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Silk Road shutdown: how can the FBI seize Bitcoins?
- Aqueous 13y agoAnother question: According to reports Silk Road and DPR made $80 million in commissions. Yet the FBI has only told us about seizing $3.6 million in BitCoins. Where's the rest of the fortune?
- jws 13y agoWine, women, and song?
- sliverstorm 13y agoSupposedly DPR lived well within his means in modest accommodations.
- swamp40 13y agoWell, riddle me this: Why is the Cayman Islands, with a population of 56,000, the 5th largest financial center in the world?
- noonespecial 13y agoThat would be because they've managed to acquire somewhat of a reputation both for not handing over depositor's money to any and every government thug that waves some paper at them and for returning that money to said depositor on request. A tough reputation indeed to maintain on 21st century earth.
- jonknee 13y agoMost likely they are using the current value of BTC against the cumulative proceeds which vastly overstates revenue unless all funds were kept in BTC.
- anfedorov 13y agoThe article refers to a "26k BTC fortune", which was confiscated, while the complaint against Ross said the total SR commissions were 614,305 BTC (https://en.wikipedia.org/wiki/Silk_Road_(marketplace)#Site_statistics https://en.wikipedia.org/wiki/Silk_Road_(marketplace)#Site_s...).
- jonknee 13y agoExactly. That severely overstates the revenue taken in as SR was in business for quite some time before BTC was worth much. SR started in early 2011 when 1 BTC was worth less than $1. Hosting alone would have taken many tens of thousands of dollars a month a today's exchange rates.
- anfedorov 13y agoI'd wager Ross only kept enough coins accessible from the machine hosting SL for day-to-day operations, and sent the extra proceeds to an account the production machines didn't have access to, one with the private key either on his personal laptop or in a safety deposit box.
- Aqueous 13y agoMaybe he buried his BitCoin wallet in the desert.
- jlgreco 13y agoSo what we are saying here is that there might be actual modern burried pirate treasure somewhere. Awesome.
- Aqueous 13y agoWhat's unfortunate for DPR is that, even if there is a pirate's booty out there, the whole murder for hire thing and being an accessory, if not a patricipant, in a massive amount of drug trafficking makes it very likely that he will spend a large chunk, if not the rest of his life, in prison, making the 80 mil all but unusable to him.
- mkmkmmmmm 13y agohe can buy a lot of cigarettes
- olefoo 13y agoI would think he could get some very high quality legal representation w/ $80 million lurking out there. Although it might be complicated by the fact that he won't be allowed out on pre-trial release. And let's face it; he could very well be the fall guy for the originators of Silk Road and not the "real" Dread Pirate Roberts at all.
- beedogs 13y ago
- gesman 13y agoFBI was hoping you'd never ask!
- nyarlathotep 13y agoIt seems likely that the seized funds were taken from SR's escrow accounts. It matches up roughly with the amount of money said in the FBI complaint to be stored in escrow. I can only assume that they have no idea where his personal Bitcoin stash is, otherwise they would have hyped up seizing ~80mil.
- sliverstorm 13y agoIn the US, lawyers have argued that forcing someone to hand over their encryption keys violates the Fifth Amendment right to protection from self-incrimination. Is the implication supposed to be that seizure of Bitcoins is protected by the Fifth Amendment? That seems far-fetched.
- anologwintermut 13y agoTypically the 5th amendment argument applies to handing over passwords that are only in your head, not keys that are written down. The government can force you to turn over data you have. The case for not turning over passwords for bitcoin wallets is probably stronger than for true crypt volumes. If they arrest you with an encrypted volume on your laptop, they know its your's. The only question is what it is. In a lot of cases, the government knows what it is, they just need to be able to prove it. Courts call this a forgone conclusion and can compel you do use your decryption password( but not tell it to the cops).[0] On the other hand, handing over bitcoin keys maybe the only way they can learn which bitcoins are yours. This is,arguably, not a forgone conclusion at all. And again, you are not just giving them access to the data, you are effectively being compelled to testify that it is your data. [0]http://www.slate.com/articles/technology/future_tense/2012/03/encrypted_files_child_pornography_and_the_fifth_amendment_.html http://www.slate.com/articles/technology/future_tense/2012/0...
- sliverstorm 13y agohanding over bitcoin keys maybe the only way they can learn which bitcoins are yours Mmm, good point. Although considering bitcoin is a public network, they could have linked a certain address to you already, ala "follow the money"
- kevinpet 13y agoAnd the inquisitors may have already proven that you are a witch, so what's a little harm in torturing you to confess. They may have evidence that this is your wallet, but by supplying them with the password, you are testifying that it is your wallet. "An act is testimonial when the act entails implicit statements of fact, such as admitting that evidence exists, is authentic, or is within a suspect's control." "By entering the password Boucher would be disclosing the fact that he knows the password and has control over the files on drive Z." Compelling Ulbricht to unlock the wallet would be compelling him to testify that the wallet is his. You may think this is a silly chain of reasoning, but I'm sure you will forgive me if I will continue to side with existing federal precedent. http://www.volokh.com/files/Boucher.pdf http://www.volokh.com/files/Boucher.pdf
- jotm 13y agoCan't they just gain access to the account and call it a day? No need to transfer the funds elsewhere, really...
- ChrisClark 13y agoAnd then the owner can just have someone else transfer them to a different address. Suddenly they aren't seized any more. ;)
- A1kmm 13y agoIt would be difficult to be sure that there is only one person with the key. If the defendant has a co-collaborator who also has access to the keys and is outside the reach of the seizing authority (or unknown to them), they could just transfer the Bitcoins to another new address and out of seizure. The seizing authority in general has no way to tell in advance if such a co-collaborator exists, and assuming the transfer is to a new address with no historical transactions, it would be extremely difficult to identify who the collaborator was after the fact.
- maaku 13y agoWhat is this concept of a bitcoin "account" you speak of?
- deleted 13y ago[deleted]
- opminion 13y ago"Seizing" is: 1. Taking control of them 2. Removing control of them from anyone else The second point is specific to a digital asset which can be duplicated (in this case we are also talking about any passwords). Bitcoin, by definition, allows the second point, but requires a transaction. So the FBI should have made a transaction immediately (or have the means of invalidating any transaction of those bitcoin). This is novel and critical to the story, but the Guardian article seemed to tangentially miss it.
- agildehaus 13y agoHow are they identifying the owners of these hidden services? Are denial of service attacks the answer? DDOS a site and just ask popular hosting providers if they're experiencing any unusual traffic levels? Seems like such an attack always precedes a takedown.
- A1kmm 13y agoIf they have a near global view of the network, they can do traffic correlation without having to 'ask' hosting providers - and putting a large signal through would certainly help that traffic correlation to occur. It is possible that DDOS attacks are not actively initiated by the NSA, but that they greatly help them complete their traffic correlation analysis network to an acceptable level of certainty by lighting up the circuits from the rendezvous points to the hidden service.
- kevinpet 13y agoThat, or just look through old forum posts to see if the announcement of a bitcoin drug marketplace looking to hire php programmers was signed rossulbricht at gmail dot com.
- A1kmm 13y agoThat doesn't explain how they were able to find the server hosting the hidden service by July the 23rd. The complaint relies on a lot of circumstantial evidence to tie the server to the person, and that evidence wouldn't easily have allowed them to find the server (e.g. that someone accessed a VPN that in turn accessed the Silk Road server from an Internet cafe close to where Ross Ulbricht lived). If there is stronger evidence that they could have followed from the person to the server, they would probably have put that in the complaint as it would be more direct and therefore more incriminating. Therefore, it seems likely that they didn't find the server by following it from the person. There are several possibilities here: 1. Perhaps the NSA helped with finding the server by traffic analysis to follow the circuit back to the hidden service IP? 2. Perhaps the server was rented from / on the advice of an informant and setup only shortly before it was imaged. Reading between the lines, redandwhite was a law enforcement plant on Silk Road (possibly Canadian, given that is what the article claims) that DPR trusted to some extent and possibly took advice about how to get a host for the server. The complaint conceals where the server was found - perhaps for this reason. 3. Perhaps a foreign government surveillance programme routinely searches virtual servers, and this resulted in the server being found.
- panarky 13y agoAccording to blockchain.info [0] and Arstechnica [1], the seized SR bitcoins may be in address 1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX . [0] https://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX [1] http://arstechnica.com/tech-policy/2013/10/internet-lobs-insults-at-fbis-silk-road-bitcoin-wallet/