is this the FBI transferring $40M from Silk Road wallets to some other wallet? Or is it something else? Also one wonders what is done with the 'evidence' after the case. I could imagine the FBI simply deleting the wallets but does anyone know their actual policy?

> I could imagine the FBI simply deleting the wallets but does anyone know their actual policy? In the US, law enforcement gets to keep a portion of whatever they seize. You can bet your ass they will not destroy millions worth of assets -- entire departments will get bonuses for years for this. Law requires them to liquidate the assets through auctions, they cannot simply sell them at an exchange, or set a price for…

An exchange is an auction, but I'm sure there's some regulatory capture here that won't allow the government to use any existing exchange. There may be a business opportunity here.

Re: Anatomy of a $40M+ Bitcoin heist

#25

Post by aeturnum »

praxeologist wrote: post #24
quotha wrote: post #13

Earlier quoted context omitted.

By that, do you mean that bitcoin does not have any intrinsic value?

Nothing has intrinsic value.

I think most people would argue that items with uses other than exchange medium generally have some intrinsic value. A dollar has no intrinsic value, but a dollar bill can be used as kindling. Even if no one values it, you can drink water, etc.

Re: Anatomy of a $40M+ Bitcoin heist

#26

Post by praxeologist »

aeturnum wrote: post #25
praxeologist wrote: post #24

Earlier quoted context omitted.

Nothing has intrinsic value.

I think most people would argue that items with uses other than exchange medium generally have some intrinsic value. A dollar has no intrinsic value, but a dollar bill can be used as kindling. Even if no one values it, you can drink water, etc.

Dollar bills have some [quite limited IMO] utility like the paper being burned as kindling or, "Oh, aren't these neat scraps of paper".

Utility != intrinsic value. Nothing has intrinsic value.

Re: Anatomy of a $40M+ Bitcoin heist

#28

Post by dasil003 »

praxeologist wrote: post #26
aeturnum wrote: post #25

Earlier quoted context omitted.

I think most people would argue that items with uses other than exchange medium generally have some intrinsic value. A dollar has no intrinsic value, but a dollar bill can be used as kindling. Even if no one values it, you can drink water, etc.

Dollar bills have some [quite limited IMO] utility like the paper being burned as kindling or, "Oh, aren't these neat scraps of paper". Utility != intrinsic value. Nothing has intrinsic value.

So intrinsic value is a myth. Now we are getting philosophical.

Re: Anatomy of a $40M+ Bitcoin heist

#29

Post by wuliwong »

quotha wrote: post #13
krisdol wrote: post #11

Earlier quoted context omitted.

just a minor nitpick, but bitcoin is also fiat currency.

By that, do you mean that bitcoin does not have any intrinsic value?

I understand the idea of everything having subjective value but I believe people actually mean 'utility' when they claim bitcoin has no 'intrinsic value.'

In response to this, I think of the service provided by bitpay.com. They offer merchants the ability to accept payment in dollars (or many other currencies) on their website/app and receive the payments in dollars (or other currency). There is a middle step where bitcoins are bought and sold. There are some benefits to the merchant as versus 'traditional' online payment methods ie. better security and "cash-like" online purchases. It is abstract, but I believe that this example illustrates utility that bitcoins (or other crypto-currencies) provide.

Re: Anatomy of a $40M+ Bitcoin heist

#30

Post by sp332 »

wmf wrote: post #23
Tuna-Fish wrote: post #20

Earlier quoted context omitted.

> I could imagine the FBI simply deleting the wallets but does anyone know their actual policy? In the US, law enforcement gets to keep a portion of whatever they seize. You can bet your ass they will not destroy millions worth of assets -- entire departments will get bonuses for years for this. Law requires them to liquidate the assets through auctions, they cannot simply sell them at an exchange, or set a price for…

An exchange is an auction, but I'm sure there's some regulatory capture here that won't allow the government to use any existing exchange. There may be a business opportunity here.

"Regulatory capture" means the regulators are working with the regulated organization instead of controlling it.
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