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FBI Says It's Seized $28.5 Million in Bitcoins From Ross Ulbricht
- deleted 13y ago[deleted]
- gtrubetskoy 13y agoReally curious what FBI will do with the BTC they now have. Sell it for USD? Devise a government process for storing seized Bitcoin?
- MPetitt 13y agoPossibly use them in sting operations of more underground sites like the silk road. Obviously as we've seen they are still going after dealers, hitmen, CP and this would be a large enough fund of coins to do that from. The only issue I see is how they would tumble and transfer them without everyone watching for transactions out of the main account.
- dmix 13y agoYep these will be watched as closely as Sathoshi's (alleged) coins.
- sillysaurus2 13y ago... which will be completely useless if they use a tumbler. It's only a matter of time before feds become skilled techies. If they currently have anyone remotely capable on their staff -- and let me remind you, they somehow managed to acquire server images of Silk Road even though it was operating as a Tor hidden service, so apparently they do -- then those technically-capable staff members will strongly advise them to tumble those coins.
- MPetitt 13y agoWhich service will tumble 32 million worth of coins? And if they do them per bust then people will still see a transaction of x amount leaving their wallet.
- dmix 13y agoExactly, regardless if they tumble it, they still have to tumble it. Which creates plenty of technical and legal challenges. I personally doubt they would essentially launder their own seized money for future operations.
- wcfields 13y agoThey aren't going to tumble all 32 million. Even 10k-20k USD worth of coins is enough to work with for most criminal cases.
- Tuna-Fish 13y agoThe same that they do with all things they seize. It will be held for some time and then auctioned off.
- scott_karana 13y agoI think you're right. It would take time and effort (and cash) on their part to anonymize these bitcoins, so I suspect they'll sell them at a slightly discount. I'm sure plenty of people would buy 10%-off FBI bitcoins.
- russell_h 13y agoI assume that most exchanges involving bitcoins are purely speculative. Given that, I don't see most buyers caring (or even knowing) whether they have an "FBI bitcoin".
- bithive123 13y agoThey should securely erase the private keys and sell the seized equipment at auction.
- VMG 13y agoLink to the purported address: https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN4... I'm not sure you can call it "seized" if the balance hasn't moved to a different address, which would be proof that they have ownership. Until then they can claim they have found the money.
- panarky 13y agoThe bitcoins were moved to this address today, October 25. This is likely an address controlled by the FBI.
- aredington 13y agoAs I read the article, the address is owned by DPR and the FBI seized the associated wallet.
- gojomo 13y agoSince they can't be sure DPR doesn't have a confederate or dead-man-switch process somewhere with the private key, it's not good enough to seize/know his key: they have to move balances to a new address that only they control.
- VMG 13y agoYou're right, I haven't noticed that. However, quoting Forbes: > The FBI official wouldn’t say how the agency had determined that the Bitcoin “wallet”–a collection of Bitcoins at a single address in the Bitcoin network–belonged to Ulbricht, but that it was sure they were his.
- skeltoac 13y agoLots of 324BTC transactions. 324 is how you dial FBI.
- shocks 13y agoSupposedly the coins: https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN4...
- tel 13y agoWhy did they do it in groups of 324?
- skeltoac 13y ago324 dials FBI.
- saraid216 13y agoThat honestly seems like an odd practice. Do they feel an obligation to signal that they're the FBI?
- maxerickson 13y agoThey do have a habit of putting on a show when they make a big arrest or whatever.
- saraid216 13y agoYeah, but that's because people would claim they weren't doing anything if they didn't.
- ceejayoz 13y agohttp://en.wikipedia.org/wiki/Touchdown_celebration http://en.wikipedia.org/wiki/Touchdown_celebration
- shocks 13y agoHa, interesting! Strange practice by them…
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- JohnTHaller 13y agoFor the curious, this 114k seizure represents a full 1% of all bitcoins that currently exist worldwide (0.7% of all bitcoins that will ever be produced). I'd wager the US government won't be releasing them or selling them back into circulation.
- loceng 13y agoMight there not be a required process of selling seized assets?
- JohnTHaller 13y agoAs bitcoin is likely only quasi-legal in the eyes of the government, I doubt they'd be selling it off before they take a stance on it one way or another.
- AaronM 13y agoIf they did sell them off, would give the currency some legitimacy as being legal?
- loceng 13y agoProbable, though not any more so than just anyone using it. A judge - appointed by whomever with whatever set agenda - could easily just say that those Bitcoins sold was illegal if it came to that.
- lojack 13y agoI haven't seen any evidence to suggest any quasi-legality of bitcoins themselves. The legality of bitcoin exchanges and bitcoins' use as a currency, however, could be up for debate. Its reasonable that they'd just treat them as an asset and auction them off without needing to take a stance on any legal issues.
- gojomo 13y agoOne of the government's complaints against Ulbricht states: "Bitcoins are not illegal in and of themselves and have known legitimate uses." (See 21(b)(v) of http://www1.icsi.berkeley.edu/~nweaver/UlbrichtCriminalComplaint.pdf http://www1.icsi.berkeley.edu/~nweaver/UlbrichtCriminalCompl...) Of course that's not a binding declaration, but it indicates some openness on the mattter. The agency holding it would surely like the $millions (or someday appreciated $billions) in law-enforcement toys it could buy, if liquidated. They routinely sell/spend other confiscations.
- mchannon 13y agoAs came out in the presses, http://upstart.bizjournals.com/money/loot/2013/10/08/fbi-cant-get-its-hands-on-dread.html http://upstart.bizjournals.com/money/loot/2013/10/08/fbi-can... The consensus I've read is that until announced otherwise, somebody made the announcement without realizing how seizures are supposed to work (It's akin to me taking a copy of your bank statement and thinking I have wrested control of your bank account from you). This may be that announcement but it sure seems pretty limp evidence so far.
- syncerr 13y agoIn order to "seize" ownership of bitcoins, the FBI would need to gain access to his private bitcoin keys. Wouldn't it be possible to transfer all his bitcoin to a different address with a private key that's encrypted? Wouldn't such an action prevent a seizure? EDIT: That's what appears to have happened.
- ihsw 13y agoNow the real question is -- where are they going to go from here? * Few exchanges will be able to accommodate a 144.3K BTC transaction * All transactions are public[1] * The exchange(s) that broker this transaction will receive a massive amount of publicity Now, it may end up being a bank looking to leverage the ownership of these BTC for their own business dealings, and it could adequately obfuscate where the BTC will go. Keep in mind that the FBI's BTC address has been permanently tainted -- any shady business that takes security seriously will never do business with that address. This disqualifies the usage of the BTC in sting operations (for example). [1] History of 'sends' for the FBI's BTC address: https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH?offset=0&filter=1 https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN4...
- nwh 13y ago> Keep in mind that the FBI's BTC address has been permanently tainted Well, no. Run them through any service with a shared wallet and they're instantly clean. There's no way of tracing them after that point. If they are put through a mixer, you'll end up discriminating against people that are completely unrelated. > any shady business that takes security seriously will never do business with that address Almost all systems are automated and won't discriminate one coin from another. Manually checking each input is a ridiculous idea, and destroys the idea that all coins are equal.
- ceejayoz 13y agoHow many mixers would you trust with $30M in Bitcoins? How many trustworthy mixers are going to want to be the service that mixed $30M for the FBI, causing suspicion to be cast on all their other clients?
- kstop 13y ago"Wait! Now it's $50 million! Now it's $23 million! Now it's zero!"
- neals 13y agoSo now even the FBI is saying these crazy virtual coins have actual value? A great day for Bitcoin indeed!
- DanBC 13y agoThe FBI say that WOW gold or other online game virtual objects have value. It doesn't mean much.
- macspoofing 13y agoWhy would you need FBI validation? It's a fact that Bitcoins have value.
- neals 13y agoMe? Not so much. Many people around me. Yes so much.
- artificialidiot 13y agoCan you pay your taxes in bitcoins?
- malandrew 13y ago"FBI Says It's Seized $28.5 Million In Bitcoins From Ross Ulbricht, Alleged Owner Of Silk Road" "It believes that the stash belonged to Ross Ulbricht, the 29- year-old who allegedly created and managed the Silk Road..." The title and that sentence are in contradiction with one another. They either seized it from him or they did not. If they did seize it from him, why are they saying that they "think" it is his.
- dragonwriter 13y ago> The title and that sentence are in contradiction with one another. No, they aren't. > They either seized it from him or they did not. If they did seize it from him, why are they saying that they "think" it is his. Because possession ("from Ross Ulbricht") and ownership ("belonged to Ross Ulbricht") are not the same thing. Its possible to have more certainty about the former than the latter.
- duaneb 13y agoA thief possesses items that belong to me.
- fragsworth 13y agoWhat I'd like to know is how they seized it. It requires they find his private key - either Ulbricht made serious blunders when storing his private key, or (paranoid) the FBI had some techniques to get it that we wouldn't expect.
- skeltoac 13y agoHe blundered or he caved. We only have evidence of past blunders so that is the best guess.
- Phlarp 13y agoI have to assume it was traded as part of a deal with the prosecution. He made plenty of blunders, but if he had legitimately messed up with the encryption or storage of these coins it would make much more sense that they would have found the hole and seized them right from the start.
- OvidNaso 13y agoWe also know that they waited until he entered some keys on his laptop before they seized him. The likelihood it was these keys is probably low, but still should be considered.
- ceejayoz 13y ago"X years in jail if you give us the keys, X^2 if you don't" works nicely, I'd imagine. Plea agreements are a very, very powerful - and potentially abusive - tool.
- fragsworth 13y agoDon't they usually make that public?
- ceejayoz 13y agoSometimes it comes out later. In this case, it may be to their benefit to sow a little doubt over how they obtained it.
- mrb 13y ago"the FBI may have seized the key to that [111,000 BTC] wallet and thus gained control of the bitcoins, which they could transfer at any time to the FBI’s own wallet. “They may have the key and just be keeping them at that address,” says Meiklejohn. “That would explain what we wouldn’t have seen them move." That would be extremely stupid for the FBI to do. If they don't immediately transfer the coins, then anybody with a backup of this wallet (eg. an accomplice that has yet to be apprehended) could run away with the coins, even after the wallet has been "seized". So, unless the FBI is that stupid, it is almost certain that they have not seized this secondary wallet of 111,000 BTC.