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It's an interesting question. In the more classic sense, what proceeds should be stripped if you get cash in exchange for drugs and use that cash to buy GME cal

It's an interesting question. In the more classic sense, what proceeds should be stripped if you get cash in exchange for drugs and use that cash to buy GME calls which skyrocket? On the one hand it's all "blood money" / tainted, but the actual proceeds at the time of the crime have a specific value.

collectedparts 5y ago
> “The lesson to be learned from this is to keep the value in bitcoin, that the profit from the crime should be 36 bitcoin, regardless of what value the bitcoin has at the time,” [the prosecutor] reportedly said. It sounds like the police tripped a loophole in law by liquidating some of the BTC. Sounds like if the police had HODL'd they'd have been fine defending it as just look, these were the assets he had, we seized them. But since they liquidated, the defense got to say, hey, you already got the full proceeds.
- thisiswater 5y ago
  My interpretation of the article is that the court recognized the proceeds in terms of Swedish Kroner at the time that the BTC were seized, so was unable to account for the increasing value of BTC in terms of Kroner - they had not legally seized ~$1.7m, they had legally seized $137,000, and so had to pay back the difference. From the article - "The lesson to be learned from this is to keep the value in bitcoin, that the profit from the crime should be 36 bitcoin, regardless of what value the bitcoin has at the time".
  - est31 5y ago
    In fact it makes it seem the fault of the prosecutor even and not the court. Quotes from the prosecutor from the Telegraph article. > "It has led to consequences I was not able to foresee at the time." > "I think we should probably invest in an internal education in the [prosecution] authority, as cryptocurrency will be a factor we'll be dealing with to a much greater extent than we are today. The more we increase the level of knowledge within the organization, the fewer mistakes we will make." I'm not familiar with the swedish legal system (and not a lawyer), but often you can only be convicted for things the prosecution requests/accuses you of. Otherwise you can't defend yourself in court. So the prosecution ordered the bitcoin to be seized as proceeds of the crime, but not in a correct way, so the court ruling contained the same wording that a specific value in swedish Kronen shall be seized. Had the prosecution demanded the seizure in terms of Bitcoin instead, the court would probably have approved it too. However, at this point it's too late to change the ruling. Courts exist to settle things, and one can't simply re-roll a prosecution case unless there were grave mistakes.
    - ClumsyPilot 5y ago
      I think you interpretation is accurate - the prosecution can decide if it's seizing assets or cash, either choice has consequences.
- deleted 5y ago
  [deleted]
- viceroyalbean 5y ago
  It's not that the police liquidated the BTC, it's that the argument that was made in court was for the current cash value of the BTC. Instead of arguing that the value of the crime was 36 bitcoin the prosecutor argued that if was $137000 which was equivalent at the time. One interesting consequence is that the drug dealer would have had to pay the difference if bitcoin had dropped in value instead of rising.
  - elcritch 5y ago
    As an American it's a bit surprising to me that Sweden actually follows the quaint notion of justice and rule of law. Sounds like they even require property taken to be specifically listed and related to a crime as proven in a court of law. In the US authorities would've likely been able to keep all the BTC, and also could've seized the drug dealers home and car if they had any. In Florida (and many other states) it was/is common practice that any excuse police made could be used to seize almost any of a person's property, essentially on the spot. Generally without even needing to arrest the person or charge them with a crime or get a warrant. Just based on "suspicion" on the cops behalf. Thank good Ole "rule of law" President Reagan and the war on drugs for that one. See: - https://cplaw-miami.com/police-seize-your-property-without-arrest/ https://cplaw-miami.com/police-seize-your-property-without-a... - https://www.vox.com/policy-and-politics/2017/12/1/16686014/phillip-parhamovich-civil-forfeiture https://www.vox.com/policy-and-politics/2017/12/1/16686014/p... - https://en.m.wikipedia.org/wiki/Comprehensive_Crime_Control_Act_of_1984 https://en.m.wikipedia.org/wiki/Comprehensive_Crime_Control_...
    - danuker 5y ago
      > Just based on "suspicion" on the cops behalf. It's fine, the dog jumped at the window of your stopped car. https://en.wikipedia.org/wiki/Detection_dog#Civil_rights https://en.wikipedia.org/wiki/Detection_dog#Civil_rights
  - zaarn 5y ago
    I don't think the dealer would have to pay the difference in value if it lost value. Otherwise, you'd have to pay for the loss in value of a seized car if it's sold only years later or the loss in value of gold bars seized if the market on those crashed in the meantime.
jsmeaton 5y ago
If you use the proceeds of crime to buy a house then can't that house be seized (jurisdictions probably have different rules, but..)? The house is then auctioned off. It's not valued at the time of arrest and any additional value returned to the person arrested. I don't understand why it could, or should, be any different for electronic stores of value (stock, options, crypto).
- Blikkentrekker 5y ago
  Simply because the legal paperwork listed the value in Swedish crowns rather than in bitcoins. As I understand this article, the same would have happened if the legal paperwork listed the value of the house in crowns, and then the housing market rose and the house tripled in value. The only unusual thing with Bitcoins, is that the value thereof has risen to quite extreme proportions.
  - jsmeaton 5y ago
    Oh, I understand why it's happened in this particular case. It's a loophole they'll be closing for sure. My comments were directed at the parent: > what proceeds should be stripped if you get cash in exchange for drugs and use that cash to buy GME calls which skyrocket? > but the actual proceeds at the time of the crime have a specific value The specific value at the time is, in nearly every other situation, irrelevant. The mistake was putting a claim to a monetary value of *asset* rather than the *asset* itself.
irjustin 5y ago
It sounds like in Sweden you can only strip the value of asset (value in Swedish Krona, I imagine) related to the crime directly not the asset class itself. A guess at why it's like that would be - people flow value of drugs/illicit goods, rarely holding the value for long. This means the prosecutor wants to set an amount for "all drug deals they can convict for" and then try to seize that value. Clearly before crypto the only thing that would wildly fluctuate vs the country's currency is stocks. No one's doing drug deals in stocks so the law was written in value. If they did seize things like stocks it's clear they had a process to sell the liquid asset (they tried to sell the BTC), but they couldn't get their ducks in order to sell it, haha. I'm sure there's going to be a change to the law to seize the asset as a whole instead of pegging it to some particular value.
- glenngillen 5y ago
  I guess the flip side to this has historically played in the favour of the authorities. Ill-gotten gains would be laundered through a casino where you’d turn it all over over the course of several hours playing a game with a low house edge. You’d lose a bit to the house, but now have some potential legitimacy to how you have the funds. I assume under this approach the authorities would have claimed the full amount you started with and not what you were now left with. Crypto just happens to have been a casino where people have been winning.
- yxhuvud 5y ago
  They can do either, but they have to actually decide what they do. In this partivular case their was no established best practise of how to do, and the choice that was made backfired. They will alter their behaviour.
vmception 5y ago
Is it an interesting question? That prosecutor’s department in that country booked the value in fiat at the time and didn't have a mechanism for booking the value in the asset. People have been saying they have their own nexus currencies for the whole last decade, and others spent too much time ignoring that in. Now it bit Sweden in the ass, for now.
- fastball 5y ago
  It's interesting (to me), because of the whole idea that crypto are in fact cryptocurrencies. So unlike buying a house or buying stock options, the argument can be made that the crypto is itself the medium of exchange and therefore the value in fiat is irrelevant. But this also means that if the crypto drops in price while the cops are HODLing it, they lose out.
  - vmception 5y ago
    agreed on that point my question is whether we should consider these crypto clean, or whether we should stop trying to determine if crypto provenance is clean or not as it doesn't seem possible to rely on the due process of every municipality worldwide, unless the state is deemed as the crypto washer - magically cleaning all crypto as it temporarily seizes and auctions them or returns them - in which case a state will take advantage of that
  - ClumsyPilot 5y ago
    The idea is to take away oroceeds of crime, not to make bank
    - vmception 5y ago
      Tell that to every municipality in the US over the last 20 years

collectedparts 5y ago

> “The lesson to be learned from this is to keep the value in bitcoin, that the profit from the crime should be 36 bitcoin, regardless of what value the bitcoin has at the time,” [the prosecutor] reportedly said. It sounds like the police tripped a loophole in law by liquidating some of the BTC. Sounds like if the police had HODL'd they'd have been fine defending it as just look, these were the assets he had, we seized them. But since they liquidated, the defense got to say, hey, you already got the full proceeds.

thisiswater 5y ago
My interpretation of the article is that the court recognized the proceeds in terms of Swedish Kroner at the time that the BTC were seized, so was unable to account for the increasing value of BTC in terms of Kroner - they had not legally seized ~$1.7m, they had legally seized $137,000, and so had to pay back the difference. From the article - "The lesson to be learned from this is to keep the value in bitcoin, that the profit from the crime should be 36 bitcoin, regardless of what value the bitcoin has at the time".
- est31 5y ago
  In fact it makes it seem the fault of the prosecutor even and not the court. Quotes from the prosecutor from the Telegraph article. > "It has led to consequences I was not able to foresee at the time." > "I think we should probably invest in an internal education in the [prosecution] authority, as cryptocurrency will be a factor we'll be dealing with to a much greater extent than we are today. The more we increase the level of knowledge within the organization, the fewer mistakes we will make." I'm not familiar with the swedish legal system (and not a lawyer), but often you can only be convicted for things the prosecution requests/accuses you of. Otherwise you can't defend yourself in court. So the prosecution ordered the bitcoin to be seized as proceeds of the crime, but not in a correct way, so the court ruling contained the same wording that a specific value in swedish Kronen shall be seized. Had the prosecution demanded the seizure in terms of Bitcoin instead, the court would probably have approved it too. However, at this point it's too late to change the ruling. Courts exist to settle things, and one can't simply re-roll a prosecution case unless there were grave mistakes.
  - ClumsyPilot 5y ago
    I think you interpretation is accurate - the prosecution can decide if it's seizing assets or cash, either choice has consequences.
deleted 5y ago
[deleted]
viceroyalbean 5y ago
It's not that the police liquidated the BTC, it's that the argument that was made in court was for the current cash value of the BTC. Instead of arguing that the value of the crime was 36 bitcoin the prosecutor argued that if was $137000 which was equivalent at the time. One interesting consequence is that the drug dealer would have had to pay the difference if bitcoin had dropped in value instead of rising.
- elcritch 5y ago
  As an American it's a bit surprising to me that Sweden actually follows the quaint notion of justice and rule of law. Sounds like they even require property taken to be specifically listed and related to a crime as proven in a court of law. In the US authorities would've likely been able to keep all the BTC, and also could've seized the drug dealers home and car if they had any. In Florida (and many other states) it was/is common practice that any excuse police made could be used to seize almost any of a person's property, essentially on the spot. Generally without even needing to arrest the person or charge them with a crime or get a warrant. Just based on "suspicion" on the cops behalf. Thank good Ole "rule of law" President Reagan and the war on drugs for that one. See: - https://cplaw-miami.com/police-seize-your-property-without-arrest/ https://cplaw-miami.com/police-seize-your-property-without-a... - https://www.vox.com/policy-and-politics/2017/12/1/16686014/phillip-parhamovich-civil-forfeiture https://www.vox.com/policy-and-politics/2017/12/1/16686014/p... - https://en.m.wikipedia.org/wiki/Comprehensive_Crime_Control_Act_of_1984 https://en.m.wikipedia.org/wiki/Comprehensive_Crime_Control_...
  - danuker 5y ago
    > Just based on "suspicion" on the cops behalf. It's fine, the dog jumped at the window of your stopped car. https://en.wikipedia.org/wiki/Detection_dog#Civil_rights https://en.wikipedia.org/wiki/Detection_dog#Civil_rights
- zaarn 5y ago
  I don't think the dealer would have to pay the difference in value if it lost value. Otherwise, you'd have to pay for the loss in value of a seized car if it's sold only years later or the loss in value of gold bars seized if the market on those crashed in the meantime.

jsmeaton 5y ago

If you use the proceeds of crime to buy a house then can't that house be seized (jurisdictions probably have different rules, but..)? The house is then auctioned off. It's not valued at the time of arrest and any additional value returned to the person arrested. I don't understand why it could, or should, be any different for electronic stores of value (stock, options, crypto).

Blikkentrekker 5y ago
Simply because the legal paperwork listed the value in Swedish crowns rather than in bitcoins. As I understand this article, the same would have happened if the legal paperwork listed the value of the house in crowns, and then the housing market rose and the house tripled in value. The only unusual thing with Bitcoins, is that the value thereof has risen to quite extreme proportions.
- jsmeaton 5y ago
  Oh, I understand why it's happened in this particular case. It's a loophole they'll be closing for sure. My comments were directed at the parent: > what proceeds should be stripped if you get cash in exchange for drugs and use that cash to buy GME calls which skyrocket? > but the actual proceeds at the time of the crime have a specific value The specific value at the time is, in nearly every other situation, irrelevant. The mistake was putting a claim to a monetary value of *asset* rather than the *asset* itself.

irjustin 5y ago

It sounds like in Sweden you can only strip the value of asset (value in Swedish Krona, I imagine) related to the crime directly not the asset class itself. A guess at why it's like that would be - people flow value of drugs/illicit goods, rarely holding the value for long. This means the prosecutor wants to set an amount for "all drug deals they can convict for" and then try to seize that value. Clearly before crypto the only thing that would wildly fluctuate vs the country's currency is stocks. No one's doing drug deals in stocks so the law was written in value. If they did seize things like stocks it's clear they had a process to sell the liquid asset (they tried to sell the BTC), but they couldn't get their ducks in order to sell it, haha. I'm sure there's going to be a change to the law to seize the asset as a whole instead of pegging it to some particular value.

glenngillen 5y ago
I guess the flip side to this has historically played in the favour of the authorities. Ill-gotten gains would be laundered through a casino where you’d turn it all over over the course of several hours playing a game with a low house edge. You’d lose a bit to the house, but now have some potential legitimacy to how you have the funds. I assume under this approach the authorities would have claimed the full amount you started with and not what you were now left with. Crypto just happens to have been a casino where people have been winning.
yxhuvud 5y ago
They can do either, but they have to actually decide what they do. In this partivular case their was no established best practise of how to do, and the choice that was made backfired. They will alter their behaviour.

vmception 5y ago

Is it an interesting question? That prosecutor’s department in that country booked the value in fiat at the time and didn't have a mechanism for booking the value in the asset. People have been saying they have their own nexus currencies for the whole last decade, and others spent too much time ignoring that in. Now it bit Sweden in the ass, for now.

fastball 5y ago
It's interesting (to me), because of the whole idea that crypto are in fact cryptocurrencies. So unlike buying a house or buying stock options, the argument can be made that the crypto is itself the medium of exchange and therefore the value in fiat is irrelevant. But this also means that if the crypto drops in price while the cops are HODLing it, they lose out.
- vmception 5y ago
  agreed on that point my question is whether we should consider these crypto clean, or whether we should stop trying to determine if crypto provenance is clean or not as it doesn't seem possible to rely on the due process of every municipality worldwide, unless the state is deemed as the crypto washer - magically cleaning all crypto as it temporarily seizes and auctions them or returns them - in which case a state will take advantage of that
- ClumsyPilot 5y ago
  The idea is to take away oroceeds of crime, not to make bank
  - vmception 5y ago
    Tell that to every municipality in the US over the last 20 years