

Bitcoins Seized by DEA - ferdo
http://letstalkbitcoin.com/post/53700133097/users-bitcoins-seized-by-dea

======
cs702
As an early adopter of Bitcoin, I'm happy to see this, because it's a sign
that Bitcoin is on the path to more mainstream US market adoption. As more US
citizens get comfortable with and start using Bitcoin, US law-enforcement
organizations gradually will learn to use it, gradually will learn to monitor
its use by others, and, yes, gradually will learn to seize it whenever it's
used for criminal activity.[1] This is not a bad thing.

\--

[1] Bitcoins can be seized -- just like cash, gold, a file stored in a hard
drive, or any other physical or digital asset in a person's possession.

~~~
nilved
Considering the entire point of bitcoin is circumventing seizure, that sounds
like a bad thing to me.

~~~
tlrobinson
"the entire point of bitcoin is circumventing seizure"

[citation needed]

There are many reasons to want to use Bitcoin.

Plus it _is_ much more seizure resistant than centralized systems like banks.

~~~
sliverstorm
_[citation needed]_

Yeah, the more I read about bitcoin in the media, the more I've decided people
are projecting on the currency what they _want_ it to be about.

 _The entire point of Bitcoin is anonymity!_

 _The entire point of Bitcoin is to be able to do things that sound
suspiciously like laundering money!_

 _The entire point of Bitcoin is to circumvent seizure!_

I just wonder what will be next on the list.

~~~
rtpg
I've always wondered why people would use Bitcoin to launder money. I mean, in
a "real" investigation on the fact, Bitcoin's blocktree serves as an
infalsifiable ledger that can trivially be analysed by a computer. Would make
laundering harder, not easier in my opinion.

~~~
mikegioia
I'm just speculating, but I'd imagine it's easier to "wash" bitcoins then it
would be to wash other currency.

~~~
dragontamer
Yeah, but it is also far far easier to unravel the washing of bitcoins.

Every transaction in BTC is recorded in the public blockchain _forever_. A
good enough computer has infinite amounts of time to analyze the transactions
of BTCs after the fact.

I dare say it is impossible to properly launder money with BTCs as it is.
(ZeroCoins or other protocol extensions notwithstanding)

------
teraflop
One thing's for sure, it'll be interesting to follow the blockchain and see
what eventually happens to that BTC. Does the government leave it in a wallet,
or cash it out with Coinbase, or what?

~~~
jlgreco
One of the neat things about bitcoin that hasn't been talked a lot about is
that bitcoin makes it possible (with a little planning) to create seizure and
"civil forfeiture" resistant money. This can be done if you want to save your
money for later (perhaps for your defense, or for after your eventual
release), or alternatively merely because you believe that civil forfeiture is
unethical and dangerous to society as it accelerates the militarization of the
police.

Imagine a system where the private material of a wallet is shared among one or
more trusted individuals (using secret sharing) who are under instructions to
cooperate with each other in destroying or moving the money if you are ever
arrested or fail to check in after a certain period of time. If your aim is to
merely destroy the money, you could also get away with having a secret VPS
running somewhere that does the deed (it would not matter if it were later
found).

If you go with the "destroy" route, then you would not even be destroying the
_evidence_ from an ethics standpoint (thanks to the nature of the blockchain).
However the authorities, upon being denied their "prize", would undoubtedly
throw a childish hissyfit and assert that you destroyed the evidence anyway.

~~~
anigbrowl
_Imagine a system where the private material of a wallet is shared among one
or more trusted individuals (using secret sharing) who are under instructions
to cooperate with each other in destroying or moving the money if you are ever
arrested or fail to check in after a certain period of time._

Don't you think that people involved in money-laundering already engage in
such conspiracies? There's a reason they call it ' _organized_ crime.'

~~~
jlgreco
Uh, yes? Of course? That seems obvious.

I'm not sure what you are getting at here.

~~~
anigbrowl
It's naive to assume the government wouldn't be able to figure out such an
obvious scheme. I disapprove of civil forfeiture laws as a matter of policy,
but your proposed mechanism for outwitting them is absurd.

~~~
jlgreco
They would of course "figure it out". Actually, there wouldn't even be
anything to figure out in the first place, it would be painfully obvious what
had happened and they would strike out at you for doing it. Your bitcoins are
transferred out of your wallet hours after you are arrested but before you
give them the passphrase to your wallet... what is there to figure out?

You seem to be _entirely_ misunderstanding what I am proposing.

~~~
anigbrowl
I don't think so. You seem to be entirely overestimating the effectiveness of
your proposal.

~~~
jlgreco
How is destroying bitcoins not an effective way of ensuring that nobody has
those bitcoins? How is that not effective?

You seem to be under the impression that I think the authorities would not
realize what happened, or would not strike out at you for doing it. I am
suggesting neither of those things. They can be as angry as they want to be,
but that will not un-transfer those bitcoins. Hell, they can beat you with a
wrench for the rest of your natural life but that will not get the bitcoins
back.

You _plainly_ do not understand what I am suggesting. _" That would be
organized crime and authorities are good at recognizing organized crime"_ is
not a coherent response. Speak plainly, what _specifically_ do you think the
flaw is?

~~~
coldtea
> _They can be as angry as they want to be, but that will not un-transfer
> those bitcoins. Hell, they can beat you with a wrench for the rest of your
> natural life but that will not get the bitcoins back_

That's very comforting.

~~~
spiritplumber
Actually it is, because it means that since they provably have no way to
coerce you, anything they do can be shown to be petty revenge, and that's
really the worst way to support one's case.

Governments are used to having a stick to support their arguments with; take
it away, and you will find them very bad at making an argument.

~~~
coldtea
> _Actually it is, because it means that since they provably have no way to
> coerce you, anything they do can be shown to be petty revenge, and that 's
> really the worst way to support one's case._

Petty revenge is the bread and butter of lesser bureaucrats in government.

------
hawkharris
I have a layman's question about Bitcoin for people who know more about the
currency: Who or what controls the overall monetary policy for Bitcoin?

In other words, is there some sort of digital central bank that controls
inflation by deciding how many Bitcoins are released per area?

~~~
thomasbk
The mining pools (groups of miners who've joined forces) control it in
practice. This effectively gives a very small number of people control over
significant things, like transaction fees.

~~~
ensignavenger
But if the managers of the mining pools were to do anything too overt, those
who contribute computing power to them could (and probably would) quickly pull
their support. At least in theory.

~~~
thomasbk
Those who contribute share in the profits of the pool! Most things that are in
the interest of the pool are in the interest of the miners.

Also, as hardware gets more specialized, the cost to entry gets higher and
power concentrates.

------
colanderman
USER'S, not USERS'.

 _Very meaningful_ difference here.

~~~
ferdo
You're correct. Thanks for catching it.

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fastball
Wouldn't this being a "honeypot", as suggested in the article, be an instance
of entrapment, which is illegal?

~~~
nilved
No, it's only entrapment if you wouldn't have commit the crime with someone
else. Buying drugs from an undercover cop, which is basically what the OP
describes, is not entrapment.

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MWil
As a bar prepping J.D. at the moment, I just want to see how this plays out in
a courtroom where the prosecution relies too heavily on bitcoins as their ID
strategy. I'll totally let them try and explain this to a jury...

~~~
gamblor956
Probably just as well as any other form of circumstantial technology-based ID:
IOW, it depends on the expert witnesses and the presentation of other
identifying evidence by the prosecution.

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mikemoka
The coins of a specific user have been sized, why this sensationalistic title?

~~~
mxxx
lol, you interpreted it to mean that bitcoin itself had been seized? do you
freak out and check your wallet when you read a headline that says "cash
seized by authorities", too?

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chmike
I have the impression that the possibility to track bitcoins history make it
less anonymous than real money. There is a thin invisible string linking all
bitcoin holders together and that can be followed. With honeypots, and help of
NSA like methods it is possible to identify the people involved. As soon as
bitcoins are used to buy goods to be delivered.

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gwern
If anyone is curious, the guy seems to be the SR vendor 'Casey Jones'
[http://www.reddit.com/r/SilkRoad/comments/1gxiv7/srrelated_b...](http://www.reddit.com/r/SilkRoad/comments/1gxiv7/srrelated_bitcoin_seizure/caoxlmg)

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Uperte
Probably honeypot operation. I wonder if DEA would auction those coins like
all assets that get seized.

~~~
gwern
No, it was probably fallout from a controlled delivery or something. There
have been multiple controlled deliveries in the past for SR users and so far
zero honeypots or other fancy traps (see my collation of arrests/prosecutions
in
[http://www.gwern.net/Silk%20Road#safe](http://www.gwern.net/Silk%20Road#safe)
).

~~~
gwern
Although he _is_ a vendor, so who knows:
[http://www.reddit.com/r/SilkRoad/comments/1gxiv7/srrelated_b...](http://www.reddit.com/r/SilkRoad/comments/1gxiv7/srrelated_bitcoin_seizure/caoxlmg)

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bdcravens
Someone buys drugs and gets caught, and has property seized. How audacious.

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greenlakejake
Yellow letters on an orange background? Yuck.

