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Bitcoins Seized by DEA
- teraflop 13y agoOne thing's for sure, it'll be interesting to follow the blockchain and see what eventually happens to that BTC. Does the government leave it in a wallet, or cash it out with Coinbase, or what?
- ferdo 13y agoThe coins appear to have moved a few times since the "seizure": https://blockchain.info/tx/ec3c6440a5302eade99c3be3dbe47524377779e009f632bd74f9ceee3df84c56 https://blockchain.info/tx/ec3c6440a5302eade99c3be3dbe475243...
- hackinthebochs 13y agoOf course they have to be moved to really be considered "seized", otherwise they just have a copy which can be invalidated before they control the value of the coins.
- _delirium 13y agoInteresting. I guess that means the DEA has some technology people who have been tasked with figuring out how Bitcoin works, sufficiently well to understand what it would mean to "seize" it and actually carry that out.
- dfc 13y agoThe only way that this would be "interesting" is if you started off with the assumption that everyone that works for the government is brain dead.
- mpyne 13y agoDoesn't everyone start with that assumption though?
- dfc 13y agoI hope not, it seems incredibly naive.
- mpyne 13y agoIt is, but the normal assumption I've always seen made of governments is that they are a collection of those who were too dumb to make it "in the real world". At least, until that assumption becomes inconvenient for whatever point the person was trying to make.
- dfc 13y agoDo you consider "wanting to give back" or "a commitment to service" or similar expressions of idealism a sign of complete stupidity?
- anigbrowl 13y agoI don't think mpyne considers people in government to be brain dead, but it's a popular stereotype here on HN - whenever people disapprove of some government policy they complain that government bureaucrats are too stupid to understand technology. See, for example, the Bitcoin foundation thread on the front page, or any court case whose outcome disappoints people.
- dfc 13y agoI am well aware of the naive sentiment that can be found on *any forum/list" (not just HN) regarding the "guberment." mpyne is on the mental list of usernames that triggers my "read this comment don't merely skim" reaction. If it was a comment by a username I did not recognize I probably would not have responded.
- bdcravens 13y agothe DEA has some technology people I'll step out on a limb and say that given their annual budget of almost $3B, they have a technology person or 2 on staff.
- jlgreco 13y agoOne of the neat things about bitcoin that hasn't been talked a lot about is that bitcoin makes it possible (with a little planning) to create seizure and "civil forfeiture" resistant money. This can be done if you want to save your money for later (perhaps for your defense, or for after your eventual release), or alternatively merely because you believe that civil forfeiture is unethical and dangerous to society as it accelerates the militarization of the police. Imagine a system where the private material of a wallet is shared among one or more trusted individuals (using secret sharing) who are under instructions to cooperate with each other in destroying or moving the money if you are ever arrested or fail to check in after a certain period of time. If your aim is to merely destroy the money, you could also get away with having a secret VPS running somewhere that does the deed (it would not matter if it were later found). If you go with the "destroy" route, then you would not even be destroying the evidence from an ethics standpoint (thanks to the nature of the blockchain). However the authorities, upon being denied their "prize", would undoubtedly throw a childish hissyfit and assert that you destroyed the evidence anyway.
- betterunix 13y ago"One of the neat things about bitcoin that hasn't been talked a lot about is that bitcoin makes it possible (with a little planning) to create seizure and "civil forfeiture" resistant money" Sounds like burying your cash on an island. I think you might be able to publish an exciting novel about this...
- anigbrowl 13y agoImagine a system where the private material of a wallet is shared among one or more trusted individuals (using secret sharing) who are under instructions to cooperate with each other in destroying or moving the money if you are ever arrested or fail to check in after a certain period of time. Don't you think that people involved in money-laundering already engage in such conspiracies? There's a reason they call it 'organized crime.'
- jlgreco 13y agoUh, yes? Of course? That seems obvious. I'm not sure what you are getting at here.
- MWil 13y agoAs a bar prepping J.D. at the moment, I just want to see how this plays out in a courtroom where the prosecution relies too heavily on bitcoins as their ID strategy. I'll totally let them try and explain this to a jury...
- gamblor956 13y agoProbably just as well as any other form of circumstantial technology-based ID: IOW, it depends on the expert witnesses and the presentation of other identifying evidence by the prosecution.
- Uperte 13y agoProbably honeypot operation. I wonder if DEA would auction those coins like all assets that get seized.
- gwern 13y agoNo, it was probably fallout from a controlled delivery or something. There have been multiple controlled deliveries in the past for SR users and so far zero honeypots or other fancy traps (see my collation of arrests/prosecutions in http://www.gwern.net/Silk%20Road#safe http://www.gwern.net/Silk%20Road#safe ).
- gwern 13y agoAlthough he is a vendor, so who knows: http://www.reddit.com/r/SilkRoad/comments/1gxiv7/srrelated_bitcoin_seizure/caoxlmg http://www.reddit.com/r/SilkRoad/comments/1gxiv7/srrelated_b...
- hawkharris 13y agoI have a layman's question about Bitcoin for people who know more about the currency: Who or what controls the overall monetary policy for Bitcoin? In other words, is there some sort of digital central bank that controls inflation by deciding how many Bitcoins are released per area?
- ojiikun 13y agoThere is no authority, just code. The algorithm essentially self-adjusts so that new coins are created at a globally steady rate, rewarding miners proportionate to their effort. (at least until all coins are mined) https://en.bitcoin.it/wiki/Difficulty https://en.bitcoin.it/wiki/Difficulty
- jared314 13y agoAlso, it is good to mention, that to change the code/algorithm would require replacing the code on the peers accounting for 50% of the network's hashing power.
- tlrobinson 13y agoIn theory it's actually the "economic majority" that matters: https://en.bitcoin.it/wiki/Economic_majority https://en.bitcoin.it/wiki/Economic_majority
- HarryHirsch 13y agoAnd in practice this majority is held by a dozen or so mining pools. This is the usual schizophreny in US politics making yet another appearance: because people do not trust public oversight in the elected government they hand over the oversight to unelected private entities. No central bank, it's mining pools instead. One would think that the leading figures of these pools know each other. One would think it's outside the realm of conspiracy to think that the designers of Bitcoin expected the mining pools to emerge once difficulty had grown sufficiently large.
- colanderman 13y agoUSER'S, not USERS'. Very meaningful difference here.
- ferdo 13y agoYou're correct. Thanks for catching it.
- mikemoka 13y agoThe coins of a specific user have been sized, why this sensationalistic title?
- Estragon 13y agoI understood exactly what had happened the moment I read the title. I don't think it was sensationalistic at all.
- mxxx 13y agolol, you interpreted it to mean that bitcoin itself had been seized? do you freak out and check your wallet when you read a headline that says "cash seized by authorities", too?
- fastball 13y agoWouldn't this being a "honeypot", as suggested in the article, be an instance of entrapment, which is illegal?
- nilved 13y agoNo, it's only entrapment if you wouldn't have commit the crime with someone else. Buying drugs from an undercover cop, which is basically what the OP describes, is not entrapment.
- pklingem 13y agoYou mean like: `honeypot = Entrapment.new`?
- EvilLook 13y agoNo. This would be a sting. Read this to find out what entrapment is (and isn't): http://thecriminallawyer.tumblr.com/post/19810672629/12-i-was-entrapped http://thecriminallawyer.tumblr.com/post/19810672629/12-i-wa...
- anigbrowl 13y agoNo. entrapment is where I work for the government and try to persuade you to commit a crime. If I merely present an opportunity to do so (eg leaving my car unlocked with an expensive item sitting on the back seat), that's perfectly cool, legally speaking.
- cs702 13y agoAs an early adopter of Bitcoin, I'm happy to see this, because it's a sign that Bitcoin is on the path to more mainstream US market adoption. As more US citizens get comfortable with and start using Bitcoin, US law-enforcement organizations gradually will learn to use it, gradually will learn to monitor its use by others, and, yes, gradually will learn to seize it whenever it's used for criminal activity.[1] This is not a bad thing. -- [1] Bitcoins can be seized -- just like cash, gold, a file stored in a hard drive, or any other physical or digital asset in a person's possession.
- nilved 13y agoConsidering the entire point of bitcoin is circumventing seizure, that sounds like a bad thing to me.
- biomechanica 13y agoIf people store their coins on a central server it can happen like any other data. Bitcoin, however, can be used without the use of a third party storing your coins.
- sneak 13y agoWell, if you generate a deterministic key based on a passphrase known only to you, and send the bitcoin to the corresponding public key, you can store bitcoin using ONLY YOUR MIND. Seize that.
- dlitz 13y agoSure, here's a court order compelling you to turn over N BTC by such-and-such a date, or you'll be held in contempt of court. I suppose you can file a motion to quash, but now you'll need to submit evidence that you no longer control those Bitcoins. Good luck. Maybe you'll say the passphrase was destroyed. You might be lying, but in any case, they're as good as seized, because if the Bitcoins are ever spent, we'll see it in the blockchain. And that's all assuming that the loss or destruction of the Bitcoins even matters to the court. Maybe the current USD value of N BTC is just added to your non-dischargeable debt. Bitcoins raise some interesting legal & law enforcement questions, but it's wrong to assume that they somehow exempt their users from the law, or prevent all enforcement of the law. People have been trying to bypass the law for millennia, and it rarely works: The law just isn't that fragile.
- bdcravens 13y agoSomeone buys drugs and gets caught, and has property seized. How audacious.
- gwern 13y agoIf anyone is curious, the guy seems to be the SR vendor 'Casey Jones' http://www.reddit.com/r/SilkRoad/comments/1gxiv7/srrelated_bitcoin_seizure/caoxlmg http://www.reddit.com/r/SilkRoad/comments/1gxiv7/srrelated_b...
- chmike 13y agoI have the impression that the possibility to track bitcoins history make it less anonymous than real money. There is a thin invisible string linking all bitcoin holders together and that can be followed. With honeypots, and help of NSA like methods it is possible to identify the people involved. As soon as bitcoins are used to buy goods to be delivered.
- greenlakejake 13y agoYellow letters on an orange background? Yuck.