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FBI Seized 144,000 Bitcoins ($28.5 Million) From Silk Road Bust

Soulskill posted about 10 months ago | from the bet-he-wishes-he-cashed-out-sooner dept.

Bitcoin 162

SonicSpike writes "An FBI official notes that the bureau has located and seized a collection of 144,000 bitcoins, the largest seizure of that cryptocurrency ever, worth close to $28.5 million at current exchange rates. It believes that the stash belonged to Ross Ulbricht, the 29-year-old who allegedly created and managed the Silk Road, the popular anonymous drug-selling site that was taken offline by the Department of Justice after Ulbricht was arrested earlier this month and charged with engaging in a drug trafficking and money laundering conspiracy as well as computer hacking and attempted murder-for-hire. The FBI official wouldn't say how the agency had determined that the Bitcoin 'wallet' — a collection of Bitcoins at a single address in the Bitcoin network — belonged to Ulbricht, but it was sure they were his. 'This is his wallet,' said the FBI official. 'We seized this from DPR,' the official added, referring to the pseudonym 'the Dread Pirate Roberts,' which prosecutors say Ulbricht allegedly used while running the Silk Road."

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144,000 bitcoins (0)

Anonymous Coward | about 10 months ago | (#45244321)

Sounds like unlimited arcade games for those lucky to get divvied in to the stash.

Well (4, Interesting)

ledow (319597) | about 10 months ago | (#45244341)

They may have "seized" them, but unlike with physical property, how can they be sure they are "unspent" and still worth-ful?

What if, when they try to convert them to cash, they are told they've already appeared in the blockchain and have been "spent" elsewhere? Would that not be quite embarrassing? That, from under the noses of the FBI, someone has recovered all that money via an anonymous currency exchange and ran off with the proceeds?

I sincerely hope that they cash in the Bitcoins before something appears on the blockchain from that wallet. Double-spending is blocked, but that doesn't mean the FBI would be the first person to try to spend them. Especially not now they've put it on the news. Anyone could have a copy of that wallet.

Re:Well (4, Informative)

Immerman (2627577) | about 10 months ago | (#45244387)

Why convert them to cash? They can't freeze the account as they could with a bank, but if they have the account credentials they can simply transfer all the bitcoins to a new holding account to which they have the only credentials.

Re:Well (5, Informative)

Paul King (2953311) | about 10 months ago | (#45244431)

...but if they have the account credentials they can simply transfer all the bitcoins to a new holding account to which they have the only credentials.

Which is exactly what the article suggests they've done:

"The FBI official pointed me towards this Bitcoin address, which according to the public Bitcoin transaction record known as the “blockchain” received transfers of close to 144,000 in just the last 24 hours. “They finished moving them at 3am this morning,” said the official."

Re:Well (5, Interesting)

pla (258480) | about 10 months ago | (#45244637)

This leads to an interesting problem for the FBI...

They can either keep them in that account forever, basically useless to anyone...
Convert them to US dollars, just about the single most Bitcoin-legitimizing action I can imagine...
Or they can actually use them as Bitcoins.

The last one gets interesting, because the FBI has accidentally revealed their own current address by this large transfer to themselves. Bam, we have one "known bad" address. Anyone they trade with, then, becomes tainted by association. Would you trust, for example, a VPN service that has accepted payments from the FBI?

Re:Well (5, Insightful)

hibiki_r (649814) | about 10 months ago | (#45244797)

It's an extremely uninteresting problem.

Tainted by association makes no sense at all. If you limit the association to direct association, it's trivial to bypass by creating intermediaries. If you make the taint spread, then almost everyone is tainted, so there's nothing to gain. You might as well try to avoid people that are 7 degrees of separation or less from Kevin Bacon.

Re:Well (1)

pla (258480) | about 10 months ago | (#45245069)

Tainted by association makes no sense at all.

It works well enough for them to use against us.

Yes, it catches some innocents. And yes, eventually the "contagious" taint becomes too dilute to take seriously. But for a few layers of transactions, I for one wouldn't touch any BTC within a few generations of separation of this transactions if you offered to just give it to me for nothing.

By way of analogy - Would you, given the chance, choose to get it on with your favorite supermodel, if you knew that she had ridden the Magic Johnson bareback just a few months earlier?


Y'know, on reflection, that attitude (my own) really bothers me. I find it so utterly abhorrent that I consider the agents of my own government so untrustworthy that I don't even trust those they do business with... I remember, once upon a time, believing that the government existed to help us.

Then again, I suppose I believed in the Easter Bunny once upon a time, too.

Re:Well (1)

um... Lucas (13147) | about 10 months ago | (#45245645)

So, your government arresting someone who allegedly tried to have two people executed isn't helping you? Not only tried, but he thought he succeeded. His jaw probably hit the floor when he found out both his hits were nothing more than fantasies in his own mind.

Re:Well (1)

pla (258480) | about 10 months ago | (#45245863)

So, your government arresting someone who allegedly tried to have two people executed isn't helping you?

Accidentally doing some good in the process of defending corporate interests doesn't redeem them as a whole, any more than a mob boss "keeping the peace" in his home neighborhood make him a net benefit to society.

Re:Well (0)

Anonymous Coward | about 10 months ago | (#45245865)

allegedly tried to have two people executed

Is there a non-government source for that allegation? I don't know about you, but when an organization lies as many times as the US government has, I tend to treat their claims with a fair bit of skepticism.

Re:Well (0)

Anonymous Coward | about 10 months ago | (#45245991)

U.S. Government is more likely to assassinate your than Ross Ulricht is lol

Either those two people had it comin through association or whatever. Assasins don't scare me. Overarching authoritative control of peoples minds and lives does.

Re:Well (0)

Anonymous Coward | about 10 months ago | (#45245587)

You spread it with decay, or do some sort of Bayesian analysis. If it does 1/1 transactions with tainted nodes, it's tainted, it it does 1/10 transactions within a cluster of tainted nodes you give it a score of .5 tainted. 1/100- .1 tainted and 1/1000 the same as zero.

Re:Well (1)

pipelayerification (1707222) | about 10 months ago | (#45245649)

He is the Center of the Universe

Re:Well (2)

Paul King (2953311) | about 10 months ago | (#45244909)

Well previously they had said they would cash them in (http://www.forbes.com/sites/kashmirhill/2013/10/04/fbi-silk-road-bitcoin-seizure/) in.

I don't see anything in doing that about legitimizing them, as far as I am aware the FBI don't contend them to be illegal anyway.

I doubt the FBI is worried about them accidentally revealing their own address, in fact if anyone wants to decide that makes someone dealing with them tainted, then they could of course leverage that, pay for a VPN account with every provider you don't currently have some snooping deal with, thus driving people to the ones you do have influence with.

Re: Well (1)

RyuuzakiTetsuya (195424) | about 10 months ago | (#45245481)

Of course they're not illegal. Bit coins are Disney dollars that are useful. The FBI just cares about the drugs and attempted murder.

Re:Well (-1)

Anonymous Coward | about 10 months ago | (#45245027)

Keeping them in that account won't make them useless to anyone.

Keeping them in that account will mean that Ross is still able to use them. And he will and already has if they keep them in that account.

Wait you think he didn't have other copies of a couple short strings of characters? (public/private key)

You have a very strange idea of how the bitcoin protocol works.

Re:Well (2)

pla (258480) | about 10 months ago | (#45245129)

Keeping them in that account will mean that Ross is still able to use them.

By "that account", I mean the one they transferred them into immediately after taking possession of RU's wallet.


You have a very strange idea of how the bitcoin protocol works.

You clearly didn't RTFA.
I've written my own miner.

I'll take that definition of "strange, if you like.

GOVERNMENT SELLING SEIZED BITCOINS (1)

rawtatoor (560209) | about 10 months ago | (#45245239)

This would be fraudulent for the body that is supposedly responsible for the money. They would be tainting the US Dollar in a real way that wouldn't go unnoticed.

Re:Well (2)

PPH (736903) | about 10 months ago | (#45245397)

I wouldn't be surprised if the NSA has cracked the encryption involved in BitCoin transactions. One day soon, the FBI will examine their account balance and find it empty. The BitCoins having been transferred through the NSA to the CIA to fund some assassinations. Or to the next al Qaida.

Re:Well (1)

Anonymous Coward | about 10 months ago | (#45245451)

Or they could auction them off, like they do a lot of stuff.

Re:Well (2)

ultranova (717540) | about 10 months ago | (#45245731)

Convert them to US dollars, just about the single most Bitcoin-legitimizing action I can imagine...

Which might actually be a good move. US dollar is going to undergo hyperinflation when the petrodollar scheme collapses and all those bucks return home, so by moving as much of the economy as possible to alternatives helps minimize the damage. At the far extreme, if the entire US economy uses something else than the dollar the Fed is free to treat it as monopoly money and simply laugh as its debt dissolves. And Bitcoin is a good substitute - it's not controlled by any (other) country, it's designed for the Interent economy, it's impossible to forge, all transactions are public knowledge...

I doubt the US government has such foresight and capacity for long-term planning, but an agency leader might.

Would you trust, for example, a VPN service that has accepted payments from the FBI?

Is there some reason to not to? The FBI can simply order a VPN to betray its customers, it doesn't need to bribe them.

A seizure or an Investment? (2)

j-stroy (640921) | about 10 months ago | (#45244447)

Will the government then be auctioning off the proceeds? Holding them for cashing in later like a bond? Who is advising them on managing the funds? There is both a certain irony and legitimacy in a state holding this new stateless currency.

Re:A seizure or an Investment? (0)

Austrian Anarchy (3010653) | about 10 months ago | (#45244519)

Will the government then be auctioning off the proceeds? Holding them for cashing in later like a bond? Who is advising them on managing the funds? There is both a certain irony and legitimacy in a state holding this new stateless currency.

It is a government agency, of course there are droves of people to advise, manage, and make every sort of decision on what to do with someone else's money.

Re:A seizure or an Investment? (2)

TheP4st (1164315) | about 10 months ago | (#45244561)

It's a Government agency and being such it is heavily influenced by revolving door politics, so I can imagine that what will happen is that an external consulting company will be assigned with the task of managing the funds and will invoice them to the tune of 144,001 Bitcoins.

Re:A seizure or an Investment? (1)

Anonymous Coward | about 10 months ago | (#45244555)

They will hold them until the Bitcoins are worth enough to pay off the national debt.

Re:A seizure or an Investment? (2)

slick7 (1703596) | about 10 months ago | (#45244567)

They will probably consider them spoils of the war on drugs. Then, they will use the concept in government transactions.

Re:Well (-1)

Anonymous Coward | about 10 months ago | (#45244517)

ALL must drop to there knees, for the unruly neo-communists known as the federal US government know all that is good for PR and the American People.

All hail Satan,,

HAIL, OUR DARK OVERLORD!!!

Re:Well (1)

Anonymous Coward | about 10 months ago | (#45244571)

Assuming they have an expert knowledgeable about bitcoin on their staff - I'm sure the first thing they do is transfer them to a new address for "safe keeping", preventing the original owner from doing so at a later time.

The fact that so much bitcoin was in a single wallet to begin with is pretty poor planning on DPR's part... someone with that much BTC should probably be a bit more careful about where it's located.

Re:Well (1)

slashmydots (2189826) | about 10 months ago | (#45244905)

You clearly have no idea how bitcoins work whatsoever. You can tell if they're spent or not. "Spending" them changes ownership over to a new wallet. The wallet file is basically a deed to bitcoins floating around in the network and it specifically says in realtime how many you own.

Re:Well (0)

Anonymous Coward | about 10 months ago | (#45245337)

... and it specifically says in realtime how many you own.

Realtime [sic]? Nope. A confirmation takes ~5-10 minutes. [blockchain.info]

6 confirmations (often required by exchanges/merchants) can take an hour or so.

Are you sure YOU know how bitcoins work?

Re:Well (0)

Anonymous Coward | about 10 months ago | (#45245899)

For the purposes of the discussion, an hour certainly counts as "realtime".

Re:Well (1)

um... Lucas (13147) | about 10 months ago | (#45245569)

They're in a brand new wallet; all the coins were transferred in on 10/25/2013. So even if someone had a backup of DPR's wallet (which they don't, otherwise they would have moved them themselves already), the coins are gone from it now. And if the coins had already been spent, it would be obvious, too (the block chain.info link above would show a zero balance).

Moral of the story; Crime pays. Lots. But what good is that if you can't benefit from that pay?

Re:Well (0)

Anonymous Coward | about 10 months ago | (#45245969)

Money wasn't "recovered" it was never anyones to recover to begin with. It was spent in mutual and conceptual trade. Between consenting parties. What it was used to buy doesn't change that fact.

Here is my question.... (1)

Lumpy (12016) | about 10 months ago | (#45244361)

If the feds have seized the file he had with them in it, would someone be able to sped a copy of that file? Does bitcoin have a way to let you "back up" your money so that in the case of a government raid you secret copy elsewhere can be put into action and use the bitcoins for your defense fund, etc? Because it is well known the feds will seize all assets right away to prevent the accused from being able to afford good council and fight in court. If you don't have access to your money, you cant hire good lawyers.

Because if this is the case, then I look at bitcoin with more interest and a different light, was that by design or by accident?

Re:Here is my question.... (1)

Anonymous Coward | about 10 months ago | (#45244403)

Actually that is exactly how it works. If you have more than one copy of your private keys, any of those copies can spend the coins.

Re:Here is my question.... (3, Interesting)

Paul King (2953311) | about 10 months ago | (#45244427)

The article states:

"The FBI official pointed me towards this Bitcoin address, which according to the public Bitcoin transaction record known as the “blockchain” received transfers of close to 144,000 in just the last 24 hours. “They finished moving them at 3am this morning,” said the official."

So no, they have already "spent" them by transferring them to another address. If they've already been spent then Bitcoin shouldn''t allow them to spent again from a "backup", otherwise it'd be worthless as a currency, you buy X from me with the coins, I send you X, then you can spend them again rom this backup depriving me of the value.

Re:Here is my question.... (4, Informative)

Immerman (2627577) | about 10 months ago | (#45244423)

Your bitcoins aren't in your "wallet" file - they're in an account in the bitcoin block chain "bank". The file simply contains your credentials to be able to transfer those coins. You can back up those credentials, in fact it's strongly recommended since if you lose them (say to a hard drive crash) the coins in the account become permanently unspendable. And anybody with a copy of those credentials can indeed spend the money in the account. I would imagine though that a seizure involves gaining access to the credentials and transferring those bitcoins into an exclusively FBI controlled account to avoid just such a scenario.

By the same token, if you securely encrypt your credentials and refuse to give them the key despite any threats they may bring, they can't meaningfully seize those assets. Of course that "sharing" may come involuntarily via surveillance software surreptitiously installed on your computer.

Re:Here is my question.... (1)

Wrath0fb0b (302444) | about 10 months ago | (#45245571)

By the same token, if you securely encrypt your credentials and refuse to give them the key despite any threats they may bring, they can't meaningfully seize those assets. Of course that "sharing" may come involuntarily via surveillance software surreptitiously installed on your computer.

If it's a legal case (and not some black-ops) and they have a legitimate order, they can compel you to transfer the money or throw you in jail for contempt (note, I didn't say you have to give them the key, only transfer the money). This sort of thing happens all the time in nasty divorce cases where one spouse tries to lock the money up where the court and the other spouse cannot find it. A few persist and spend a long time in jail [wikipedia.org] .

That is, most people have a really way-too-technical notion of what "seizure" usually entails. In most cases that don't involve the SWAT, it just means ordering someone to do something. In the case of divorcees that don't want to abide the decision of the Family Court, this seems like the expedient way to do it.

There's not even a wrench? (1)

Sits (117492) | about 10 months ago | (#45245845)

Obligitory XKCD 538 [xkcd.com] link.

Re:Here is my question.... (1, Funny)

nospam007 (722110) | about 10 months ago | (#45244473)

"If the feds have seized the file he had with them in it, would someone be able to sped a copy of that file? "

That's exactly right. The new Dread Pirate Roberts already spent them, even if the FBI finds that 'Inconceivable!'

They keep using that word, but I don't think it means what they think it means.

Re:Here is my question.... (3, Interesting)

bill_mcgonigle (4333) | about 10 months ago | (#45244757)

This is my real take-away from the article: DPR trusted nobody for important things that need trust and trusted many people for things that should not have had trust (e.g. doing co-lo in San Franscisco). He could have easily hired two(+) attorneys in foreign jurisdictions and had them combine the key parts in the event of his capture and transfer the funds to a legal defense fund. Obviously, he didn't or the FBI would have bupkis.

Trust needs to be managed, not avoided.

Seized? (0)

Anonymous Coward | about 10 months ago | (#45244375)

Did they seize a file that is encrypted? That's not the equivalent of seizing bitcoins.

Re:Seized? (0)

Anonymous Coward | about 10 months ago | (#45244393)

i think if the wallet is encrypted they couldnt determine how many coins were in there, or the address without decrypting it. but i think whats extra funny, is that if they have the coins, the fbi/etc seems to think that cryptocurrencies are basically used for crime, so by converting them into USD at an exchange, they are being sold to criminals (like, not the exchange, but eventually) to fund more money laundering and organized crime. pure hilarious because to get any use from them, thats what they have to do. give millions of dollars to organized crime

Re:Seized? (1)

Anonymous Coward | about 10 months ago | (#45244443)

i think if the wallet is encrypted they couldnt determine how many coins were in there, or the address without decrypting it. but i think whats extra funny, is that if they have the coins, the fbi/etc seems to think that cryptocurrencies are basically used for crime, so by converting them into USD at an exchange, they are being sold to criminals (like, not the exchange, but eventually) to fund more money laundering and organized crime. pure hilarious because to get any use from them, thats what they have to do. give millions of dollars to organized crime

Sure they can.
FBI will have a new addition to their "uniform" - alpaca socks.
And they can also buy absurd amounts of quality coffee. This is actually it, there is nothing else you can use your bitcoins for.
http://yro.slashdot.org/story/13/10/26/1153212/fbi-seized-144000-bitcoins-285-million-from-silk-road-bust#

Re:Seized? (1)

fredklein (532096) | about 10 months ago | (#45244487)

FBI will have a new addition to their "uniform" - alpaca socks.
And they can also buy absurd amounts of quality coffee. This is actually it, there is nothing else you can use your bitcoins for.

Lies.

http://usebitcoins.info/ [usebitcoins.info]

There are thousands of businesses that accept Bitcoins.

Re:Seized? (1)

ArbitraryName (3391191) | about 10 months ago | (#45245637)

Are there any that sell useful physical goods (not arts and crafts) at reasonable prices? I've never found one that isn't ridiculously expensive over shopping at a non-BTC store.

Re:Seized? (1)

ddegirmenci (1644853) | about 10 months ago | (#45244601)

They could buy shitloads of reddit gold.

Re:Seized? (1)

gmuslera (3436) | about 10 months ago | (#45244951)

They can give them to organizations that accept bitcoins as donations [bitcoin.it] . I don't think that they will pick Wikileaks, the Pirate Party, or even free software with focus in privacy, but i.e. Khan Academy or Sugar Labs are good neutral enough candidates that even they can agree that could give a good use to that donation..

Re:Seized? (1)

John Jorsett (171560) | about 10 months ago | (#45245365)

They can give them to organizations that accept bitcoins as donations [bitcoin.it] . I don't think that they will pick Wikileaks, the Pirate Party, or even free software with focus in privacy, but i.e. Khan Academy or Sugar Labs are good neutral enough candidates that even they can agree that could give a good use to that donation..

Unless Congress does it, that's called a "gift of public funds" and is, for obvious reasons, illegal.

Re:Seized? (1)

gmuslera (3436) | about 10 months ago | (#45245663)

The problem is that the government don't recognize bitcoins as money, so giving it is not using them as public funds.

Re:Seized? (0)

Anonymous Coward | about 10 months ago | (#45245751)

Governement doesn't recognize cars as money too, but I don't think they're free to give seized drug dealers' cars away.

Government does recognize bitcoin as valuable and IIRC expects you to declare them for tax purposes, so there.

Re:Seized? (2)

Immerman (2627577) | about 10 months ago | (#45244453)

The coins aren't in the wallet - they're in a completely transparent, publicly viewable account in the bitcoin block chain. Every transaction is visible to everyone. The wallet only contains the credentials that allow you to transfer the coins to another account. If the wallet was encrypted, and they were unable to access the credentials, then they cannot meaningfully seize the account since another copy of the credentials could (and should) exist elsewhere allowing someone else to spend the coins.

Re:Seized? (3, Interesting)

Fnord666 (889225) | about 10 months ago | (#45244995)

The coins aren't in the wallet - they're in a completely transparent, publicly viewable account in the bitcoin block chain. Every transaction is visible to everyone. The wallet only contains the credentials that allow you to transfer the coins to another account. If the wallet was encrypted, and they were unable to access the credentials, then they cannot meaningfully seize the account since another copy of the credentials could (and should) exist elsewhere allowing someone else to spend the coins.

Given that according to TFA, the Feds have already transferred the coins to another account that they hold and that the transfers are a part of the current accepted blockchain, I would say that they have seized them. A side effect is that by revealing the blockchain entry for the transfers, they have marked these coins as government owned and traceable for the rest of their existence.

I wonder if it would be possible to also transfer the coins using a blockchain prior to the Fed transfer, then somehow replace the Fed transfer in the current blockchain and get the majority to accept the substitution, effectively denying the Feds their seizure? I realize that the majority design of Bitcoin is meant to prevent this sort of thing in reality, but it should be theoretically possible, right?

Re:Seized? (0)

Anonymous Coward | about 10 months ago | (#45245347)

Depends on how voluntarily they would accept it.

If I understand correctly, you'd have to basically re-mine every block since the transfer, removing mentions of transfers to FBI wallet (and then re-mine all those blocks mined while you was doing it) - it's called a blockchain because every block has a hash of the previous block in the chain to link them, so you can't change just one.

If everyone agrees to accept your version of block chain - you're done. If not - that's where "51%" comes in, you'll have to drive the majority of computing power and continuously mine new blocks agreeing with your version of reality ahead of the rest of the miners.

But would you want to do that, really? Today you agree to punish big bad FBI, tomorrow you agree to punish a fly-by-night BTC exchange and day after tomorrow MtGox DDoSes a competing exchange, claims those did a fly-by-night and network lynches them.

Would you want that precedent?

Re:Seized? (1)

Immerman (2627577) | about 10 months ago | (#45245447)

Yeah, if you control fifty-one percent of the bitcoin network then you can retroactively rewrite financial history. It'll be pretty obvious though, so don't expect the other 49% to simply accept it.

Re:Seized? (1)

gwern (1017754) | about 10 months ago | (#45245627)

No, you can't 'rewrite history'. What the 51% attack lets you do is block any additional transactions by refusing to produce blocks with those transactions in them, which lets you do double-spends. However, you cannot spend someone else's coins because you cannot create valid signatures without their private keys.

Re:Seized? (1)

um... Lucas (13147) | about 10 months ago | (#45245701)

Yes, if you 51% the network. But you'd undo every payment that occurred since then, and you'd undo every miners block reward as well. Therefore, no one will possibly go along with that idea.

Busted (0)

Anonymous Coward | about 10 months ago | (#45244377)

Well, he took the risk, and paid the price.

Re:Busted (2)

Opportunist (166417) | about 10 months ago | (#45244799)

Should've opened a bank. There, you can take any kind of risk and we pay the price if it blows.

Re:Busted (1)

Sponge Bath (413667) | about 10 months ago | (#45245521)

Well, he took the risk, and paid the price.

The Dude Pirate Roberts abides.

No proof (-1)

loufoque (1400831) | about 10 months ago | (#45244413)

This whole seizing was done without any proof and is therefore illegal.
With all the violations of due procedure that the FBI made, Ulbricht should be fine, like the MEGA guy was.

Re:No proof (2)

Anonymous Coward | about 10 months ago | (#45244467)

the standard is not "proof", the standard is, they need to follow "due process", which I'm sure they are doing, though he is free to challenge it.

it's like the old "if people are innocent till proven guilty, how can they hold you in jail till your trial?" answer: you are not innocent till proven guilty, you are entitled to the presumption of innocence in court, but outside the court, much more reasonable standards prevail, like "was a crime committed?" and "is there evidence that points to somebody?" That's how due process works.

Re:No proof (0)

Anonymous Coward | about 10 months ago | (#45244501)

much more reasonable standards prevail

Innocent unless proven guilty is reasonable.

Re: No proof (0)

Anonymous Coward | about 10 months ago | (#45244553)

The court wants people to show up at their trial. This is done through either collateral i.e. bail or just holding people in jail if they're more likely to flee than appear. Bail is supposed to be returned too.

Re:No proof (1)

Immerman (2627577) | about 10 months ago | (#45244495)

Well, if they were able to seize the account (presumably meaning transfer the coins to a FBI-controlled account) then they at least know that it belonged to Person X, because they had to get the credentials from *someone*. So on that front what are you going to claim? "Honest officer, I was just holding this authorization to spend millions of dollars worth of bitcoins for a friend" ?

Beyond that I can't say much as I haven't looked into the details of the case.

Re:No proof (1)

rmdingler (1955220) | about 10 months ago | (#45244591)

Given the track record of American law enforcement regarding seizures of assets "believed" to have been gained in unlawful transactions, I would say "Good Luck" fighting that. Further damaging his case, there is a link at the Forbes piece describing some (alleged) Mr. White-like tactics against an embezzler and a blackmailer.

Re:No proof (0)

loufoque (1400831) | about 10 months ago | (#45245005)

All this technology is anonymized. There is no tracking possible, it's just guesswork.
This is not a normal bank account.

Re:No proof (4, Interesting)

Immerman (2627577) | about 10 months ago | (#45245411)

No, not even a little. Have you studied the technology? It's all pseudonymous, which is a completely different thing. Anybody who wishes to can completely monitor all activity on any account, the only anonymity resides in how well you hide the connection between yourself and your account number. Publish your account number publicly, like any legitimate business would do to accept payments, and there is no anonymity whatsoever, and every transaction past and present with that account is now known to be a transaction with that business. If you want to be anonymous then the onus is completely on you to make sure a link between your account number and your real identity is never discovered, the technology offers nothing in that regard.

Frankly, take away the gauze of anonymity and what you have is every financial analyst's wet dream of a currency - *every* transaction laid bare for all the world to see, in real time, and with a permanent record.

Re:No proof (1)

ArbitraryName (3391191) | about 10 months ago | (#45245743)

http://bitcoin.org/en/you-need-to-know [bitcoin.org]

Bitcoin is not anonymous

Some effort is required to protect your privacy with Bitcoin. All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances. This is one reason why Bitcoin addresses should only be used once. Always remember that it is your responsability to adopt good practices in order to protect your privacy.

Re:No proof (0)

Anonymous Coward | about 10 months ago | (#45244595)

The FBI doesn't care if the man is found guilty or innocent later on. They just want to bully, terrorize and disrupt the life of anybody who tries to mess with the established system.

Re:No proof (1)

Anonymous Coward | about 10 months ago | (#45244823)

The legal standards for asset forfeiture are not what you think they are.

http://en.wikipedia.org/wiki/Asset_forfeiture

Re:No proof (0)

Anonymous Coward | about 10 months ago | (#45244899)

I bet you said the same thing to your mom when she caught you fapping on her keyboard. Didn't keep you out of trouble then, either.

The short term safety of other innocent people, or of the good electronics from getting sticky, means a balance has to be struct to protect society and the fine Corinthian leather of your mom's new computer chair birthday present.

Dread Pirate Roberts (4, Insightful)

Razalhague (1497249) | about 10 months ago | (#45244445)

I wonder if this "Dread Pirate Roberts" is only one person, given how the name was used in The Princess Bride.

Re:Dread Pirate Roberts (1)

bill_mcgonigle (4333) | about 10 months ago | (#45244717)

He's at least the second - google should find you the longer version. Suffice it to say, the first DPR is retired and living like a king in Patagonia.

Re:Dread Pirate Roberts (1)

Opportunist (166417) | about 10 months ago | (#45244789)

The should be glad he didn't call himself Spartacus.

With a club (0)

Anonymous Coward | about 10 months ago | (#45244471)

Or waterboarding?

Shaky shaky (1)

lapm (750202) | about 10 months ago | (#45244481)

Sounds like feds are going to have uphill battle in court trying to prove all these beyond reasonable dought. After all in court its not what they say, but what they can actually prove. Lets just hope some innocent people docent come forward and claim those bitcoing to be stolen by feds from them... Would be embarrashing, not to mention blow feds case out of water...

Re:Shaky shaky (0)

Anonymous Coward | about 10 months ago | (#45244719)

Oh, I'm sure they won't have any problems. The days when the US government had to prove it's legal cases and do things in a legal manner are long gone. In fact if the FBI doesn't win this case I would count it more as a front to try to pretend that they can't win them all by default, because the amount of money here is negligible to the FBI, and they're really into this more for the notoriety of being able to pretend they're still relevant in a world where nobody cares about things like the drug war anymore.

Only the CIA (0)

Anonymous Coward | about 10 months ago | (#45244493)

are allowed to traffick drugs and currency. Shame on you, dude.

Was the FBI's seizure illegal? (0, Interesting)

Anonymous Coward | about 10 months ago | (#45244507)

To move bitcoins you must spend money to transact them, about 2.5% is the transaction fee.

That's $625000 the FBI spent of that money, if not more.

Would that be illegal?

Re:Was the FBI's seizure illegal? (0)

Anonymous Coward | about 10 months ago | (#45245055)

You've never used Bitcoin before, have you? They could have transferred the money for free.

Re:Was the FBI's seizure illegal? (0)

Anonymous Coward | about 10 months ago | (#45245595)

They could have transferred all of those coins paying just a 0.0005 btc transaction fee. (so like 8 cents)

Re:Was the FBI's seizure illegal? (1)

ArbitraryName (3391191) | about 10 months ago | (#45245671)

Nothing in your post is correct.

Re:Was the FBI's seizure illegal? (2, Informative)

Anonymous Coward | about 10 months ago | (#45245799)

Here is one of the transactions. [blockchain.info]

You can see that the fee paid was 0.

You can see their account here. [blockchain.info]

Why speculate when the evidence is all public and easy to find?

Lessons from Ancient Anecdotes (0)

Anonymous Coward | about 10 months ago | (#45244521)

Don't keep all your eggs in one basket...

so worthless currency? (-1)

Anonymous Coward | about 10 months ago | (#45244569)

so if fbi can "seize" your wallet and transfer out your theohretical dollars, how is bit-coin worth anything such that the fbi doesn't try to 'seize' everyone else's or anyone 'seize' any other credentials and transfer the funds to themself for that matter.

forensics (0)

Anonymous Coward | about 10 months ago | (#45244641)

I guess this means that the FBI was able to recover the contents of RAM on Ulbricht's laptop after he was arrested. From what I understand, the FBI waited until they got confirmation from an informant that DPR was logged into Silk Road before they grabbed him and his laptop. They were careful to separate the laptop from Ulbricht before he reealized he was being busted and could shut-down/wipe-keys and frustrate efforts to recover evidence and his booty.

Do you think they carefully disassembled the laptop while it was on and chilled the memory with LN2 before removing the modules and placing them into a hardware duplication device or do you think they just slapped in a USB doohickey that ran some code to copy the memory?

Re:forensics (0)

Anonymous Coward | about 10 months ago | (#45245105)

I bet they used a wrench to the knee.

Re:forensics (1)

ArbitraryName (3391191) | about 10 months ago | (#45245689)

They probably just put him in an interrogation room and talked about Federal prison until he cried and gave up his passwords.

It's his. Because we say so. (1)

Opportunist (166417) | about 10 months ago | (#45244775)

If that kind of "evidence" holds a drop in water in court, good night legal system.

So, what if... (0)

Anonymous Coward | about 10 months ago | (#45244835)

If someone could overtake 51% of the Bitcoin mining, they could change the blockchain. What if 51% of the Miners agree that the FBI shouldn't have that money?

Re:So, what if... (0)

Anonymous Coward | about 10 months ago | (#45245051)

Difficulty just jumped to 400m in the last 24 hrs, and 150% just in the last 2 weeks.

Yeah, your post makes a lot of fucking sense. Numbnuts.

Re:So, what if... (0)

Anonymous Coward | about 10 months ago | (#45245229)

First, there is a problem of talking all the people into doing that.

Second, there is a problem of actually doing that - you'd basically have to throw away all the transactions since FBI started transferring funds to its own wallet and redo all the blocks again until this moment again, without FBI's transfers.

And lastly, there is a problem that once you agreed that FBI shouldn't have that money, who would trust the Bitcoin network not to decide next that Winklewoss bros. are out to game the BtC system and shouldn't have their money, or that MtGox have too much influence on BtC price and shouldn't have the money, or that OP is a fag and shouldn't have his money? That slope's slippery. Either BitCoin is open, controlled by nobody and miners only impartially process transactions they're given, or every your transaction is potentially a hostage to the whims of BTCGuild and GHash.IO.

eggs in one basket (0)

Anonymous Coward | about 10 months ago | (#45245301)

call me paranoid but i use multiple wallets and addresses. I have two private keys (paper wallets) that are not loaded into an online wallet or another client.

i also create multiple backups every 24 hours of my encrypted wallet.dat in blockchain.info files.

Re:eggs in one basket (1)

ArbitraryName (3391191) | about 10 months ago | (#45245913)

Great. How long will you last under interrogation?

DEA & FBI (0)

Anonymous Coward | about 10 months ago | (#45245565)

would do a service to US and human society in general if they spent the money on education and eradicating poverty instead of fighting drug wars that are lost already. Fuck NSA FBI anf DEA! Funny how the land of the free degenerated into a police state.

Worth $28 million? No. (0)

Anonymous Coward | about 10 months ago | (#45245653)

Why is the FBI so incompetant to think they are worth $28 million? You can't compute the actual amount of USD you'd get by lastprice x number of bitcoins. You need to look at the order book. On #bitcoin, I've asked gribble. So if you sold 144,000 bitcoins, you'd get about $14 million USD and send the price of bitcoin to around $23/bitcoin.

Re:Worth $28 million? No. (2, Funny)

Anonymous Coward | about 10 months ago | (#45245703)

Because FBI thinks they seized 144000 BTC, not $28mln or $14mln. USD numbers are claimed as a fact by PR people and news outlets to make good headlines.

PS: It's spelt "incompetent", you moran.

Already sold (1)

dgenr8 (9462) | about 10 months ago | (#45245907)

Just like last time, the market moves over the last few days strongly suggest that the FBI is already selling, or has already sold these bitcoins into the market.

Please sell them (0)

Anonymous Coward | about 10 months ago | (#45245985)

Bitcoins are not for government, please sell them and collect your $28.5 million!

3 BTC community.

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