
For Sale: 29,656.51306529 Bitcoins - jc123
http://www.usmarshals.gov/assets/2014/bitcoins
======
marme
What people should be more concerned with is the fact that the government is
selling off someone elses property before they have even been convicted of a
crime. Dread pirate roberts plead not guilty and has still not had a trial
yet. He has not been convicted of any crime so if these are his coins they are
selling them before the trial is even finished

~~~
sschueller
These coins should be removed from the blockchain in a protocol update agreed
upon by everyone.

No government should be making money this way.

~~~
baq
so it's perfectly fair to profit from selling drugs that kill people, but when
the profits from illegal activity are seized, the public shouldn't be able to
reuse them?

~~~
rplnt
Please entertain me how drugs sold on SR kill people.

~~~
scrollaway
Pretty sure OP meant tobacco and alcohol. The government doesn't tax SR.

------
artursapek
The price has tanked today as a result of this.
[http://cryptowat.ch/btce/btcusd/1hr/](http://cryptowat.ch/btce/btcusd/1hr/)

Market started going crazy earlier today when DPR's seized coins started to
move.
[https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN4...](https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH)
The downtrend is only accelerating.

~~~
Ologn
Bitcoins are absolutely worthless. If there is any sign of a tech bubble, it
is these worthless hashes that people pay hundreds of dollars for.

One of the genius aspects of the Bitcoin scam is the limited output and
increasing difficulty as it goes on. This keeps the scam going longer. If it
were like tulip bulbs, or subprime real estate, or pets.com type stocks, the
bubble would eventually burst. With the types of bubbles we've seen, and the
big names in tech willing to associate their names with this scam, keeping a
<$15 billion market cap going is feasible for a little while.

Also keep in mind that the float is not all that high. Many bitcoins have
never been traded, especially early ones. That 30k of Bitcoins are going on
the market can tank the price so much shows how weak demand is for this
worthless "currency".

One aspect of the pied pipers of this scam is that their theories of its value
are not falsifiable. My theory is falsifiable - Bitcoins are going to go from
a current market cap of over $7 billion to well below $1 billion. There theory
is not falsifiable "it's valuable because it's valuable". So if it goes up
they're right, if it goes down they're right.

 _Why_ are Bitcoins valuable? Anyone thinking of buying an ASIC or a Bitcoin
should read from the Bitcoin boosters the answer to this question. There is no
answer. Which is why Bitcoin is bound to crash.

It's possible a real online currency might happen. The Bitcoin scam is
certainly postponing that day. When Bitcoin crashes, possibly with much legal
involvement afterward, VCs will be very hesitant to fund an online currency
for years to come.

To me the real currency would have to be something in the realm of
Folding@home. I'm not sure how it would work of if its computationally
feasible, but I do know people would pay for the results of useful
computations such as that.

I would short Bitcoins if I could find a reliable party to do it with, and it
were easier to do. That doing that is so difficult is another sign how it's
not a real currency.

That this post and any post not buying into the Bitcoin hype is bound to be
downvoted is yet another sign of the scam. I rarely have posts downvoted on
HN, but any time I am slightly skeptical of Bitcoin's value, the Bitcoin
hucksters pile on and downvote anyone questioning the scam into oblivion. It
reminds me of how MLM people act on the Internet.

~~~
jnbiche
I didn't downvote, but I have to wonder what you're threshhold for not being a
scam is? What companies will have to accept it, and how long will it have to
be around?

I'm pretty amazed that people still think it's a scam when huge companies with
massive legal departments are accepting it. That's some pretty extreme
skepticism.

BTW, there are plenty of easy, legitimate ways to short Bitcoin, but given
your extraordinarily high threshold for "non-scam", I won't bother mentioning
them.

PS: Bitcoins are valuable because people are willing to buy them. Despite what
most people think, money is not magic, it's just an agreement.

~~~
JohnTHaller
Huge companies with massive legal departments don't accept bitcoin. They
contract with smaller VC-funded startups to accept it and assume the risk and
pay the large retailer in cash at sale time. The large retailers neither
accept nor hold bitcoin directly, nor should they (as a merchant, you don't
want to be holding something that loses 10% of its value during your business
hours as bitcoin did today). The large retailers merely get to enjoy
capitalizing on bitcoin as a purchase method.

~~~
SilasX
That seems like a non-standard usage of "accept". Does everyone who accepts a
payment method while hedging it also not count as another vendor who accepts
it?

If someone accepts PayPal while insuring against the possibility of not being
paid "not accept PayPal"?

If a non-US vendor uses forward/option contracts to maintain cash flow in the
local currency, do they "not accept" USD?

~~~
pessimizer
This doesn't count as insurance, though, because no risk is ever actually
held, it's farmed out. The most anti-bitcoin person in the world will accept
USD that has been converted from bitcoin by an entity that is actually taking
the risk, because by necessity it needs to hold lots of bitcoin reserves just
to do business.

~~~
SilasX
Just like how "The most anti-USD person in the world will accept Yen that has
been converted from USD..."

------
joosters
Isn't this a bit presumptuous?

Ross William Ulbricht hasn't yet been convicted of anything. I know that they
aren't selling his personal bitcoins, but in the (highly unlikely) event that
he is found innocent, wouldn't that mean that the Silk Road assets need to be
returned to him? How then can they sell them now?

~~~
ryan_j_naughton
It is presumptuous, but that is how civil forfeiture works. Its atrocious.

Take a look at this well written article by the New Yorker Taken: The Use and
Abuse of Civil Forfeiture
[http://www.newyorker.com/reporting/2013/08/12/130812fa_fact_...](http://www.newyorker.com/reporting/2013/08/12/130812fa_fact_stillman)

~~~
ahallock
That's disgusting. FTA: 'Many states, facing fiscal crises, have expanded the
reach of their forfeiture statutes, and made it easier for law enforcement to
use the revenue however they see fit.' How are they any better than the
criminals they're supposed to be protecting us from?

~~~
Uhhrrr
-Their henchmen wear uniforms so you don't confuse them with normal people

-They operate from fixed headquarters

-Some of them are elected

-They have a complaints department

-Certain social services are provided

------
vijayboyapati
This is good in a way. It's yet another tacit admission of the legal
legitimacy of bitcoin by USG. It's not like USG would seize 20kg of cocaine
then sell it into the market in an auction!

~~~
smtddr
"This is actually good news!" \--
[http://thisisactuallygoodnews.com/](http://thisisactuallygoodnews.com/)

But seriously, I'm a bit suspicious about what gov would do with the list of
all the people willing to buy those coins.

~~~
cpayne
If you read the criteria for _bidder registration_ ($200,000 deposit) I
wouldn't be too worried.

------
wmf
Since you get a bill of sale from the US government I guess these will be the
cleanest Bitcoins ever.

~~~
Alupis
Street value of approx: $17,330,000 USD

I'd wager it will sell for much less, likely 3/4 of that street price.

~~~
ssharp
It's not a great look for the BitCoin market if you can buy in bulk at 75%.

~~~
Alupis
Not really. Seized properties often sell for less than half of the market
value... doesn't mean the property is worth half now... it means the
government can't be bothered to take on the responsibility of selling the
property at full retail --

ie. they just want to get rid of the assets and move on.

~~~
egwor
but it does show that bitcoins are NOT considered the same thing as cash. You
would not see the case where JPY or GBP or EUR would be sold off at this level
of discount...

~~~
marincounty
Where can I walk in with 29,0000 bitcoin x market value and walk out with
suitcases full of $100 bills? I wonder if there is any legal implications of
the federal government selling Bitcoin. I always felt the majority of bitcoins
were mined illegially(on company, and university mainframes--without consent).
I'm surprised they are asking for a deposit in cash?

~~~
fleitz
Let me clear up the legal implications for you:
[http://en.wikipedia.org/wiki/Sovereign_immunity#Federal_sove...](http://en.wikipedia.org/wiki/Sovereign_immunity#Federal_sovereign_immunity)

------
gojomo
I love this part:

 _The USMS will not transfer bitcoins to an obscene public address, a public
address apparently in a country restricted by the Office of Foreign Assets
Control (OFAC), a public address apparently associated with terrorism, other
criminal activities, or otherwise hostile to the United States._

So, be sure to pre-calculate your auction-winning vanity-address to be some
simple transformation of your obscene/anti-American message, rather than the
message itself!

~~~
13throwaway
1osamasjnHLJ1jwuXq5dZxQ7UZCgHe66N

------
notindexed
[https://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5G...](https://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX)

[https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN4...](https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH)

~~~
sp332
Whoa, almost the whole balance from that first address was just moved to here
[https://blockchain.info/address/1Ez69SnzzmePmZX3WpEzMKTrcBF2...](https://blockchain.info/address/1Ez69SnzzmePmZX3WpEzMKTrcBF2gpNQ55)

~~~
danielweber
USG almost assuredly hired a few Bitcoin experts to help them handle this.

------
chuckup
This is only what is currently being minted every 8.2 days. I predict the
price will go up due to the media attention - this is a very cool story,
expect lots of news coverage. When/if a Silk Road based movie ever comes out,
expect "the moon".

You couldn't ask for a better story - the opposite of what Bitcoin _really_ is
when you think of it - finance, computers - stuff that bores the hell out of
most people. Instead: drugs! conspiracy! magic internet money! Now, add
"Satoshi" \- mysterious inventor who's vanished. Seriously, you can't write
this stuff!

------
viraptor
Could someone explain the logic behind the price drop? Is that related to the
fact that those 30k will be sold below the standard price? For some reason it
seems counter-intuitive for me, since the money connected to those coins have
been already paid once (whether for mining them or via exchange). So in
practice it's more like they've been actually paid for ~twice now, so the
effect "should" be opposite.

~~~
sillysaurus3
There is no logic. Searching for logic behind bitcoin's price is a fool's
errand. You'll trick yourself into believing things that aren't true, because
the price of bitcoin is determined by a small number of large players. Those
large players enter or exit the market for any reason they feel like. It's
gambling, plain and simple. News announcements serve as a trigger for the
gamblers to initiate gambles (exit/enter the market).

Until bitcoin achieves a critical mass among both consumers and merchants,
searching for reasons for a price drop or jump may as well be numerology.

The trouble with opinions about the price of bitcoin is that they're very hard
to disprove, because no one is privy to the information that's causing the
price fluctuations except the people causing the price fluctuations. But
remember, that's my point: you won't ever know why the price rises or falls.
It's beyond your knowledge, unless your friends include those who are actually
moving the price.

Until the price of bitcoin is determined by more than a couple hundred people,
you simply cannot reason about its price in any meaningful way. Even talking
about "downward price pressure due to mining costs" is mistaken at this point.
The price of bitcoin is a function of the whims of those couple hundred
people.

~~~
tinco
There is logic. All speculative trading is driven by two motivations, fear and
greed. The balance of these two decides the price.

Before this announcement the balance was about $650. It means that greedy
people think it will go higher than $650, and fearful people think it would go
lower.

Now comes this announcement. About 30.000 bitcoins wil sometime in July come
into the hands of someone who will have paid significantly below market rate
for them.

Is this good news or bad news for the market? It's bad of course. In the most
optimum case, the buyer will keep the bitcoin, and the market won't move at
all. In the worst case, the buyer will sell all the bitcoin the second he
receives the bitcoin.

Between these two extremes there is a range of possibilities, but you can see
that the range is from 0 to negative something, so overall we predict a
negative outcome for the market.

So, the fearful people will become a little stronger, and the balance will
drop accordingly.

~~~
sillysaurus3
_Is this good news or bad news for the market? It 's bad of course._

This is exactly what I meant by "you'll fool yourself into believing things
that aren't true." You cannot reason about the price of bitcoin in terms of
fundamentals. Not right now; not when the price is a function of a few hundred
people (some of whom are maliciously manipulating the market).

I've been closely watching how the price of bitcoin reacts to announcements
since mid last year. The price goes up? People come up with a reason that
makes sense. The price goes down? People come up with a reason. The price has
gone down; you've come up with a reason, and lo, it seems to make sense.
Except none of these reasonings make any sense whatsoever because _the market
isn 't logical_. It doesn't pay any attention to your theories, or mine, or
anyone else's. The price inexorably follows from the actions of fewer than a
couple hundred people, almost all of whom are trying to prey off each other.
That's the game. Buy to raise the price; sell after others follow your lead.

You can craft a theory that makes sense for any possible upswing or downswing.
But what fools we were to think our theories mattered back in November, when
the price was almost entirely due to Mt. Gox's market manipulation!

My opinion in this matter has been forged by the heavy hammer of experience.
Don't make my mistake; don't delude yourself by having the hubris to think you
alone can reason your way around an irrational gambler's market. Here's how it
will go. You'll make some money, and you'll feel smart and elated. Then you'll
risk a little bit too much on your "insight" and watch as it crumbles beneath
your feet and you lose some money. But not too much; you're smart, after all.
But then you'll hear stories of others who have fared Bette than you, and
you'll start to get a bit jealous. _It 's just a matter of experience,_ you'll
tell yourself. _I 'll do better now that I know not to do that again._ So
you'll try a new, more insightful theory. A theory based on sound
fundamentals. And then you'll make a bunch of money, and you'll think you've
got it all figured out. So you'll wager even more on your theory (which,
somehow, everyone else has seemingly overlooked, but Nevermind that, our
theory is based on logic so it must be correct!) and then when the market's
irrationality catches up to your reality, you'll lose big.

Greed does indeed drive the market. And greed doesn't play by fair or logical
rules.

~~~
tinco

        This is exactly what I meant by "you'll fool yourself into believing things that aren't true." You cannot reason about the price of bitcoin in terms of fundamentals.
    

Wherever there is perceived value, you can reason about fundamentals, it is
just how the world works.

    
    
        But what fools we were to think our theories mattered back in November, when the price was almost entirely due to Mt. Gox's market manipulation!
    

You invested in a time of great volatility, and got hurt. That doesn't mean
the game is broken. That MtGox manipulated the market is irrelevant. If
something appreciates 10x in 3 months, that's volatile and it's your fault for
investing when you did not know the full reason behind that volatility.

I don't say "It's bad of course" as some sort of guess, it's pure logical
reasoning. I am not saying it is _necessary_ that the balance goes down.
Combine the information of the logical effect of this event with the _actual_
effect that lies in the _past_ and you can say that there was a _likely_
relation.

~~~
sillysaurus3
I think you're mistaken about what a "fundamental" is. Bitcoin is speculation.
It's also the kind of speculation where you'll never be able to logically
deduce the expected outcome, because you'll never have the proper information
to make correct decisions (unless you're friends with someone like Karpeles).

Here's an example of a fundamental:

 _By looking at the economics of a business, the balance sheet, the income
statement, management and cash flow, investors are looking at a company 's
fundamentals, which help determine a company's health as well as its growth
prospects. A company with little debt and a lot of cash is considered to have
strong fundamentals._

There are more kinds of fundamentals, of course. But all of them have a common
theme: publicly available information, or logical reasoning (which depends on
having publicly available information).

Bitcoin's market value is determined by insiders who hide all information from
you. Therefore, there are no fundamentals right now. Not until the price is
determined by something other than people like Karpeles.

 _You invested in a time of great volatility, and got hurt. That doesn 't mean
the game is broken. That MtGox manipulated the market is irrelevant._

I doubt most investors would agree. Gamblers, perhaps, since at that point
"the game" is literally gambling, not investing.

------
0x0
Will they announce the winning bidders?

Those coins will then be linked to the winners' identities permanently in the
block chain. Talk about painting a target on oneself.

~~~
GigabyteCoin
Does Donald Trump or Bill Gates have to shy away the fact that they have
seemingly endless amounts of money?

~~~
0x0
Can you irrevocably transfer all their money in seconds to an anonymous &
untouchable account by coercing them to give up, or hack in and steal, a
private cryptokey consisting of a handful of bytes?

~~~
adamio
Well we know the US Government has them, so I presume they'd be a strong
target now

------
GigabyteCoin
Is anybody else surprised by the urgency with which they seem to be selling
these coins?

They only made the announcement today and you have to be registered to bid by
this coming monday?

Is this typical of government auctions?

~~~
samplonius
The gov't announced months ago that unclaimed assets seized from Silk Road
would be auctioned. The waiting period has now expired.

And why shouldn't it be fast? There is a single person who holds over $1B USD
of Bitcoin, so big Bitcoin positions are normal. If you have the US money on-
hand, this is a 5 minute decision. No need to drag it out.

The real story is the losers dumping their Bitcoin positions as the market
goes down, while the smart people buy up those coins too. I guess the forums
and IRC channels are full of people telling you to sell cheap. And next week,
they will be telling you to buy high.

------
Benferhat
The price of bitcoins has already dropped 10% since the news.

------
Intermernet
Is there much difference between this, and if the DEA had busted some meth
dealers who had a bunch of gold sitting around? Or if the FBI had busted some
mafia family with billions in property?

What are the precedents here? Does this style of US government confiscation /
sale have any analog in realms outside the net?

I'm honestly curious, I know that governments are completely within their
(self defined, but generally accepted) rights to profit from these seizures,
but what are the implications of profiting from the proceeds of crime, and has
this raised it's head in more "traditional" areas before?

------
saganus
Anyone care to take a guess as to how will this affect Bitcoin price?

~~~
drcode
I think this is the best publicity imaginable. I can't see any reason why the
price wouldn't go through the roof over the next month, but bitcoin prices are
tough to predict.

~~~
tlrobinson
Can you explain why?

~~~
danielweber
If you compare to his other comment on this page, I'm pretty sure he's joking,
and taking the "this is actually good news" meme to its natural crazy end.

~~~
drcode
No, I actually am pretty bullish on bitcoin at the moment, though who can say
what will really happen.

~~~
saganus
That's kind of why I asked. Although I have no Bitcoin assets, if I did I was
thinking that it could go either way.

It could help legitimize the coin, for some definition of legitimize, or it
could tank the price if people feel a sizable chunk of those coins are going
to be sold at discount.

It did tank ~10%, but maybe we will see a rally in the weeks to come?

------
JacobAldridge
_" All bids must be made in U.S. dollars."_

Which dents my plan of offering to buy each of the BTC 3,000 blocks with an
offer of BTC 2,000 each.

------
DogeDogeDoge
$200 000 seems to be a big anti troll bid blocker. But i bet someone is going
to get rich and buy them way below market price.

~~~
danielweber
Almost by definition, they will be sold at "market price." It's the "market
price" of buying 3K blocks of Bitcoin as opposed to the "market price" of the
daily Bitcoin exchanges.

If the government somehow seized a giant comic book collection, they wouldn't
try to sell them off individually on eBay. They would auction it off in 1
block, and interested parties who know how to maximize its value would bit on
it.

It's basically "Storage Wars."

------
CoreSet
Probably a dumb question, but I seem to have trouble understanding the post:
Are the bitcoins being sold in one discreet chunk (you buy the entire wallet
or nothing) or are they being parceled out (it mentions auctioning off
blocks)?

Also, is it possible to use these bitcoins in a transaction, or would you
simply be paying for the still-encrypted wallet?

------
deadfall
They should try [http://coinbase.com](http://coinbase.com) ($591.11 right now)

~~~
NAFV_P
I've been watching [0] for the past ten minutes or so.

Fucking hell, individual instances of radon-222 are more predictable.

[0] [http://bitcointicker.co](http://bitcointicker.co)

------
smoorman1024
They could probably get more value out of the bitcoins by selling them slowly
in the market rather than issuing a block sale. That's like Ackman running to
the market and yelling for sale 20,000,000 shares of JCP. He instead slowly
acquires or divests his stake.

------
Glyptodon
This seems insane. Shouldn't it be cheaper and more efficient to just sell
them on an exchange or something? (Over time, even, rather than all at once,
obviously.)

"Let's sell them all in blocks of 3000 and require a deposit of $200k to bid"
... yeah ...

~~~
jarrett
If you were the US Marshals, would you entrust the government's money[1] to an
unregulated Bitcoin exchange?

[1] As to whether the government is morally, ethically, or legally entitled to
the seized properties, I have no opinion. I don't know anything about the
situation.

~~~
Omniusaspirer
I'm not sure one could possibly argue that this is morally or ethically
"right". Legally it's apparently a-ok though.

These coins were technically owned by all the people with accounts on the Silk
Road and were not necessarily going to be used for illegal transactions. For
all we know this is basically government stolen money from some guy who wanted
to buy a sandwich with Bitcoin just for the laughs and to say he did.

------
lutador1986
Here's a crowdfunded bid to win the bitcoin:
[https://news.ycombinator.com/item?id=7889904](https://news.ycombinator.com/item?id=7889904)

------
Rulero
This is very shocking.

So the government makes it illegal to sell narcotics, regardless, some
individuals take a risk and deal drugs to be able to sustain themselves or
finance a lifestyle of their choice.

Now the government start prosecuting someone, seize their assets (Which were
turned over through illicit methods) and release this dodgy money back to the
market.

What's more disturbing about this whole scenario is the fact that someone is
getting done over. What if the government kept prosecuting dealers and then
selling their assets back to the market? Those assets should be "destroyed" \-
just the way narcotics are destroyed when dealers get caught.

This is a joke.

~~~
danielweber
If the government found a drug dealer with a suitcase full of Canadian
dollars, the government wouldn't destroy them.

Bitcoins aren't what made Silk Road illegal.

------
imrehg
"Transfer Fees. Any transfer fees associated with the transfer of the bitcoins
will be paid by the buyer."

Dear officers, these are zero fee transactions, if there were any :)

------
mschuster91
Insane. The USMS with this announcement _massively_ devalued it.

It would have been far better to quietly sell these BTC evenly spread across
the major exchanges at market prices.

~~~
danielweber
Their job isn't to protect the Bitcoin market.

If you have a plan to get 98% of the value of these Bitcoins and think that
someone else will only get 70%, then dig through your couch cushions to raise
15 million bucks and outbid the other guy.

These are totally normal market mechanisms.

------
lifeformed
Why must they sell all of them as one bundle? Can't they sell smaller amounts
to many different buyers? Or is that too complicated?

------
cinitriqs
So... they are selling off "illegaly claimed" BTC now? Ah but of course, they
have been doing the same thing with everything else for years... (supporting
their own departments, making them able to buy tanks, cars, houses and plenty
more).

Nothing new here, carry on, carry on!!!

------
kyledrake
I doubt these are going to be liquidated once purchased. Someone is going to
buy them cheaper than market rate and probably go long with them.

------
codeddesign
wait...so you have to deposit $200k in order to bid???

~~~
yellowapple
Well considering that's around $16.7 million, I'm not surprised.

What's more amusing is that the auction is "cash only".

~~~
jarrett
I take that to mean cash in the sense of liquid assets, as opposed to
something leveraged or what have you. Not cash in the sense of a briefcase
full of cash.

~~~
sp332
_TERMS OF SALE: Cash. The bid must be an all cash offer._

You have to wire the money, so it's not physical stacks of currency. But it
does have to be US dollars.

~~~
hueving
Yes, that's what he meant by liquid assets.

------
adambom
Someone should steal these before they can sell them

------
TamDenholm
Surely this creates precedent of US government recognised legitimacy? While it
might hurt the markets in the short run, i reckon it'll overall help bitcoin
as a currency in the long term.

~~~
adestefan
It does nothing of the sort. All this does is confirm that Bitcoin is property
that can be sold which is exactly what the government has said previously.

------
bsder
It would be funnier if the bitcoin exchanges blocked those blockchains as
having been permanently compromised.

It would prevent the feds from having an incentive to seize bitcoins.

~~~
leorocky
> It would prevent the feds from having an incentive to seize bitcoins.

No it wouldn't. Law enforcement seizes to deprive criminals of gain from
illicit activities, not to make a profit. They sell because they can.

It also wouldn't be funny. The US Marshall's service is doing what it is
supposed to. If you have problems with federal law enforcement try a country
that lacks a professional police force.

~~~
ansimionescu
I find it hilarious that someone had to explain this.

~~~
saraid216
It's Hacker News and the government is involved. Of course it needed to be
explained.

