Topic: [2021-07-31] Feds are seizing cryptocurrency from criminals. Now they have to fi (Read 143 times)

Anchorage would not be allowed to do such a thing on their own anyhow.
The procedure is pretty simple, rather than having the USMS held an auction every single time and deal with all those coins once the case is closed and the assets become property of the govement Anchorage will act like an auction house itself, selling the coins with a mandate from the USMC at a certain date at market price and depositing the money. The court then decides where the money goes.

As for the victims, it depends on the case itself, the MtGox drama is a clear case of how messy things can get, there are two possibilities:
- the court orders the reclaimed goods (coins) to be returned, so we won't have any auction and the coins are directly released by whoever seized them
- they decide they can't return the coins and the victims will be reimbursed in $ at the value of the theft and then there will an auction
Probably in a lot of cases they will choose the second as it's far easier to deal with, imagine somebody stole 10 BTC and 50 LTC and the FBI seized 10 000 ETH...

Is this a re-run? Feds do seize crypto for years and they know very well what to do: auction them.
The fact that they've use the services of a proper company to hold the funds securely until they're sold is just a small step forward, but not really worthy of a big fuss.


They'll probably send fiat into DOJ (or whatever) accounts and from there the victims may or may not be reimbursed, just like for any fiat related criminality. I think that nothing has changed on that part.

Sorry, I should've used the proper term ^{[I meant auctioning those]} but my question still stands... What will Anchorage Digital do with those funds, once it has successfully auctioned/liquidated those seized assets?
^{- It doesn't look like they have any plans for giving it back to the victims, am I right?}

@SFR10. Those coins will be auctioned. Any government department are not allowed to sell seized assets in the market on their own behalf.

@dansus021. Yes, one of the U.S. Marshals behind the case versus the Silk Road was said to have sold some of Ross Ulbricht’s coins by himself.

@buwaytress. Tim Draper was one of the winners of the auctions of the Silk Road coins.

After reading the above comments and also the article itself, am I correct in assuming that instead of giving it back to the victims, they're just going to sell it for their own benefits?
^{- If my assumption was correct, then that makes them even worse than the scammers! Where those funds are going to be used?}

i have heard about fbi or some government that sell seized crypto that come from criminal before this news comes out. silk road maybe have dozen of coin that already sell before this.

Actually, yeah, I must have mixed up my faulty memory banks with Ver, SR and MtGox from my early days in this forum 2016 maybe or even earlier when I didn't have this account yet.

As mentioned above, I actually did look in on the last auction I knew of, but prices were ridiculously above market -- this was 2019 and already so much interest.

Anyway, moving on. Feel so dirty mentioning these names =D

Yeah right! About time to throw your tinfoil hat in the garbage!
Most of the SR and SM coins were bought by Tim Draper and Barry Silbert, just in one of the auctions there were 45 bidders, do you really think they would face an auction with the Marshals Service just for a few million at that time?
There have been a lot of those auctions, do you think that with all the eyes of the press on those any billionaire will risk a prison sentence for a few pennies?


Fortunately, I don't recall him winning anything. Maybe some Bcash auction?

If my memory is correct, most of the seized coins from Silk Road were auctioned at rates relatively higher when compared to the prevailing market rates at that time. The only issue is that the coins were sold in slots of 3,000-4,000 coins, so ordinary investors were not being able to bid for them. Only a few dozen whales took part in the auctions and the funds collected as a result of the sale went to the treasury. The Bulgarians were more clever with the coins they seized. They held onto the coins rather than selling them. And right now they have $3 billion worth of coins in government reserves.

Yeah, come on OP, they've had loads of experience. Enforcement have been having crypto auctions for seized assets for a really long time now, even the UK just does it at regular public auction houses on lots (last time I remember seeing them being bid for for higher-than-market prices so it's actually pretty "profitable" for them).

Coins getting more though? Thought as Bitcoin prices go up, the actual coin amounts are getting smaller. SR auction was about 50,000 BTC -- that's over $20 billion today. Anyone remember how much forum members got? Or was it just Roger who bought. Hazy on my memory.

It's easy, just do what they did to the cryptocurrency that they did back when they seize Ross's bitcoins back then, auction it at a really lower price and have the auction an exclusive thing so not everyone except for their friends can get in the market. Or probably sell those cryptos and donate it since they can't add it to their funding.

They know pretty much what to do with them and how to do it, the Marchal Service has auctioned BTC for a long time, the SR bitcoins were sold at an auction in 2015!!!! The only thing that has changed is that the number of cases when coins are seized is growing so rather than auction small amounts every time as they need to be kept separate no matter what they have simply chosen to deal with this through a partner, selling them in an OTC deal at the daily price.
I'm pretty sure the guys from the feds and the DoJ dealing with crimes that involved crypto have more knowledge about them than the co-founder of this company.


Oh really, so we all need their services and store our cryptos in their bank because we're too dumb to do that /s

Feds are seizing cryptocurrency from criminals. Now they have to figure out what to do with it.

Due to a surge of cryptocurrency-fueled crimes, federal law enforcement is seizing a lot of bitcoin. Now the US government is figuring out what to do with all of it.

This week, a small platform for safekeeping cryptocurrency called Anchorage Digital announced it had won a contract from the Department of Justice to store and liquidate digital assets that federal law enforcement seizes following criminal investigations. The government has essentially hired a bank to store and sell billions of dollars worth of forfeited cryptocurrency, including troves of bitcoin and ethereum. Anchorage Digital, which is based in San Francisco, is an obvious choice for a partner, as it’s the first federally chartered bank for crypto.

“​​There’s no traditional bank that actually offers these services because this is extremely complex from a technical perspective,” Diogo Monica, Anchorage’s co-founder and president, told Recode. “It’s very hard to store these safely. In fact, there are many, many stories of people losing access to their bitcoin and other cryptocurrency wallets and just losing access completely to them without the ability to be recovered.”

That the US Marshals Service needs to hire a cryptocurrency company for help is a reminder that, as these kinds of digital assets go mainstream, they’re also becoming more popular with criminals. In fact, as law enforcement shut down illegal cryptocurrency operations, from ransomware schemes to illegal online markets, it’s clear that the US government could hold a very large amount of bitcoin, ethereum, and other cryptocurrency. Accordingly, Uncle Sam might even become a more significant player in the crypto marketplace in the months and years to come.


Read more https://www.vox.com/recode/2021/7/30/22600574/cryptocurrency-bitcoin-ethereum-asset-seizure-crimes-bank-storage-password-department-of-justice