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As 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 citize

by cs702 13y ago

As 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 ago
Considering the entire point of bitcoin is circumventing seizure, that sounds like a bad thing to me.
- biomechanica 13y ago
  If 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 ago
  Well, 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 ago
    Sure, 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.
    - biomechanica 13y ago
      When there are laws that attempt to force people to do things they do not wish to do you get a push back - you get something like Bitcoin or Tor or I2P, etc. Law is always a step behind. What you see right now is Law trying to play catch up. However, it seems quite obvious that the people involved in creating Laws don't quite know exactly what Bitcoin is fully. We'll see a bunch of really dumb bills being introduced in retaliation then, like always, they will adapt slowly and find a way to take control. Bitcoin isn't exempt, you're right. Though, Bitcoin can be changed or something new will come out.
      - LatvjuAvs 13y ago
        Slavery - full sail on!
      - cube13 13y ago
        I don't see where this is a new rule. This is the exact same thing the DEA has done with large quantities of money or bank accounts. The US Government's response so far has been pretty good, actually. They're not making new rules for bitcoin. They're making it explicitly known that they're treating BTC like all other forms of money.
    - jrockway 13y ago
      Contempt of court is a trivial sentence compared to the sentences that you'd otherwise get for selling drugs and laundering money. It's not even clear that the government can compel you to give up something that only exists in your mind.
      - rdtsc 13y ago
        In some jurisdictions contempt of court has ended up being a virtually endless jail sentence. Even in civil cases on can be held indefinitely in jail until they comply with the court order. There was a case when one person was held this way for years because they wouldn't reveal where they put some large amount of money that their spouse was supposed to get after a divorce...or something of that sort, I believe it was in California. The point is sometimes contempt of court is not a whole lot different effectively than just a prison term.
  - eksith 13y ago
    There's something to this. It's entirely possible that the password is some randomly generated one that you wrote on a piece of paper taped under a desk somewhere. During the "raid" (I.E. your desperate attempt to set fire to your own property to destroy evidence), this password was lost. The court can't force you to hand over something you no longer have. Of course, the court also can't give you a polygraph test since it isn't admissible as evidence anyway. If the Bitcoins do get spent sometime later, you could argue someone likely bruteforced the passphrase (it was only 12 characters long). That's still reasonable doubt. Edit: After reading my own post, I'm quite terrified of my own imagination. I think you're a bad influence on me :(
    - anigbrowl 13y ago
      If the Bitcoins do get spent sometime later, you could argue someone likely bruteforced the passphrase (it was only 12 characters long). That's still reasonable doubt. Good luck arguing that that a password with 78-bit entropy (12 characters out of 95 in the ASCII set) was likely broken by brute force. 'Reasonable doubt' does not mean 'no matter how improbable,' otherwise nobody would ever get convicted.
      - eksith 13y ago
        Reasonable doubt means there is reasonable doubt. Or if you prefer metaphors, the term is naked. Doubt, that the progenitor of the pass phrase was likely the one who transferred the coins to another address(s) is sufficient to preclude it as a determining factor. That is, of course, if your lawyer is good enough to be persuasive. Meanwhile, people have been convicted with far more implausible evidence (eyewitness testimony comes to mind) so this will be the least of your worries.
        anigbrowl 13y ago
        Reasonable doubt means there is reasonable doubt. Wow. You've certainly persuaded me.
        13y ago
- tlrobinson 13y ago
  "the entire point of bitcoin is circumventing seizure" [citation needed] There are many reasons to want to use Bitcoin. Plus it is much more seizure resistant than centralized systems like banks.
  - SilasX 13y ago
    Well, I think there's a weaker, but still alarming claim to be defended here: that one reason is the ease of circumventing seizure; that that reason props up the value of BTC somewhat; and that that reason has become weaker, hurting its value, and possibly the network effects it needs to take off.
    - tlrobinson 13y ago
      This incident doesn't tell us anything new, unless the DEA seized these bitcoins by cracking ECDSA or wallet encryption, which is pretty unlikely.
  - sliverstorm 13y ago
    [citation needed] Yeah, the more I read about bitcoin in the media, the more I've decided people are projecting on the currency what they want it to be about. The entire point of Bitcoin is anonymity! The entire point of Bitcoin is to be able to do things that sound suspiciously like laundering money! The entire point of Bitcoin is to circumvent seizure! I just wonder what will be next on the list.
    - jaekwon 13y ago
      It is all of those things; different facets of the same gem.
      - TylerE 13y ago
        It is trivially proved to be non-anonymous. Pseudonymous, yes, but not anonymous.
    - rtpg 13y ago
- zanny 13y ago
  Password encrypt your wallet and nobody is cracking AES256 with a good passphrase any time soon unless they torture it out of you. And keep a backup copy hidden somewhere so that if they just take the wallet.dat file you have a clone.
noarchy 13y ago
This may have been a case of careless storage. It is easier to hide bitcoins from would-be thieves (DEA, in this case) than it would be to hide gold or cash.
- jmspring 13y ago
  Would be thieves? Buying from SilkRoad usually means illicit drug sales (good or bad, it's not legal). So, it makes perfect sense for govt agencies cracking down on such activities to seize what ever assets were used in said exchange -- cash, credit card, bit coins...
  - noarchy 13y ago
    >Would be thieves? Buying from SilkRoad usually means illicit drug sales (good or bad, it's not legal). So, it makes perfect sense for govt agencies cracking down on such activities to seize what ever assets were used in said exchange -- cash, credit card, bit coins... This assumes that you accept the premise that a government should be able to steal property, simply because it doesn't like certain kinds of transactions.
    - jmspring 13y ago
      Sorry, buying illicit drugs is a crime in this country, seizure of assets and materials used in the transaction is part of that. This part of the "war on drugs" I am ok with -- especially living in a community currently ravaged by meth ad heroin issues. That said, I'm not a fan of the general blanket seizure laws associated with the WoD.
      - Nursie 13y ago
        The WoD is very unlikely to be helping your community. In fact it's more likely diverting money that cold be used to actually help your community into futile enforcement efforts. That said I agree, this is not the government "stealing" because it's the proceeds of crime and subject to forfeit. The way to tackle the WoD is not just by hiding money and enabling drug dealers.
kinghajj 13y ago
Brainwallets cannot be seized, though they can make it exceedingly difficult to spend them in practice.
- w-ll 13y ago
  > they can make it exceedingly difficult to spend them in practice Not really. You can use services that just broadcast transactions. Blockchain.info has a service to do this, I'm sure there are a few other that exists.
fredBuddemeyer 13y ago
its a very bad thing that bitcoin is subject to government control. very quickly it will be used to tax and arm in order to .. tax and arm and its potential to break that loop will be lost.
- sliverstorm 13y ago
  How the hell does DEA seizure of bitcoins = government control of bitcoin?
  - bit_cromwell 13y ago
    Its very simple, if I can take your money without your consent I control it.
    - sliverstorm 13y ago
      I'm sorry, but that's bullshit. Control and being able to confiscate are hardly the same thing.
      - noarchy 13y ago
        Because if I can take from you without consequence, then that amounts to a great level of control. Normally if I take something of yours without your consent, I am a thief. If I do it at gunpoint, I'm an armed robber. Take away the veneer of legitimacy that many would grant to the DEA, and it, too, becomes a thief and/or armed robber.

by cs702 13y ago

nilved 13y ago

Considering the entire point of bitcoin is circumventing seizure, that sounds like a bad thing to me.

biomechanica 13y ago
If 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 ago
Well, 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 ago
  Sure, 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.
  - biomechanica 13y ago
    When there are laws that attempt to force people to do things they do not wish to do you get a push back - you get something like Bitcoin or Tor or I2P, etc. Law is always a step behind. What you see right now is Law trying to play catch up. However, it seems quite obvious that the people involved in creating Laws don't quite know exactly what Bitcoin is fully. We'll see a bunch of really dumb bills being introduced in retaliation then, like always, they will adapt slowly and find a way to take control. Bitcoin isn't exempt, you're right. Though, Bitcoin can be changed or something new will come out.
    - LatvjuAvs 13y ago
      Slavery - full sail on!
    - cube13 13y ago
      I don't see where this is a new rule. This is the exact same thing the DEA has done with large quantities of money or bank accounts. The US Government's response so far has been pretty good, actually. They're not making new rules for bitcoin. They're making it explicitly known that they're treating BTC like all other forms of money.
  - jrockway 13y ago
    Contempt of court is a trivial sentence compared to the sentences that you'd otherwise get for selling drugs and laundering money. It's not even clear that the government can compel you to give up something that only exists in your mind.
    - rdtsc 13y ago
      In some jurisdictions contempt of court has ended up being a virtually endless jail sentence. Even in civil cases on can be held indefinitely in jail until they comply with the court order. There was a case when one person was held this way for years because they wouldn't reveal where they put some large amount of money that their spouse was supposed to get after a divorce...or something of that sort, I believe it was in California. The point is sometimes contempt of court is not a whole lot different effectively than just a prison term.
- eksith 13y ago
  There's something to this. It's entirely possible that the password is some randomly generated one that you wrote on a piece of paper taped under a desk somewhere. During the "raid" (I.E. your desperate attempt to set fire to your own property to destroy evidence), this password was lost. The court can't force you to hand over something you no longer have. Of course, the court also can't give you a polygraph test since it isn't admissible as evidence anyway. If the Bitcoins do get spent sometime later, you could argue someone likely bruteforced the passphrase (it was only 12 characters long). That's still reasonable doubt. Edit: After reading my own post, I'm quite terrified of my own imagination. I think you're a bad influence on me :(
  - anigbrowl 13y ago
    If the Bitcoins do get spent sometime later, you could argue someone likely bruteforced the passphrase (it was only 12 characters long). That's still reasonable doubt. Good luck arguing that that a password with 78-bit entropy (12 characters out of 95 in the ASCII set) was likely broken by brute force. 'Reasonable doubt' does not mean 'no matter how improbable,' otherwise nobody would ever get convicted.
    - eksith 13y ago
      Reasonable doubt means there is reasonable doubt. Or if you prefer metaphors, the term is naked. Doubt, that the progenitor of the pass phrase was likely the one who transferred the coins to another address(s) is sufficient to preclude it as a determining factor. That is, of course, if your lawyer is good enough to be persuasive. Meanwhile, people have been convicted with far more implausible evidence (eyewitness testimony comes to mind) so this will be the least of your worries.
      - anigbrowl 13y ago
        Reasonable doubt means there is reasonable doubt. Wow. You've certainly persuaded me.
        13y ago
tlrobinson 13y ago
"the entire point of bitcoin is circumventing seizure" [citation needed] There are many reasons to want to use Bitcoin. Plus it is much more seizure resistant than centralized systems like banks.
- SilasX 13y ago
  Well, I think there's a weaker, but still alarming claim to be defended here: that one reason is the ease of circumventing seizure; that that reason props up the value of BTC somewhat; and that that reason has become weaker, hurting its value, and possibly the network effects it needs to take off.
  - tlrobinson 13y ago
    This incident doesn't tell us anything new, unless the DEA seized these bitcoins by cracking ECDSA or wallet encryption, which is pretty unlikely.
- sliverstorm 13y ago
  [citation needed] Yeah, the more I read about bitcoin in the media, the more I've decided people are projecting on the currency what they want it to be about. The entire point of Bitcoin is anonymity! The entire point of Bitcoin is to be able to do things that sound suspiciously like laundering money! The entire point of Bitcoin is to circumvent seizure! I just wonder what will be next on the list.
  - jaekwon 13y ago
    It is all of those things; different facets of the same gem.
    - TylerE 13y ago
      It is trivially proved to be non-anonymous. Pseudonymous, yes, but not anonymous.
  - rtpg 13y ago
zanny 13y ago
Password encrypt your wallet and nobody is cracking AES256 with a good passphrase any time soon unless they torture it out of you. And keep a backup copy hidden somewhere so that if they just take the wallet.dat file you have a clone.

noarchy 13y ago

This may have been a case of careless storage. It is easier to hide bitcoins from would-be thieves (DEA, in this case) than it would be to hide gold or cash.

jmspring 13y ago
Would be thieves? Buying from SilkRoad usually means illicit drug sales (good or bad, it's not legal). So, it makes perfect sense for govt agencies cracking down on such activities to seize what ever assets were used in said exchange -- cash, credit card, bit coins...
- noarchy 13y ago
  >Would be thieves? Buying from SilkRoad usually means illicit drug sales (good or bad, it's not legal). So, it makes perfect sense for govt agencies cracking down on such activities to seize what ever assets were used in said exchange -- cash, credit card, bit coins... This assumes that you accept the premise that a government should be able to steal property, simply because it doesn't like certain kinds of transactions.
  - jmspring 13y ago
    Sorry, buying illicit drugs is a crime in this country, seizure of assets and materials used in the transaction is part of that. This part of the "war on drugs" I am ok with -- especially living in a community currently ravaged by meth ad heroin issues. That said, I'm not a fan of the general blanket seizure laws associated with the WoD.
    - Nursie 13y ago
      The WoD is very unlikely to be helping your community. In fact it's more likely diverting money that cold be used to actually help your community into futile enforcement efforts. That said I agree, this is not the government "stealing" because it's the proceeds of crime and subject to forfeit. The way to tackle the WoD is not just by hiding money and enabling drug dealers.

kinghajj 13y ago

Brainwallets cannot be seized, though they can make it exceedingly difficult to spend them in practice.

w-ll 13y ago
> they can make it exceedingly difficult to spend them in practice Not really. You can use services that just broadcast transactions. Blockchain.info has a service to do this, I'm sure there are a few other that exists.

fredBuddemeyer 13y ago

its a very bad thing that bitcoin is subject to government control. very quickly it will be used to tax and arm in order to .. tax and arm and its potential to break that loop will be lost.

sliverstorm 13y ago
How the hell does DEA seizure of bitcoins = government control of bitcoin?
- bit_cromwell 13y ago
  Its very simple, if I can take your money without your consent I control it.
  - sliverstorm 13y ago
    I'm sorry, but that's bullshit. Control and being able to confiscate are hardly the same thing.
    - noarchy 13y ago
      Because if I can take from you without consequence, then that amounts to a great level of control. Normally if I take something of yours without your consent, I am a thief. If I do it at gunpoint, I'm an armed robber. Take away the veneer of legitimacy that many would grant to the DEA, and it, too, becomes a thief and/or armed robber.