12 ms·

For Sale: 50,000 Bitcoins

273 points by martinko 12y ago

zwtaylor 12y ago
I don't have a deep grasp of Civil Forfeiture but it seems like this is unusual considering DPR has not been convicted of anything yet. Is this part of a plea bargin or something similar?
- mmanfrin 12y ago
  http://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United_States http://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United_...
- emhart 12y ago
  from the link, and their all caps treatment preserved: ON JANUARY 27, 2014, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ENTERED A STIPULATION AND ORDER FOR INTERLOCUTORY SALE OF BITCOINS WHEREIN THE UNITED STATES AND ROSS WILLIAM ULBRICHT AGREED THAT THE UNITED STATES MAY SELL ANY PORTION OR ALL OF THE COMPUTER HARDWARE BITCOINS ON A DATE OR DATES IN A MANNER TO BE DETERMINED BY THE GOVERNMENT. So, it sounds like he clearly agreed to something, as he is mentioned by name here.
  - rrggrr 12y ago
    The "Computer Hardware Bitcoins" term is notable and I wonder to which statute it refers. What actions were taken or crime alleged where it would be important to characterize Bitcoins in this way? I speculate that Ulbrict needs funds to pay attorneys fees. It may be he stipulated to a portion (or all) of the BTC as his in-exchange for unfreezing the asset and permitting its sale.
    - waterlesscloud 12y ago
      That term is parenthesized and quoted on the site, so it must refer to something in particular. (“COMPUTER HARDWARE BITCOINS”) EDIT- They're referred to that way in the stipulation agreement he made to allow them to be sold (pdf) http://www.usmarshals.gov/assets/2014/dpr-bitcoins/order.pdf http://www.usmarshals.gov/assets/2014/dpr-bitcoins/order.pdf
    - dragonwriter 12y ago
      > The "Computer Hardware Bitcoins" term is notable and I wonder to which statute it refers. It doesn't refer to a statute. It is a short form to refer to what is described in long form in the first paragraph of the notice as "THE BITCOINS CONTAINED IN WALLET FILES THAT RESIDED ON CERTAIN COMPUTER HARDWARE BELONGING TO ROSS WILLIAM ULBRICHT". (The same long description, and the explicit linkage of the same short form to that long description, is in the linked Stipulation and Order from the court allowing the sale.) The stipulation also refers to the reason -- Ulbricht and the Government agreed to the sale to convert the bitcoins into dollars to protect both parties from risk due to volatility; the bitcoins are not being forfeited at this time, the forfeiture action will continue with the proceeds of the sale as the subject property rather than the bitcoins themselves.
  - waterlesscloud 12y ago
    It's amusing to see the url uses "dpr-bitcoins", DPR being the common community abbreviation for Dread Pirate Roberts. I mean, that's what they are, just funny to see the govt refer to him that way. http://www.usmarshals.gov/assets/2014/dpr-bitcoins/ http://www.usmarshals.gov/assets/2014/dpr-bitcoins/
  - tedunangst 12y ago
    It is clearly in Ross's interests to permit the sale. He's not DPR, remember? So these aren't his bitcoins and he therefore doesn't care what happens to them.
    - waterlesscloud 12y ago
      In the agreement document he explicitly claims ownership, and agrees to the sale since the price may go down before they are returned to him.
    - dragonwriter 12y ago
      Actually, these bitcoins are ones that Ulbricht claims are his, not the (much larger) set of bitcoins that weren't on his personal hardware which were linked to DPR which he did not claim (and which were the subject of an earlier sale.)
      - tedunangst 12y ago
        Oh, my bad. Sorry. I thought this was selling off more of the earlier Silk Road stash, not the "personal collection". Should have read more carefully.
      - pbhjpbhj 12y ago
        How does he claim to have acquired them, or has he not made any statement on that yet?
        mark-r 12y ago
        When anything you say may be used against you, would you make any such public statement before the matter comes up in court?
- ncallaway 12y ago
  Civil forfeiture is different from criminal forfeiture in that it does _not_ require a guilty verdict. Civil forfeiture is against the _property_, and it puts the burden of proof on the owner of the property to prove that it was obtained legally. Here's another explanation of it that's probably better than mine: https://www.contributoria.com/issue/2014-08/539b517ba588a79174000034 https://www.contributoria.com/issue/2014-08/539b517ba588a791...
  - eyeareque 12y ago
    So what happens if he legally obtained these bitcoins, but cannot prove that he did so? So he basically loses them before he even can prove that they are his or not? That doesn't seem right, it would make sense that the coins are held in an escrow status until he was proven guilty.. It seems to be a big loophole for the government to just go and steal whatever they want from you, before you've been proven guilty.
    - SCHiM 12y ago
      More people have noticed this, there has also been an item in John Olivers talkshow about it. Very funny, but also very sad. http://www.huffingtonpost.com/2014/10/06/john-oliver-civil-forfeiture_n_5938686.html http://www.huffingtonpost.com/2014/10/06/john-oliver-civil-f... Also this, an article mentioned in the show: http://www.washingtonpost.com/sf/investigative/2014/09/06/stop-and-seize/ http://www.washingtonpost.com/sf/investigative/2014/09/06/st...
    - mason240 12y ago
      >That doesn't seem right It's not, and there has actually been a low-level national (US) dialog on the subject over the last month. http://www.npr.org/blogs/thetwo-way/2014/11/10/363102433/police-can-seize-and-sell-assets-even-when-the-owner-broke-no-law http://www.npr.org/blogs/thetwo-way/2014/11/10/363102433/pol...
    - valarauca1 12y ago
      Civil forfeiture is really screwed up [1]. >So he basically loses them before he even can prove that they are his or not? Yes goods are guilty until proven innocent in court. >It seems to be a big loophole for the government to just go and steal whatever they want from you, before you've been proven guilty. It kinda is. Watch the link. [1] https://www.youtube.com/watch?v=3kEpZWGgJks https://www.youtube.com/watch?v=3kEpZWGgJks
- tigerente 12y ago
  Last Week Tonight with John Oliver has recently done a show summarizing the issue around Civil Forfeiture: http://www.youtube.com/watch?v=3kEpZWGgJks http://www.youtube.com/watch?v=3kEpZWGgJks
- x1798DE 12y ago
  Civil asset forfeiture cases in the US, insanely, have a reversed burden of proof and are in re actions against the assets to be seized. When assets are seized by law enforcement, you have to petition for them to be returned and prove that you came by them lawfully. You don't ever need to be convicted of or even charged with a crime in order to have your assets seized. I don't know anything about how long law enforcement has to wait before selling your assets.
  - schoen 12y ago
    Should be in rem (against a thing) instead of in re (in a matter) in this case. The Latin preposition in can take the accusative case, in which case it means 'into, onto, against' or the ablative case, in which case it means 'in, inside of'.
- ceejayoz 12y ago
  Read this investigative series and become furious: http://www.washingtonpost.com/sf/investigative/collection/stop-and-seize-2/ http://www.washingtonpost.com/sf/investigative/collection/st...
- giodamelio 12y ago
  My understanding is this. The government found a bunch of bitcoins on a computer that may or may not have belonged to Ross Ulbricht, so they asked him "Are all these bitcoins yours?". Ross can't say that they are without admitting his guilt, so the government auctions them off.
  - whyenot 12y ago
    Your understanding is wrong. From the order: WHEREAS, on or about December 12, 2013, Ulbricht filed a timely verified claim in this proceeding, asserting an ownership interest in the Computer Hardware Bitcoins
    - desdiv 12y ago
      To add to that, Ulbricht voluntarily agreed to this sale: WHEREAS, the Government and Ulbricht agree that, due to the volatile market for bitcoins, the Computer Hardware Bitcoins risk losing value during the pendency of the forfeiture proceedings; WHEREAS, the Government and Ulbricht agree that the Computer Hardware Bitcoins are to be liquidated or sold by the Government before the conclusion of the forfeiture proceedings, with the net proceeds of the sale to be held as substitute res pending further order of this Court;
- deleted 12y ago
  [deleted]
- whyenot 12y ago
  Everyone seems to be going off on a tangent about civil forfeiture. From the order: http://www.usmarshals.gov/assets/2014/dpr-bitcoins/order.pdf http://www.usmarshals.gov/assets/2014/dpr-bitcoins/order.pdf WHEREAS, the Government and Ulbricht agree that, due to the volatile market for bitcoins, the Computer Hardware Bitcoins risk losing value during the pendency of the forfeiture proceedings; WHEREAS, the Government and Ulbricht agree that the Computer Hardware Bitcoins are to be liquidated or sold by the Government before the conclusion of the forfeiture proceedings, with the net proceeds of the sale to be held as substitute res pending further order of this Court;
  - stronglikedan 12y ago
    So basically, put the current value of the coins in escrow, instead of the coins themselves, in case they drop in value dramatically over time. Makes sense to me.
    - kordless 12y ago
      A forced sale of an asset is NOT the same as putting it into escrow.
      - EpicEng 12y ago
        What text on that excerpt leads you to believe this was forced?
        sneak 12y ago
        The "US Marshalls" part.
        pg_is_a_butt 12y ago
        considering there is no "US Marshalls" part, and the Government was only referenced as "the Government".... you're an idiot.
        12y ago
- dragonwriter 12y ago
  Its worth noting that while they have been seized, they have not yet been forfeited -- that action is ongoing. The sale was agreed to secure the value and protect the government and Ulbricht both from price volatility; the forfeiture action will continue against the sale proceeds.
- downandout 12y ago
  Civil forfeiture is one of the scariest areas of our legal system. The government essentially files a civil lawsuit against your property, and it then it's on you to get it back (the case titles are actually things like "USA vs. $25,000 US Currency"). This ability has created perverse consequences, such as turning police into nothing more than a band of highway robbers [1]. It's also used in drug cases, like DPR's, because it's far easier to obtain a civil judgment than a criminal one. He could be found not guilty on all counts, and still lose all of the money that this sale generates (he agreed to the sale of the coins in hopes of beating the civil forfeiture that will come later, but he has little chance of that). [1] http://www.washingtonpost.com/opinions/tim-walberg-an-end-to-the-abuse-of-civil-forfeiture/2014/09/04/e7b9d07a-3395-11e4-9e92-0899b306bbea_story.html http://www.washingtonpost.com/opinions/tim-walberg-an-end-to...
- fnordfnordfnord 12y ago
  ij.org has some good info about civil asset forfeiture. WRT DPR, I would guess that in order to have any chance to successfully challenge the forfeiture he d likely find it necessary to incriminate himself.
- InclinedPlane 12y ago
  Civil forfeiture does not require a criminal conviction of the owner of the property. Most importantly, in civil forfeiture it's not the owner who is on trial, it's the property. And unlike criminal law which works on the premise of presumption of innocence and requirements of proof of guilt "beyond reasonable doubt", asset forfeiture works based on civil law and the standard of "preponderance of evidence" (or a >50% probability of guilt).
- Istof 12y ago
  you don't need to be guilty of anything for being victim of civil forfeiture.. they create a lawsuit against your property and property is considered guilty until proven innocent, unlike people.
Aaronneyer 12y ago
Will be interesting to see how this announcement effects the price of bitcoins. I would imagine there will be an initial drop out of panic, but if we see some wealthy individuals with a vested interest in bitcoin buying these up, it could very much cause a large shift upwards in price.
- lucb1e 12y ago
  > Will be interesting to see how this announcement effects the price of bitcoins. That's what people asked last time when, if I remember correctly, the FBI was selling off some of the Silk Road coins. Nothing really happened, maybe a few percent drop, but that happens every day so I'm not even sure that was due to the sell.
  - zeeshanm 12y ago
    To add more context, a well-known investor who happens to have significant influence ended up buying those bitcoins.
- martinko 12y ago
  Right after the news broke we saw a relatively high volume dump pushing the price down by about 8%, from 410 to 375. Curious to see where it will go now. To be honest I expected a larger dump after this kind of news..
  - bbcbasic 12y ago
    Funny it should have barely any effect on the price, but if the news caused this drop it is probably because people sold anticipating that the news would cause this drop.
- atmosx 12y ago
  I don't think so. You're assuming that BTC are somehow equally distributed :-) IMHO they are not ;-)
  - 12y ago
dntrkv 12y ago
According to Coinbase, the current buy price for bitcoin is $385. 385 x 50,000 = $19.2MM
- nkuttler 12y ago
  Coinbase doesn't have enough volume to sell you 50k coins right now, you would hike the price towards infinity. You could buy something like 22k coins for 24M.
xchaotic 12y ago
I'll keep an eye out for this. I think the final price will reach quite close to the market price with no guarantee of being able to sell at that price. Still might be worthwhile for someone to build up their position considerably without spooking the exchanges.
- martinko 12y ago
  The question is, where will the market price be by the auction date? This news mean that a substantial amount of money that may have otherwise been used to buy BTC on the open market will now go towards this purchase.
- dkyc 12y ago
  Last time the US auctioned off bitcoins, the price was above market price [0]. A VC wanted to buy a large chunk of bitcoins for a company he invests in without driving up the price. [0] http://www.bloomberg.com/news/2014-07-01/bitcoin-auction-ends-single-bidder-wins-entire-cache.html http://www.bloomberg.com/news/2014-07-01/bitcoin-auction-end...
  - rebel 12y ago
    I don't see anywhere in your cited article that says the coins were purchased for more than market price. Can you point it out for me? Additionally, if you were a rational investor who believed the coins were worth above market price, why would you not additionally buy up any coins on the market that were selling below that price? Ultimately, bidding up the market price to whatever the "above-market" bid was.
    - nkuttler 12y ago
      For a rational investor it would make sense to bid above "market" price. There are many markets, and those markets have a limited volume of coin to sell. Buying 30k coins would have a big effect on the price of any single market. Bitstamp, which says "world's leading bitcoin exchange" about itself can't sell you 30k coins right now. Oh, and bitcoin exchanges have a history of.. let's call it.. problems. A rational investor who wants to buy a large volume of coins would certainly bid above "market" price for coins handled by a reputable seller.
jnardiello 12y ago
The world has gone insane.
adnam 12y ago
Oh, was there a trail and a guilty verdict I didn't hear about?
pimlottc 12y ago
How does this relate to the previous auction of approx. 30,000 seized bitcoins back in June? http://www.coindesk.com/us-marshals-one-auction-bidder-claimed-all-30000-silk-road-bitcoins/ http://www.coindesk.com/us-marshals-one-auction-bidder-claim...
- deleted 12y ago
  [deleted]
- gwern 12y ago
  That was the sale of the Silk Road 1 server's bitcoins - the bitcoins SR1 users had actually in the site, either deposited because they intended to buy something, locked up in escrow as part of an in-flight order, or not yet withdrawn by a seller. This is Ross Ulbricht's personal bitcoins on his laptop and backup drives.
lucb1e 12y ago
For scale, this is not even a day's worth of normal transactions. Yesterday about 177000 BTC was sent across the network, and that wasn't a big day.
- mrb 12y ago
  A lot more than 177k BTC changed hands yesterday. You don't see it on the block chain because most of it is transacted off-chain: 788k BTC were sold and bought on Bitcoin exchanges in the last 24 hours - http://bitcoinity.org/markets/list?currency=ALL&span=24h http://bitcoinity.org/markets/list?currency=ALL&span=24h So 50k BTC is really nothing (~6%) compared to what the market usually handles every day.
  - drzaiusapelord 12y ago
    > because most of it is transacted off-chain Does this come with risk? Shouldn't all transactions be on the chain?
    - wmf 12y ago
      On-chain transactions are much slower which is a different kind of risk.
    - nitid_name 12y ago
      Yep. Look what happens every time a bitcoin bank folds. Everyone who had coins in that bank rather than in their own wallet suddenly loses every coin they have.
    - GrinningFool 12y ago
      I'm not sure why this was downvoted, it's a legitimate question. The problem is the sheer quantity of transactions that occur on the various exchanges. Adding that volume to the public chain would make the public chain significantly larger than it is. The bitcoin.cc wiki Scalability page [1] does a better job of documenting the constraints than I could in this space. The flip side of this is that there's a required level of trust when doing business with an exchange. Thus far no exchanges that I know of are actually publishing their ledgers - so we really have no way to know that all trades are made in good faith and all funds are properly managed by the exchanges. Unlike regulated government currencies, there are no audit requirements. This means there is nothing that actually requires an exchange to be operating in good faith. I'm actually surprised that there are not yet any private exchanges[2] with public/open ledgers, in response to Mt Gox and various other scams (both for bitcoin and other currencies). Seems the market has to be there for it, after people have been burned so many times. [1] https://en.bitcoin.it/wiki/Scalability https://en.bitcoin.it/wiki/Scalability [2] that I know of. I know there are protocols under development intended to handle this, but no actual exchanges that simply publish all transactions for the world to see. [edit] can't believe I used 'shear' instead of 'sheer'.
DickingAround 12y ago
What's sad is that this was half the point of bitcoins; they can't be easily seized. I hope the other DPRs are smart enough to have a system which moves their coins before the gov breaks the encryption on the wallets they seize in person.
- sneak 12y ago
  There are many DPR-related bitcoins that they were unable to access. Fear not. This was not "half the point of bitcoins" - the intent of the bitcoin release is only hinted at by Satoshi. Any point you are asserting here is pure speculation. However, if you think this is a valuable property, a so-called "brainwallet" provides exactly this safety. They've been around for ages. No moving of coins required.
  - DickingAround 12y ago
    Where there really coins they didn't get? Source? (Not to dispute the claim, just interested) About it being half the point: Perhaps not stated explicitly, but he knew what he was doing by not baking in a government back door. From the whitepaper: "any two willing parties to transact directly with each other" I'm probably not getting the joke, but are there people who memorize their secret keys? I've never looked to see how long they are but I assume that's quite a feat.
    - wmf 12y ago
      Maybe it would be more correct to say that BTC can't be remotely seized.
    - inaworld 12y ago
      half the point of bitcoin was to provide an alternative to so-called fiat currencies whose value is under the influence of govt policies. The idea was to be an electronic version of a return to the gold standard. the other half was the flip side of that bitcoin.
    - jpindar 12y ago
      No joke. Brainwallets use keys derived from a passphrase. Of course the passphase has to be reasonably long and something no one would ever guess, but even a randomly generated passphrase is easier to memorize than a long string of characters.
pingec 12y ago
This guy calls it BS. Any thoughts? http://trilema.com/2014/the-united-states-scammers-service-formerly-marshalls-service/ http://trilema.com/2014/the-united-states-scammers-service-f...
- wmf 12y ago
  It does seem odd that they don't release the name or price of the winning bid.
  - pmorici 12y ago
    Well the winner of the first auction came forward voluntarily so it isn't like it was a mystery.
- pmorici 12y ago
  Looks like a crazy rant to me. This is the same process they used to sell a related stash of Bitcoin earlier this year. The winner of that auction was Tim Draper.
devindotcom 12y ago
Marshals say there are 94 thousand more where that came from so if you're still scraping together the 100 grand to join the bidding, you'll have a couple more chances.
Aqueous 12y ago
I wonder if they'll accept drugs?
softdev12 12y ago
It seems to me that the several bitcoin auctions by the US government aren't that bad a thing for the cryptocurrency movement. To me, it provides a headline story that's sure to raise awareness of bitcoin for the general public (something that is certainly needed). Plus, it brings out the major bitcoin buyers. It's the equivalent of Sotheby's or Christie's having an auction of Picassos or Warhols.
logician76 12y ago
It would be cool if bitcoins seized in one crime would be compensating bitcoins stolen in another crime: Mt.Gox ..
- megablast 12y ago
  It is not the governments role to replace the stuff that was stolen from you. That is what insurance is for.
  - NeutronBoy 12y ago
    Especially Bitcoins, of which a key 'feature' is 'No Government Intervention required'.
sidhire 12y ago
How does a party go about determining a bid for something like this?

273 points by martinko 12y ago

I don't have a deep grasp of Civil Forfeiture but it seems like this is unusual considering DPR has not been convicted of anything yet. Is this part of a plea bargin or something similar?

mmanfrin 12y ago
http://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United_States http://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United_...
emhart 12y ago
from the link, and their all caps treatment preserved: ON JANUARY 27, 2014, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ENTERED A STIPULATION AND ORDER FOR INTERLOCUTORY SALE OF BITCOINS WHEREIN THE UNITED STATES AND ROSS WILLIAM ULBRICHT AGREED THAT THE UNITED STATES MAY SELL ANY PORTION OR ALL OF THE COMPUTER HARDWARE BITCOINS ON A DATE OR DATES IN A MANNER TO BE DETERMINED BY THE GOVERNMENT. So, it sounds like he clearly agreed to something, as he is mentioned by name here.
- rrggrr 12y ago
  The "Computer Hardware Bitcoins" term is notable and I wonder to which statute it refers. What actions were taken or crime alleged where it would be important to characterize Bitcoins in this way? I speculate that Ulbrict needs funds to pay attorneys fees. It may be he stipulated to a portion (or all) of the BTC as his in-exchange for unfreezing the asset and permitting its sale.
  - waterlesscloud 12y ago
    That term is parenthesized and quoted on the site, so it must refer to something in particular. (“COMPUTER HARDWARE BITCOINS”) EDIT- They're referred to that way in the stipulation agreement he made to allow them to be sold (pdf) http://www.usmarshals.gov/assets/2014/dpr-bitcoins/order.pdf http://www.usmarshals.gov/assets/2014/dpr-bitcoins/order.pdf
  - dragonwriter 12y ago
    > The "Computer Hardware Bitcoins" term is notable and I wonder to which statute it refers. It doesn't refer to a statute. It is a short form to refer to what is described in long form in the first paragraph of the notice as "THE BITCOINS CONTAINED IN WALLET FILES THAT RESIDED ON CERTAIN COMPUTER HARDWARE BELONGING TO ROSS WILLIAM ULBRICHT". (The same long description, and the explicit linkage of the same short form to that long description, is in the linked Stipulation and Order from the court allowing the sale.) The stipulation also refers to the reason -- Ulbricht and the Government agreed to the sale to convert the bitcoins into dollars to protect both parties from risk due to volatility; the bitcoins are not being forfeited at this time, the forfeiture action will continue with the proceeds of the sale as the subject property rather than the bitcoins themselves.
- waterlesscloud 12y ago
  It's amusing to see the url uses "dpr-bitcoins", DPR being the common community abbreviation for Dread Pirate Roberts. I mean, that's what they are, just funny to see the govt refer to him that way. http://www.usmarshals.gov/assets/2014/dpr-bitcoins/ http://www.usmarshals.gov/assets/2014/dpr-bitcoins/
- tedunangst 12y ago
  It is clearly in Ross's interests to permit the sale. He's not DPR, remember? So these aren't his bitcoins and he therefore doesn't care what happens to them.
  - waterlesscloud 12y ago
    In the agreement document he explicitly claims ownership, and agrees to the sale since the price may go down before they are returned to him.
  - dragonwriter 12y ago
    Actually, these bitcoins are ones that Ulbricht claims are his, not the (much larger) set of bitcoins that weren't on his personal hardware which were linked to DPR which he did not claim (and which were the subject of an earlier sale.)
    - tedunangst 12y ago
      Oh, my bad. Sorry. I thought this was selling off more of the earlier Silk Road stash, not the "personal collection". Should have read more carefully.
    - pbhjpbhj 12y ago
      How does he claim to have acquired them, or has he not made any statement on that yet?
      - mark-r 12y ago
        When anything you say may be used against you, would you make any such public statement before the matter comes up in court?
ncallaway 12y ago
Civil forfeiture is different from criminal forfeiture in that it does _not_ require a guilty verdict. Civil forfeiture is against the _property_, and it puts the burden of proof on the owner of the property to prove that it was obtained legally. Here's another explanation of it that's probably better than mine: https://www.contributoria.com/issue/2014-08/539b517ba588a79174000034 https://www.contributoria.com/issue/2014-08/539b517ba588a791...
- eyeareque 12y ago
  So what happens if he legally obtained these bitcoins, but cannot prove that he did so? So he basically loses them before he even can prove that they are his or not? That doesn't seem right, it would make sense that the coins are held in an escrow status until he was proven guilty.. It seems to be a big loophole for the government to just go and steal whatever they want from you, before you've been proven guilty.
  - SCHiM 12y ago
    More people have noticed this, there has also been an item in John Olivers talkshow about it. Very funny, but also very sad. http://www.huffingtonpost.com/2014/10/06/john-oliver-civil-forfeiture_n_5938686.html http://www.huffingtonpost.com/2014/10/06/john-oliver-civil-f... Also this, an article mentioned in the show: http://www.washingtonpost.com/sf/investigative/2014/09/06/stop-and-seize/ http://www.washingtonpost.com/sf/investigative/2014/09/06/st...
  - mason240 12y ago
    >That doesn't seem right It's not, and there has actually been a low-level national (US) dialog on the subject over the last month. http://www.npr.org/blogs/thetwo-way/2014/11/10/363102433/police-can-seize-and-sell-assets-even-when-the-owner-broke-no-law http://www.npr.org/blogs/thetwo-way/2014/11/10/363102433/pol...
  - valarauca1 12y ago
    Civil forfeiture is really screwed up [1]. >So he basically loses them before he even can prove that they are his or not? Yes goods are guilty until proven innocent in court. >It seems to be a big loophole for the government to just go and steal whatever they want from you, before you've been proven guilty. It kinda is. Watch the link. [1] https://www.youtube.com/watch?v=3kEpZWGgJks https://www.youtube.com/watch?v=3kEpZWGgJks
tigerente 12y ago
Last Week Tonight with John Oliver has recently done a show summarizing the issue around Civil Forfeiture: http://www.youtube.com/watch?v=3kEpZWGgJks http://www.youtube.com/watch?v=3kEpZWGgJks
x1798DE 12y ago
Civil asset forfeiture cases in the US, insanely, have a reversed burden of proof and are in re actions against the assets to be seized. When assets are seized by law enforcement, you have to petition for them to be returned and prove that you came by them lawfully. You don't ever need to be convicted of or even charged with a crime in order to have your assets seized. I don't know anything about how long law enforcement has to wait before selling your assets.
- schoen 12y ago
  Should be in rem (against a thing) instead of in re (in a matter) in this case. The Latin preposition in can take the accusative case, in which case it means 'into, onto, against' or the ablative case, in which case it means 'in, inside of'.
ceejayoz 12y ago
Read this investigative series and become furious: http://www.washingtonpost.com/sf/investigative/collection/stop-and-seize-2/ http://www.washingtonpost.com/sf/investigative/collection/st...
giodamelio 12y ago
My understanding is this. The government found a bunch of bitcoins on a computer that may or may not have belonged to Ross Ulbricht, so they asked him "Are all these bitcoins yours?". Ross can't say that they are without admitting his guilt, so the government auctions them off.
- whyenot 12y ago
  Your understanding is wrong. From the order: WHEREAS, on or about December 12, 2013, Ulbricht filed a timely verified claim in this proceeding, asserting an ownership interest in the Computer Hardware Bitcoins
  - desdiv 12y ago
    To add to that, Ulbricht voluntarily agreed to this sale: WHEREAS, the Government and Ulbricht agree that, due to the volatile market for bitcoins, the Computer Hardware Bitcoins risk losing value during the pendency of the forfeiture proceedings; WHEREAS, the Government and Ulbricht agree that the Computer Hardware Bitcoins are to be liquidated or sold by the Government before the conclusion of the forfeiture proceedings, with the net proceeds of the sale to be held as substitute res pending further order of this Court;
deleted 12y ago
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whyenot 12y ago
Everyone seems to be going off on a tangent about civil forfeiture. From the order: http://www.usmarshals.gov/assets/2014/dpr-bitcoins/order.pdf http://www.usmarshals.gov/assets/2014/dpr-bitcoins/order.pdf WHEREAS, the Government and Ulbricht agree that, due to the volatile market for bitcoins, the Computer Hardware Bitcoins risk losing value during the pendency of the forfeiture proceedings; WHEREAS, the Government and Ulbricht agree that the Computer Hardware Bitcoins are to be liquidated or sold by the Government before the conclusion of the forfeiture proceedings, with the net proceeds of the sale to be held as substitute res pending further order of this Court;
- stronglikedan 12y ago
  So basically, put the current value of the coins in escrow, instead of the coins themselves, in case they drop in value dramatically over time. Makes sense to me.
  - kordless 12y ago
    A forced sale of an asset is NOT the same as putting it into escrow.
    - EpicEng 12y ago
      What text on that excerpt leads you to believe this was forced?
      - sneak 12y ago
        The "US Marshalls" part.
        pg_is_a_butt 12y ago
        considering there is no "US Marshalls" part, and the Government was only referenced as "the Government".... you're an idiot.
        12y ago
dragonwriter 12y ago
Its worth noting that while they have been seized, they have not yet been forfeited -- that action is ongoing. The sale was agreed to secure the value and protect the government and Ulbricht both from price volatility; the forfeiture action will continue against the sale proceeds.
downandout 12y ago
Civil forfeiture is one of the scariest areas of our legal system. The government essentially files a civil lawsuit against your property, and it then it's on you to get it back (the case titles are actually things like "USA vs. $25,000 US Currency"). This ability has created perverse consequences, such as turning police into nothing more than a band of highway robbers [1]. It's also used in drug cases, like DPR's, because it's far easier to obtain a civil judgment than a criminal one. He could be found not guilty on all counts, and still lose all of the money that this sale generates (he agreed to the sale of the coins in hopes of beating the civil forfeiture that will come later, but he has little chance of that). [1] http://www.washingtonpost.com/opinions/tim-walberg-an-end-to-the-abuse-of-civil-forfeiture/2014/09/04/e7b9d07a-3395-11e4-9e92-0899b306bbea_story.html http://www.washingtonpost.com/opinions/tim-walberg-an-end-to...
fnordfnordfnord 12y ago
ij.org has some good info about civil asset forfeiture. WRT DPR, I would guess that in order to have any chance to successfully challenge the forfeiture he d likely find it necessary to incriminate himself.
InclinedPlane 12y ago
Civil forfeiture does not require a criminal conviction of the owner of the property. Most importantly, in civil forfeiture it's not the owner who is on trial, it's the property. And unlike criminal law which works on the premise of presumption of innocence and requirements of proof of guilt "beyond reasonable doubt", asset forfeiture works based on civil law and the standard of "preponderance of evidence" (or a >50% probability of guilt).
Istof 12y ago
you don't need to be guilty of anything for being victim of civil forfeiture.. they create a lawsuit against your property and property is considered guilty until proven innocent, unlike people.

Aaronneyer 12y ago

Will be interesting to see how this announcement effects the price of bitcoins. I would imagine there will be an initial drop out of panic, but if we see some wealthy individuals with a vested interest in bitcoin buying these up, it could very much cause a large shift upwards in price.

lucb1e 12y ago
> Will be interesting to see how this announcement effects the price of bitcoins. That's what people asked last time when, if I remember correctly, the FBI was selling off some of the Silk Road coins. Nothing really happened, maybe a few percent drop, but that happens every day so I'm not even sure that was due to the sell.
- zeeshanm 12y ago
  To add more context, a well-known investor who happens to have significant influence ended up buying those bitcoins.
martinko 12y ago
Right after the news broke we saw a relatively high volume dump pushing the price down by about 8%, from 410 to 375. Curious to see where it will go now. To be honest I expected a larger dump after this kind of news..
- bbcbasic 12y ago
  Funny it should have barely any effect on the price, but if the news caused this drop it is probably because people sold anticipating that the news would cause this drop.
atmosx 12y ago
I don't think so. You're assuming that BTC are somehow equally distributed :-) IMHO they are not ;-)
- 12y ago

dntrkv 12y ago

According to Coinbase, the current buy price for bitcoin is $385. 385 x 50,000 = $19.2MM

nkuttler 12y ago
Coinbase doesn't have enough volume to sell you 50k coins right now, you would hike the price towards infinity. You could buy something like 22k coins for 24M.

xchaotic 12y ago

I'll keep an eye out for this. I think the final price will reach quite close to the market price with no guarantee of being able to sell at that price. Still might be worthwhile for someone to build up their position considerably without spooking the exchanges.

martinko 12y ago
The question is, where will the market price be by the auction date? This news mean that a substantial amount of money that may have otherwise been used to buy BTC on the open market will now go towards this purchase.
dkyc 12y ago
Last time the US auctioned off bitcoins, the price was above market price [0]. A VC wanted to buy a large chunk of bitcoins for a company he invests in without driving up the price. [0] http://www.bloomberg.com/news/2014-07-01/bitcoin-auction-ends-single-bidder-wins-entire-cache.html http://www.bloomberg.com/news/2014-07-01/bitcoin-auction-end...
- rebel 12y ago
  I don't see anywhere in your cited article that says the coins were purchased for more than market price. Can you point it out for me? Additionally, if you were a rational investor who believed the coins were worth above market price, why would you not additionally buy up any coins on the market that were selling below that price? Ultimately, bidding up the market price to whatever the "above-market" bid was.
  - nkuttler 12y ago
    For a rational investor it would make sense to bid above "market" price. There are many markets, and those markets have a limited volume of coin to sell. Buying 30k coins would have a big effect on the price of any single market. Bitstamp, which says "world's leading bitcoin exchange" about itself can't sell you 30k coins right now. Oh, and bitcoin exchanges have a history of.. let's call it.. problems. A rational investor who wants to buy a large volume of coins would certainly bid above "market" price for coins handled by a reputable seller.

jnardiello 12y ago

The world has gone insane.

adnam 12y ago

Oh, was there a trail and a guilty verdict I didn't hear about?

pimlottc 12y ago

How does this relate to the previous auction of approx. 30,000 seized bitcoins back in June? http://www.coindesk.com/us-marshals-one-auction-bidder-claimed-all-30000-silk-road-bitcoins/ http://www.coindesk.com/us-marshals-one-auction-bidder-claim...

deleted 12y ago
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gwern 12y ago
That was the sale of the Silk Road 1 server's bitcoins - the bitcoins SR1 users had actually in the site, either deposited because they intended to buy something, locked up in escrow as part of an in-flight order, or not yet withdrawn by a seller. This is Ross Ulbricht's personal bitcoins on his laptop and backup drives.

lucb1e 12y ago

For scale, this is not even a day's worth of normal transactions. Yesterday about 177000 BTC was sent across the network, and that wasn't a big day.

mrb 12y ago
A lot more than 177k BTC changed hands yesterday. You don't see it on the block chain because most of it is transacted off-chain: 788k BTC were sold and bought on Bitcoin exchanges in the last 24 hours - http://bitcoinity.org/markets/list?currency=ALL&span=24h http://bitcoinity.org/markets/list?currency=ALL&span=24h So 50k BTC is really nothing (~6%) compared to what the market usually handles every day.
- drzaiusapelord 12y ago
  > because most of it is transacted off-chain Does this come with risk? Shouldn't all transactions be on the chain?
  - wmf 12y ago
    On-chain transactions are much slower which is a different kind of risk.
  - nitid_name 12y ago
    Yep. Look what happens every time a bitcoin bank folds. Everyone who had coins in that bank rather than in their own wallet suddenly loses every coin they have.
  - GrinningFool 12y ago
    I'm not sure why this was downvoted, it's a legitimate question. The problem is the sheer quantity of transactions that occur on the various exchanges. Adding that volume to the public chain would make the public chain significantly larger than it is. The bitcoin.cc wiki Scalability page [1] does a better job of documenting the constraints than I could in this space. The flip side of this is that there's a required level of trust when doing business with an exchange. Thus far no exchanges that I know of are actually publishing their ledgers - so we really have no way to know that all trades are made in good faith and all funds are properly managed by the exchanges. Unlike regulated government currencies, there are no audit requirements. This means there is nothing that actually requires an exchange to be operating in good faith. I'm actually surprised that there are not yet any private exchanges[2] with public/open ledgers, in response to Mt Gox and various other scams (both for bitcoin and other currencies). Seems the market has to be there for it, after people have been burned so many times. [1] https://en.bitcoin.it/wiki/Scalability https://en.bitcoin.it/wiki/Scalability [2] that I know of. I know there are protocols under development intended to handle this, but no actual exchanges that simply publish all transactions for the world to see. [edit] can't believe I used 'shear' instead of 'sheer'.

DickingAround 12y ago

What's sad is that this was half the point of bitcoins; they can't be easily seized. I hope the other DPRs are smart enough to have a system which moves their coins before the gov breaks the encryption on the wallets they seize in person.

sneak 12y ago
There are many DPR-related bitcoins that they were unable to access. Fear not. This was not "half the point of bitcoins" - the intent of the bitcoin release is only hinted at by Satoshi. Any point you are asserting here is pure speculation. However, if you think this is a valuable property, a so-called "brainwallet" provides exactly this safety. They've been around for ages. No moving of coins required.
- DickingAround 12y ago
  Where there really coins they didn't get? Source? (Not to dispute the claim, just interested) About it being half the point: Perhaps not stated explicitly, but he knew what he was doing by not baking in a government back door. From the whitepaper: "any two willing parties to transact directly with each other" I'm probably not getting the joke, but are there people who memorize their secret keys? I've never looked to see how long they are but I assume that's quite a feat.
  - wmf 12y ago
    Maybe it would be more correct to say that BTC can't be remotely seized.
  - inaworld 12y ago
    half the point of bitcoin was to provide an alternative to so-called fiat currencies whose value is under the influence of govt policies. The idea was to be an electronic version of a return to the gold standard. the other half was the flip side of that bitcoin.
  - jpindar 12y ago
    No joke. Brainwallets use keys derived from a passphrase. Of course the passphase has to be reasonably long and something no one would ever guess, but even a randomly generated passphrase is easier to memorize than a long string of characters.

pingec 12y ago

This guy calls it BS. Any thoughts? http://trilema.com/2014/the-united-states-scammers-service-formerly-marshalls-service/ http://trilema.com/2014/the-united-states-scammers-service-f...

wmf 12y ago
It does seem odd that they don't release the name or price of the winning bid.
- pmorici 12y ago
  Well the winner of the first auction came forward voluntarily so it isn't like it was a mystery.
pmorici 12y ago
Looks like a crazy rant to me. This is the same process they used to sell a related stash of Bitcoin earlier this year. The winner of that auction was Tim Draper.

devindotcom 12y ago

Marshals say there are 94 thousand more where that came from so if you're still scraping together the 100 grand to join the bidding, you'll have a couple more chances.

Aqueous 12y ago

I wonder if they'll accept drugs?

softdev12 12y ago

It seems to me that the several bitcoin auctions by the US government aren't that bad a thing for the cryptocurrency movement. To me, it provides a headline story that's sure to raise awareness of bitcoin for the general public (something that is certainly needed). Plus, it brings out the major bitcoin buyers. It's the equivalent of Sotheby's or Christie's having an auction of Picassos or Warhols.

logician76 12y ago

It would be cool if bitcoins seized in one crime would be compensating bitcoins stolen in another crime: Mt.Gox ..

megablast 12y ago
It is not the governments role to replace the stuff that was stolen from you. That is what insurance is for.
- NeutronBoy 12y ago
  Especially Bitcoins, of which a key 'feature' is 'No Government Intervention required'.

sidhire 12y ago

How does a party go about determining a bid for something like this?