5 ms·

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

by aqme28 6y ago

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.

RIMR 6y ago
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.
- xyst 6y ago
  whoever had it didn't have a "Marty Byrd" type person to launder the money. such a shame, could have done so much with that money in terms of humanitarian aspects.
- jaggirs 6y ago
  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.
  - Nemo_bis 6y ago
    Or you can just ask the feds to keep you in a witness protection program which treats you and your family like royalty for 50 years. I don't know if it exists, but it might. The USA government can easily launder 1 G$ in bitcoin and give you part of the profits; it's not clear who else could. The only alternative I can imagine is some giant money laundering scheme with some authoritarian state, probably involving the smuggling of oil, diamonds and/or weapons.
  - lolc 6y ago
    It was 70k illiquid Bitcoin. The dollar value was entirely virtual. What strikes me about these people is how they can't stop and cash out. They risk to lose their life to jail yet don't have an exit plan. They just continue gambling.
LiquidSky 6y ago
"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."
- tobyjsullivan 6y ago
  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?
  - colinmhayes 6y ago
    The wallet was completely illiquid. No market would accept coins that were linked to it. You could exchange small amounts(like thousands of dollars at most probably) with in person transactions but then the government would know where you were when they track down the person you sold to. And they really want those billion dollars. Plus there's a non zero chance that the person on the other side of the in person transaction is law enforcement.
  - fedreserved 6y ago
    Vincente Zambada was charged with trafficking more than a billion dollars' worth of cocaine and heroin. In a 2013 plea bargain deal which was made public by a U.S. District Court in 2014, Zambada admitted coordinating smuggling tons of cocaine and heroin with "El Chapo," Joaquín Guzmán Loera, and agreed to forfeit assets of $1.37 billion to the US government. The plea bargain resulted in a fine of $4 million and 15 years in prison. He is considered a top potential witness against "El Chapo
  - goldenchrome 6y ago

by aqme28 6y ago

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.

RIMR 6y ago

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.

xyst 6y ago
whoever had it didn't have a "Marty Byrd" type person to launder the money. such a shame, could have done so much with that money in terms of humanitarian aspects.
jaggirs 6y ago
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.
- Nemo_bis 6y ago
  Or you can just ask the feds to keep you in a witness protection program which treats you and your family like royalty for 50 years. I don't know if it exists, but it might. The USA government can easily launder 1 G$ in bitcoin and give you part of the profits; it's not clear who else could. The only alternative I can imagine is some giant money laundering scheme with some authoritarian state, probably involving the smuggling of oil, diamonds and/or weapons.
- lolc 6y ago
  It was 70k illiquid Bitcoin. The dollar value was entirely virtual. What strikes me about these people is how they can't stop and cash out. They risk to lose their life to jail yet don't have an exit plan. They just continue gambling.

LiquidSky 6y ago

"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."

tobyjsullivan 6y ago
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?
- colinmhayes 6y ago
  The wallet was completely illiquid. No market would accept coins that were linked to it. You could exchange small amounts(like thousands of dollars at most probably) with in person transactions but then the government would know where you were when they track down the person you sold to. And they really want those billion dollars. Plus there's a non zero chance that the person on the other side of the in person transaction is law enforcement.
- fedreserved 6y ago
  Vincente Zambada was charged with trafficking more than a billion dollars' worth of cocaine and heroin. In a 2013 plea bargain deal which was made public by a U.S. District Court in 2014, Zambada admitted coordinating smuggling tons of cocaine and heroin with "El Chapo," Joaquín Guzmán Loera, and agreed to forfeit assets of $1.37 billion to the US government. The plea bargain resulted in a fine of $4 million and 15 years in prison. He is considered a top potential witness against "El Chapo
- goldenchrome 6y ago