10 ms·

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

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.

nannal 6y ago
> Can the same be done with bitcoin? No, they don't have the keys, they can't sign a message as you.
klodolph 6y ago
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 differences seem a bit superficial to me.
- doggosphere 6y ago
  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.
  - klodolph 6y ago
    > 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.
    - doggosphere 6y ago
      How do you surrender assets you don't have control over? I'm merely pointing out that the differences are not superficial.
      - NationalPark 6y ago
        The point is that the judge won't say, "Aha! You got me!", the judge will say, "Cute trick, now back to jail."
        doggosphere 6y ago
        What grounds does a judge have to send the person to jail if they complied with the order to decrypt a wallet? There can be any number of reasons the coin was moved: - hacked by some 3rd party - corruption by officers (https://news.bitcoin.com/rogue-silk-road-agent-admits-to-stealing-bitcoins-seized-by-u-s-marshals/ https://news.bitcoin.com/rogue-silk-road-agent-admits-to-ste...) - partner in crime moved them, with or without consent from suspect.
        thinkloop 6y ago
        That seems fishy tho, you'll probably have to prove that, one of the core pruposes of judges is choosing who to believe, there is no such thing as a 100% fact.
        doggosphere 6y ago
        The burden of proof falls on the prosecution to prove beyond a reasonable doubt. Ex: Being in the vicinity of a crime when it takes place may make you a suspect (aka "fishy"), but this alone is not enough to prove guilt.
        listenallyall 6y ago
        Buddy there are plenty of people in jail right now based on extremely flimsy evidence such as simply being in the vicinity of a crime. All your comments in the thread are about "proving it," when, at the end of the day, it's up to 12 people in a box, most of whom don't know the first thing about bitcoin. Refusal to decrypt, wife moving Russia, etc... The government is going to make an extremely convincing case, with plenty of witnesses and all the time and money and lawyers they need. Meanwhile you'll be communicating with your defense lawyers from behind bars. You might be right -- maybe they can't prove any ill-intent -- but that's not a gamble with the odds in your favor.
- alasdair_ 6y ago
  >"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.
  - klodolph 6y ago
    You can fantasize about this James Bond stuff all you like, but one schmuck with a Bitcoin wallet probably is not going to pull it off. Bribing people isn’t so easy and reliable that you can wave a fat stack of cash in someone’s face and expect them to take it. People have lives and their careers tied up in their jobs and know that accepting a bribe isn’t a sure thing. It depends on where you live, sure. But in the US, there’s a fair bit of resistance to bribery.
    - LeifCarrotson 6y ago
      Covert bribery is definitely frowned upon. Overt bribery - hiring lobbyists, event sponsorships, regulatory capture, etc - is very popular, I'd even say it's more so than in other countries.
      - CydeWeys 6y ago
        Do you really think that someone with $1B of Bitcoin could buy their way out of the kinds of serious felony criminal charges mentioned in the linked article through campaign contributions and similar? I doubt it.
        strgcmc 6y ago
        IMO the short answer is, yes pardons can seemingly be bought in the Trumpian era of American politics. Whether $1B is enough, I don't necessarily know, but I don't see why the likelihood is something to dismiss out of hand.
- shiftpgdn 6y ago
  I thought there was a constitutional ruling that you can not be compelled to remember passwords. Couldn't you just say "I forgot the key?"
  - Traster 6y ago
    You could say it, but that doesn't make it compelling testimomy.
  - ChrisLomont 6y ago
    States and even Federal courts have ruled in different directions, so this currently depends on where you are charged. Some cases have put people in jail a long time for contempt when they refused to hand over passwords. https://www.post-gazette.com/opinion/editorials/2020/07/01/Law-enforcement-phone-unlock-Fifth-Amendment-Supreme-Court/stories/202007030004 https://www.post-gazette.com/opinion/editorials/2020/07/01/L...
- lmkg 6y ago
  If the money is in your bitcoin wallet, then the government has the same access to it as if the money were paper dollars hidden under your mattress. Coercion is available, but they cannot take it directly. If your money is in a (regulated) bitcoin exchange, then the government has more-or-less the same access to it as if it were in a bank. The serve a court order to the third party you have entrusted with your money, and the third party complies, without your direct involvement. Many of the arguments about bitcoin involve comparing apples to oranges. Bitcoin is a currency, its direct comparison is dollar bills, but most of the problems that it purports to solve are aspects of banks not dollars. There is some argument to be made that you can do more with Bitcoins without involving a bank, but I see a lot of people putting Bitcoins in banks (or exchanges or other regulatable third parties), and a comparison of Bitcoin + surrounding financial institutions vs Dollars + surrounding financial institutions is not as favorable to Bitcoin.
- bloak 6y ago
  I don't believe that in most sane juridictions a court would keep a suspect in prison indefinitely when the suspect claims to have forgotten the passphrase for a bitcoin wallet. I think the court would have to find the suspect guilty and sentence them to an appropriate custodial sentence (which in my personal opinion would be no longer than what they'd get for deliberately forgetting the passphrase). The only incentive for the suspect to remember the passphrase after being sentenced would be earlier parole. If the suspect tried to use the bitcoins after being released then another charge could perhaps be brought for perjury. None of this is specific to bitcoins or totally new. It's roughly the same situation as when the court thinks that the accused knows where the stolen money is hidden, but the accused claims not to know. Courts must have dealt with hundreds of cases like that, so we could look up somewhere how they handle it in different jurisdictions, if we really wanted to know. I'm curious about it, but perhaps not that curious.
  - sneak 6y ago
    > I don't believe that in most sane juridictions a court would keep a suspect in prison indefinitely when the suspect claims to have forgotten the passphrase for a bitcoin wallet. I think you overestimate the sanity of jurisdictions. See RIPA for example: https://en.wikipedia.org/wiki/Right_to_silence_in_England_and_Wales#Exceptions https://en.wikipedia.org/wiki/Right_to_silence_in_England_an...
LiquidSky 6y ago
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 tried to keep your Bitcoin stash secret from the IRS to hide your money, you'd be looking at very serious criminal penalties, not to mention you could never touch your stash again if the IRS is coming after you without them immediately seeing you actually do have extra funds. Stop treating this as some abstract technical problem that ignores real-world consequences.
- alasdair_ 6y ago
  >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?
  - jacques_chester 6y ago
    If it's at an overseas brokerage, you'll need to report make FinCEN report each year.
kridsdale1 6y ago
https://xkcd.com/538/ https://xkcd.com/538/
overkalix 6y ago
PPPSS. (Previous Poster's Point Still Stands). You could have cash buried in the desert and the IRS wouldn't be able to take it. Bitcoin is a way with both advantages and disadvantages to hide money, but it doesn't teleport you to another plane of reality where you're immune to the violence of the state.
- at-fates-hands 6y ago
  That's happened in several high profile bank robberies. In one robbery (I think it was a robbery on a airport hanger where they robbed an armored car company) they guys went to jail and they have some $18 million or so split between four dudes. Even after trial, conviction and sentencing, the court reporter said the Feds still weren't able to recover around $5 million of the total money and have no idea what happened to it.
at-fates-hands 6y ago
Her's some actual legal information about the seizing of BTC by the FBI: In June 2014, the United Nations Office on Drugs and Crime (‘UNODC’) published a ‘Basic Manual on the Detection and Investigation of the Laundering of Crime Proceeds Using Virtual Currencies’ (hereinafter ‘Manual’) providing a guide as to how the Bitcoin can be located and seized. The advantage of locating and seizing the Bitcoin wallet is that the potential complex jurisdictional issues that the use of virtual currencies creates, (as it operates in the online environment that blurs the national borders) can be avoided. The physical location of the instrument containing the Bitcoin wallet will in most cases be considered as the rightful jurisdiction for the purposes of freezing, seizure and confiscation. Despite the technological difficulty in the early detection of illegitimate use of Bitcoins, it is nevertheless possible although difficult for Bitcoins to be seized as proceeds of crime. The most effective way law enforcement authorities can seize Bitcoins is by obtaining the private keys which are linked to the Bitcoins or physically confiscating the ‘Bitcoin wallet’. Essentially once they have court approval and know where the wallet is - hard drive, USB drive, digital wallet. They will confiscate the wallet (similar to physical property seizures from a drug dealer) then just transfer the BTC to an account or wallet they control. The above article is from Australia, but the manual is used internationally so I'm assuming it would be the same for the US: https://www.lexology.com/library/detail.aspx?g=40d618a0-89e0-4920-9826-60e4c72af103 https://www.lexology.com/library/detail.aspx?g=40d618a0-89e0...
- vmception 6y ago
  > The above article is from Australia, but the manual is used internationally so I'm assuming it would be the same for the US: As with all legal topics, not a good assumption. > Essentially once they have court approval and know where the wallet is - hard drive, USB drive, digital wallet. They will confiscate the wallet (similar to physical property seizures from a drug dealer) then just transfer the BTC to an account or wallet they control. You know this requires them having access to the private key. There is no "just transfer the BTC", there isn't even a guarantee that they are the only custodians of it as the wallet itself can be replicated and the "physical location" being in many places at once. There is no way of disproving that, only assuming based on most people's poor operational security.

nannal 6y ago

> Can the same be done with bitcoin? No, they don't have the keys, they can't sign a message as you.

klodolph 6y ago

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 differences seem a bit superficial to me.

doggosphere 6y ago
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.
- klodolph 6y ago
  > 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.
  - doggosphere 6y ago
    How do you surrender assets you don't have control over? I'm merely pointing out that the differences are not superficial.
    - NationalPark 6y ago
      The point is that the judge won't say, "Aha! You got me!", the judge will say, "Cute trick, now back to jail."
      - doggosphere 6y ago
        What grounds does a judge have to send the person to jail if they complied with the order to decrypt a wallet? There can be any number of reasons the coin was moved: - hacked by some 3rd party - corruption by officers (https://news.bitcoin.com/rogue-silk-road-agent-admits-to-stealing-bitcoins-seized-by-u-s-marshals/ https://news.bitcoin.com/rogue-silk-road-agent-admits-to-ste...) - partner in crime moved them, with or without consent from suspect.
        thinkloop 6y ago
        That seems fishy tho, you'll probably have to prove that, one of the core pruposes of judges is choosing who to believe, there is no such thing as a 100% fact.
        doggosphere 6y ago
        The burden of proof falls on the prosecution to prove beyond a reasonable doubt. Ex: Being in the vicinity of a crime when it takes place may make you a suspect (aka "fishy"), but this alone is not enough to prove guilt.
        listenallyall 6y ago
        Buddy there are plenty of people in jail right now based on extremely flimsy evidence such as simply being in the vicinity of a crime. All your comments in the thread are about "proving it," when, at the end of the day, it's up to 12 people in a box, most of whom don't know the first thing about bitcoin. Refusal to decrypt, wife moving Russia, etc... The government is going to make an extremely convincing case, with plenty of witnesses and all the time and money and lawyers they need. Meanwhile you'll be communicating with your defense lawyers from behind bars. You might be right -- maybe they can't prove any ill-intent -- but that's not a gamble with the odds in your favor.
alasdair_ 6y ago
>"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.
- klodolph 6y ago
  You can fantasize about this James Bond stuff all you like, but one schmuck with a Bitcoin wallet probably is not going to pull it off. Bribing people isn’t so easy and reliable that you can wave a fat stack of cash in someone’s face and expect them to take it. People have lives and their careers tied up in their jobs and know that accepting a bribe isn’t a sure thing. It depends on where you live, sure. But in the US, there’s a fair bit of resistance to bribery.
  - LeifCarrotson 6y ago
    Covert bribery is definitely frowned upon. Overt bribery - hiring lobbyists, event sponsorships, regulatory capture, etc - is very popular, I'd even say it's more so than in other countries.
    - CydeWeys 6y ago
      Do you really think that someone with $1B of Bitcoin could buy their way out of the kinds of serious felony criminal charges mentioned in the linked article through campaign contributions and similar? I doubt it.
      - strgcmc 6y ago
        IMO the short answer is, yes pardons can seemingly be bought in the Trumpian era of American politics. Whether $1B is enough, I don't necessarily know, but I don't see why the likelihood is something to dismiss out of hand.
shiftpgdn 6y ago
I thought there was a constitutional ruling that you can not be compelled to remember passwords. Couldn't you just say "I forgot the key?"
- Traster 6y ago
  You could say it, but that doesn't make it compelling testimomy.
- ChrisLomont 6y ago
  States and even Federal courts have ruled in different directions, so this currently depends on where you are charged. Some cases have put people in jail a long time for contempt when they refused to hand over passwords. https://www.post-gazette.com/opinion/editorials/2020/07/01/Law-enforcement-phone-unlock-Fifth-Amendment-Supreme-Court/stories/202007030004 https://www.post-gazette.com/opinion/editorials/2020/07/01/L...
lmkg 6y ago
If the money is in your bitcoin wallet, then the government has the same access to it as if the money were paper dollars hidden under your mattress. Coercion is available, but they cannot take it directly. If your money is in a (regulated) bitcoin exchange, then the government has more-or-less the same access to it as if it were in a bank. The serve a court order to the third party you have entrusted with your money, and the third party complies, without your direct involvement. Many of the arguments about bitcoin involve comparing apples to oranges. Bitcoin is a currency, its direct comparison is dollar bills, but most of the problems that it purports to solve are aspects of banks not dollars. There is some argument to be made that you can do more with Bitcoins without involving a bank, but I see a lot of people putting Bitcoins in banks (or exchanges or other regulatable third parties), and a comparison of Bitcoin + surrounding financial institutions vs Dollars + surrounding financial institutions is not as favorable to Bitcoin.
bloak 6y ago
I don't believe that in most sane juridictions a court would keep a suspect in prison indefinitely when the suspect claims to have forgotten the passphrase for a bitcoin wallet. I think the court would have to find the suspect guilty and sentence them to an appropriate custodial sentence (which in my personal opinion would be no longer than what they'd get for deliberately forgetting the passphrase). The only incentive for the suspect to remember the passphrase after being sentenced would be earlier parole. If the suspect tried to use the bitcoins after being released then another charge could perhaps be brought for perjury. None of this is specific to bitcoins or totally new. It's roughly the same situation as when the court thinks that the accused knows where the stolen money is hidden, but the accused claims not to know. Courts must have dealt with hundreds of cases like that, so we could look up somewhere how they handle it in different jurisdictions, if we really wanted to know. I'm curious about it, but perhaps not that curious.
- sneak 6y ago
  > I don't believe that in most sane juridictions a court would keep a suspect in prison indefinitely when the suspect claims to have forgotten the passphrase for a bitcoin wallet. I think you overestimate the sanity of jurisdictions. See RIPA for example: https://en.wikipedia.org/wiki/Right_to_silence_in_England_and_Wales#Exceptions https://en.wikipedia.org/wiki/Right_to_silence_in_England_an...

LiquidSky 6y ago

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 tried to keep your Bitcoin stash secret from the IRS to hide your money, you'd be looking at very serious criminal penalties, not to mention you could never touch your stash again if the IRS is coming after you without them immediately seeing you actually do have extra funds. Stop treating this as some abstract technical problem that ignores real-world consequences.

alasdair_ 6y ago
>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?
- jacques_chester 6y ago
  If it's at an overseas brokerage, you'll need to report make FinCEN report each year.

kridsdale1 6y ago

https://xkcd.com/538/ https://xkcd.com/538/

overkalix 6y ago

PPPSS. (Previous Poster's Point Still Stands). You could have cash buried in the desert and the IRS wouldn't be able to take it. Bitcoin is a way with both advantages and disadvantages to hide money, but it doesn't teleport you to another plane of reality where you're immune to the violence of the state.

at-fates-hands 6y ago
That's happened in several high profile bank robberies. In one robbery (I think it was a robbery on a airport hanger where they robbed an armored car company) they guys went to jail and they have some $18 million or so split between four dudes. Even after trial, conviction and sentencing, the court reporter said the Feds still weren't able to recover around $5 million of the total money and have no idea what happened to it.

at-fates-hands 6y ago

Her's some actual legal information about the seizing of BTC by the FBI: In June 2014, the United Nations Office on Drugs and Crime (‘UNODC’) published a ‘Basic Manual on the Detection and Investigation of the Laundering of Crime Proceeds Using Virtual Currencies’ (hereinafter ‘Manual’) providing a guide as to how the Bitcoin can be located and seized. The advantage of locating and seizing the Bitcoin wallet is that the potential complex jurisdictional issues that the use of virtual currencies creates, (as it operates in the online environment that blurs the national borders) can be avoided. The physical location of the instrument containing the Bitcoin wallet will in most cases be considered as the rightful jurisdiction for the purposes of freezing, seizure and confiscation. Despite the technological difficulty in the early detection of illegitimate use of Bitcoins, it is nevertheless possible although difficult for Bitcoins to be seized as proceeds of crime. The most effective way law enforcement authorities can seize Bitcoins is by obtaining the private keys which are linked to the Bitcoins or physically confiscating the ‘Bitcoin wallet’. Essentially once they have court approval and know where the wallet is - hard drive, USB drive, digital wallet. They will confiscate the wallet (similar to physical property seizures from a drug dealer) then just transfer the BTC to an account or wallet they control. The above article is from Australia, but the manual is used internationally so I'm assuming it would be the same for the US: https://www.lexology.com/library/detail.aspx?g=40d618a0-89e0-4920-9826-60e4c72af103 https://www.lexology.com/library/detail.aspx?g=40d618a0-89e0...

vmception 6y ago
> The above article is from Australia, but the manual is used internationally so I'm assuming it would be the same for the US: As with all legal topics, not a good assumption. > Essentially once they have court approval and know where the wallet is - hard drive, USB drive, digital wallet. They will confiscate the wallet (similar to physical property seizures from a drug dealer) then just transfer the BTC to an account or wallet they control. You know this requires them having access to the private key. There is no "just transfer the BTC", there isn't even a guarantee that they are the only custodians of it as the wallet itself can be replicated and the "physical location" being in many places at once. There is no way of disproving that, only assuming based on most people's poor operational security.