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I encourage everyone with interest in the overall story to actually read the complaint. It's astonishing. It appears that these two Federal agents were doing f

by CPLX 12y ago

I encourage everyone with interest in the overall story to actually read the complaint. It's astonishing. It appears that these two Federal agents were doing far, far more than just grabbing some excess bitcoins that were lying around and they figured nobody would miss. It reads more like a purposeful organized crime effort, involving setting up dummy shell companies, forging letters from the government, being involved in pitching investments in shady offshore bitcoin startups, etc. They also allege that these agents were turning around and selling insider info on the investigation to DPR in exchange for hundreds of thousands of dollars in bitcoin. They allege an agent just basically strong armed some random guy ("RP") who was a customer of CoinMKT and stole $297,000 or so from him, using the Federal Government search and seizure docs to do so but then just transferring the money into his personal checking account. The agent was doing shady transactions via Venmo and got flagged and had his account suspended, so he contacted them as a DEA agent to get the account reinstated. When they got suspicious (because he had been using his personal email address before going "official") and contacted his supervisors he tried to start a criminal investigation of Venmo as "a suspicious money remitter" through his office. They allege that the other agent was responsible for the wholesale theft of bitcoin from Silk Road and its various vendors, after they managed to apprehend someone ("CG") who was an administrator at Silk Road. This agent signed Federal warrants seizing the assets of Mt Gox, meanwhile transferring millions of dollars in bitcoin into his own account. Reading this is thoroughly jaw-dropping: http://www.justice.gov/sites/default/files/opa/press-releases/attachments/2015/03/30/criminal_complaint_force.pdf http://www.justice.gov/sites/default/files/opa/press-release...

CodeWriter23 12y ago
Indeed. It appears Force's fatal flaw was trusting an IRS Agent to help him out of a situation.
- Zigurd 12y ago
  Guess what his business he is in now.
modeless 12y ago
> there is some implication that these agents may have been responsible for theft of bitcoin not only from Silk Road, but from Mt Gox as well I don't think this is true. Unless I'm missing something the allegation here is not that they stole from Mt. Gox but that they used Mt. Gox to cash out bitcoins stolen from Silk Road. They did actually then steal from Mt. Gox, but it was "legal". They accused Mt. Gox of operating illegally and seized their US bank accounts. That happened a long time before Mt. Gox actually collapsed and is separate from the bitcoin theft that brought them down. This whole thing reads like a conspiracy theory dreamed up by radical libertarians. If they really are out to get you, does that mean you're not paranoid?
- gwern 12y ago
  > I don't think this is true. Unless I'm missing something the allegation here is not that they stole from Mt. Gox but that they used Mt. Gox to cash out bitcoins stolen from Silk Road. The complaint does not accuse them of stealing from Mtgox. However, there is still the curious matter of how Ulbricht's Mtgox account was drained several months later: https://www.reddit.com/r/DarkNetMarkets/comments/2tgymg/silk_goxed_how_dpr_used_mtgox_for_hedging_lost_big/ https://www.reddit.com/r/DarkNetMarkets/comments/2tgymg/silk...
- legalbeagle 12y ago
  The complaint does accuse the two agents of stealing directly from Silk Road during the "proffer" of DPR's employee, C.G. There is no accusation of stealing from Mt.Gox. They reportedly used Mt.Gox to convert stolen bitcoin to dollars and then wired out the dollars to other accounts).
user_0001 12y ago
Drug enforcement officers on the take shocker. I though this was common knowledge. Arrest and find 2 lbs and $20k, person gets charged with 1 lb and $10k
- zaroth 12y ago
  The twist being, Bitcoin is so far from even pseudo-anonymous that stealing the cash would have been much, much smarter. The Blockchain, it turns out, is the least anonymous way to transact. All your ledger made public forever, what could possibly go wrong? Sure, with perfectly clean CoinJoins, mixing, etc. you might possibly be able to hide the coins, for a little while. Just don't ever try to actually, you know, spend them.
  - cm127 12y ago
    This is something I'm still wrapping my head around because I've read that Bitcoin tumblers are effective. But it's like you said: all transactions are public.
    - jacquesm 12y ago
      Any kind of structuring or splitting is an obstacle but not an insurmountable one. And crucially: it is strong evidence for knowing that you're up to something illegal.
legalbeagle 12y ago
Interestingly, these guys weren't caught because they stole bitcoin. They were caught because they converted the bitcoin into US dollars and then ultimately transferred that cash into accounts subject to investigative jurisdiction in the U.S. Had they simply kept (and maybe even spent) the bitcoin directly, it would have been far harder to identify them.
- CPLX 12y ago
  Not sure about that. It seems like they were caught because they were totally and utterly beyond flagrant in their abuse of their office. Reading through that complaint I saw at least a dozen examples of actions where I wondered "what the hell did they think was going to happen next" in regards. Using government subpoenas to intimidate payment processors, having their name associated with bitcoin startup pitches while still being on the US Government payroll, and engaging in literal extortion attempts against DPR which were discovered easily when his servers and computer were seized, were just a few of their greatest hits. These guys were on a fast road to discovery from various different directions, it's hard to comprehend what they were thinking their endgame would be.
bcn 12y ago
Here's a link to the the complaint: http://cryptome.org/2015/03/force-001.pdf http://cryptome.org/2015/03/force-001.pdf

by CPLX 12y ago

CodeWriter23 12y ago

Indeed. It appears Force's fatal flaw was trusting an IRS Agent to help him out of a situation.

Zigurd 12y ago
Guess what his business he is in now.

modeless 12y ago

> there is some implication that these agents may have been responsible for theft of bitcoin not only from Silk Road, but from Mt Gox as well I don't think this is true. Unless I'm missing something the allegation here is not that they stole from Mt. Gox but that they used Mt. Gox to cash out bitcoins stolen from Silk Road. They did actually then steal from Mt. Gox, but it was "legal". They accused Mt. Gox of operating illegally and seized their US bank accounts. That happened a long time before Mt. Gox actually collapsed and is separate from the bitcoin theft that brought them down. This whole thing reads like a conspiracy theory dreamed up by radical libertarians. If they really are out to get you, does that mean you're not paranoid?

gwern 12y ago
> I don't think this is true. Unless I'm missing something the allegation here is not that they stole from Mt. Gox but that they used Mt. Gox to cash out bitcoins stolen from Silk Road. The complaint does not accuse them of stealing from Mtgox. However, there is still the curious matter of how Ulbricht's Mtgox account was drained several months later: https://www.reddit.com/r/DarkNetMarkets/comments/2tgymg/silk_goxed_how_dpr_used_mtgox_for_hedging_lost_big/ https://www.reddit.com/r/DarkNetMarkets/comments/2tgymg/silk...
legalbeagle 12y ago
The complaint does accuse the two agents of stealing directly from Silk Road during the "proffer" of DPR's employee, C.G. There is no accusation of stealing from Mt.Gox. They reportedly used Mt.Gox to convert stolen bitcoin to dollars and then wired out the dollars to other accounts).

user_0001 12y ago

Drug enforcement officers on the take shocker. I though this was common knowledge. Arrest and find 2 lbs and $20k, person gets charged with 1 lb and $10k

zaroth 12y ago
The twist being, Bitcoin is so far from even pseudo-anonymous that stealing the cash would have been much, much smarter. The Blockchain, it turns out, is the least anonymous way to transact. All your ledger made public forever, what could possibly go wrong? Sure, with perfectly clean CoinJoins, mixing, etc. you might possibly be able to hide the coins, for a little while. Just don't ever try to actually, you know, spend them.
- cm127 12y ago
  This is something I'm still wrapping my head around because I've read that Bitcoin tumblers are effective. But it's like you said: all transactions are public.
  - jacquesm 12y ago
    Any kind of structuring or splitting is an obstacle but not an insurmountable one. And crucially: it is strong evidence for knowing that you're up to something illegal.

legalbeagle 12y ago

Interestingly, these guys weren't caught because they stole bitcoin. They were caught because they converted the bitcoin into US dollars and then ultimately transferred that cash into accounts subject to investigative jurisdiction in the U.S. Had they simply kept (and maybe even spent) the bitcoin directly, it would have been far harder to identify them.

CPLX 12y ago
Not sure about that. It seems like they were caught because they were totally and utterly beyond flagrant in their abuse of their office. Reading through that complaint I saw at least a dozen examples of actions where I wondered "what the hell did they think was going to happen next" in regards. Using government subpoenas to intimidate payment processors, having their name associated with bitcoin startup pitches while still being on the US Government payroll, and engaging in literal extortion attempts against DPR which were discovered easily when his servers and computer were seized, were just a few of their greatest hits. These guys were on a fast road to discovery from various different directions, it's hard to comprehend what they were thinking their endgame would be.

bcn 12y ago

Here's a link to the the complaint: http://cryptome.org/2015/03/force-001.pdf http://cryptome.org/2015/03/force-001.pdf