Thoughts on FBI dumping Silkroad BTC

empoweoqwj

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Quote from: dg2010 on January 06, 2014, 05:17:36 AM

Like the proceeds of any crime they will almost certainly be sold.

If they sell on an exchange it will cause immediate panic the minute those coins move into MtGox/Bitstamp.

However that won't happen. There are no reputable U.S exchanges yet and no regulation around their exchange. Instead the coins will go to an auction like every other seized asset so there won't be an immediate cause for concern. What happens after they bought depends on who is buying them

At an auction, they would most likely be sold off in "lots" to get the maximum revenue.

dg2010

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Like the proceeds of any crime they will almost certainly be sold.

If they sell on an exchange it will cause immediate panic the minute those coins move into MtGox/Bitstamp.

However that won't happen. There are no reputable U.S exchanges yet and no regulation around their exchange. Instead the coins will go to an auction like every other seized asset so there won't be an immediate cause for concern. What happens after they bought depends on who is buying them

T.Stuart

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Quote from: BurtW on January 05, 2014, 07:04:15 PM

Quote from: mgburks77 on January 05, 2014, 05:03:27 PM

Quote from: Krellan on January 05, 2014, 01:41:46 AM

I think the FBI will keep it, especially if the trial leads to a conviction ("drug money" and other seized assets are kept by the government upon conviction, providing a nice revenue stream that many say leads to overzealous enforcement of drug laws when the local police agency is feeling a little poor).

It could provide the USA with a storehouse of Bitcoin, in much the same way as Fort Knox provides a storehouse of physical gold. If Bitcoin takes off in the future and becomes more widely accepted, this could prove quite useful to the government as an asset.

^^This

Read the thread. The FBI has already said they are going to sell them.

"Err... this is a bit new for us... we'll probably sell them" is an offhand comment made to a hack before the Senate hearing, latest run up, etc. No-one knows yet what will happen to those coins.

BurtW

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Quote from: mgburks77 on January 05, 2014, 05:03:27 PM

Quote from: Krellan on January 05, 2014, 01:41:46 AM

I think the FBI will keep it, especially if the trial leads to a conviction ("drug money" and other seized assets are kept by the government upon conviction, providing a nice revenue stream that many say leads to overzealous enforcement of drug laws when the local police agency is feeling a little poor).

It could provide the USA with a storehouse of Bitcoin, in much the same way as Fort Knox provides a storehouse of physical gold. If Bitcoin takes off in the future and becomes more widely accepted, this could prove quite useful to the government as an asset.

^^This

Read the thread. The FBI has already said they are going to sell them.

mgburks77

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Quote from: Krellan on January 05, 2014, 01:41:46 AM

I think the FBI will keep it, especially if the trial leads to a conviction ("drug money" and other seized assets are kept by the government upon conviction, providing a nice revenue stream that many say leads to overzealous enforcement of drug laws when the local police agency is feeling a little poor).

It could provide the USA with a storehouse of Bitcoin, in much the same way as Fort Knox provides a storehouse of physical gold. If Bitcoin takes off in the future and becomes more widely accepted, this could prove quite useful to the government as an asset.

^^This

BurtW

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Quote from: dnaleor on January 05, 2014, 03:01:34 AM

I think a decentralized list is possible Wink

The point is that any lists of "good", "bad" and "ugly" coins is a bad idea. Hopefully we will quickly implement changes that will prevent lists. Things are being talked about and worked on. Here for example:

https://bitcointalksearch.org/topic/m.4302095

dnaleor

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Quote from: wachtwoord on January 04, 2014, 08:25:00 PM

Quote from: dnaleor on January 04, 2014, 04:53:18 PM

Quote from: BurtW on January 04, 2014, 03:41:12 PM

Quote from: wachtwoord on January 04, 2014, 01:16:02 PM

Don't EVER sacrifice fungubility of Bitcoin. EVER. FOR ANY REASON.

This is the most important and pretty much only point made in this thread. An attack on the fungibility of Bitcoin is currently the only real threat to Bitcoin I see from LE, GOV or from within.

It was just a thought experiment Wink

I like the purity of Bicoin as it is now...

But think about a world were government tries something like coinvalidation, bitcoins are stolen from the regular people for "legal" reasons, and bitcoin taxes are collected by the government.
In that case, I think it is fair to try to invalidate the colected taxes and the deny the coin validation by hard forking Bitcoin and implement the "PureBitcoin"

We could create a list (yes, I know... This will be difficult to implement on a peer 2 peer basis) which excludes certain adresses and the coins send to those adresses are not accepted by the network and send back to the previous address.
So we create a parallel PureBitcoin where the people do not pay taxes and bitcoins are not confiscated by the government.

Naturally, the original bitoin will still exist, and an exchange rate between the 2 will be established. The market will decide which coin is preferred.

No, creating a list leads to centralization and a weak point.

I think a decentralized list is possible Wink

arepo

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this statement is false

Quote from: empoweoqwj on January 05, 2014, 01:58:52 AM

Why is speculating on their action futile, especially since they have publicly announced what their action will be ....

this is precisely what i mean. perhaps "speculating", having two meanings, was not the best word to use to avoid this miscommunication Tongue

empoweoqwj

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Quote from: arepo on January 05, 2014, 01:56:13 AM

Quote from: empoweoqwj on January 05, 2014, 01:53:54 AM

Quote from: Krellan on January 05, 2014, 01:41:46 AM

I think the FBI will keep it, especially if the trial leads to a conviction ("drug money" and other seized assets are kept by the government upon conviction, providing a nice revenue stream that many say leads to overzealous enforcement of drug laws when the local police agency is feeling a little poor).

It could provide the USA with a storehouse of Bitcoin, in much the same way as Fort Knox provides a storehouse of physical gold. If Bitcoin takes off in the future and becomes more widely accepted, this could prove quite useful to the government as an asset.

From the coindesk article:

"The FBI has told Forbes that they will sell their bitcoin holdings after Ulbricht’s trial."

thank you. the likely outcome of this issue is mainly resolved. the other discussion in this thread is worthwhile but speculating on the FBI's actions is futile at this point.

Why is speculating on their action futile, especially since they have publicly announced what their action will be ....

arepo

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this statement is false

Quote from: empoweoqwj on January 05, 2014, 01:53:54 AM

Quote from: Krellan on January 05, 2014, 01:41:46 AM

I think the FBI will keep it, especially if the trial leads to a conviction ("drug money" and other seized assets are kept by the government upon conviction, providing a nice revenue stream that many say leads to overzealous enforcement of drug laws when the local police agency is feeling a little poor).

It could provide the USA with a storehouse of Bitcoin, in much the same way as Fort Knox provides a storehouse of physical gold. If Bitcoin takes off in the future and becomes more widely accepted, this could prove quite useful to the government as an asset.

From the coindesk article:

"The FBI has told Forbes that they will sell their bitcoin holdings after Ulbricht’s trial."

thank you. the likely outcome of this issue is mainly resolved. the other discussion in this thread is worthwhile but speculating on the FBI's actions is futile at this point.

empoweoqwj

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Activity: 518

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Quote from: Krellan on January 05, 2014, 01:41:46 AM

I think the FBI will keep it, especially if the trial leads to a conviction ("drug money" and other seized assets are kept by the government upon conviction, providing a nice revenue stream that many say leads to overzealous enforcement of drug laws when the local police agency is feeling a little poor).

It could provide the USA with a storehouse of Bitcoin, in much the same way as Fort Knox provides a storehouse of physical gold. If Bitcoin takes off in the future and becomes more widely accepted, this could prove quite useful to the government as an asset.

From the coindesk article:

"The FBI has told Forbes that they will sell their bitcoin holdings after Ulbricht’s trial."

Krellan

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I think the FBI will keep it, especially if the trial leads to a conviction ("drug money" and other seized assets are kept by the government upon conviction, providing a nice revenue stream that many say leads to overzealous enforcement of drug laws when the local police agency is feeling a little poor).

It could provide the USA with a storehouse of Bitcoin, in much the same way as Fort Knox provides a storehouse of physical gold. If Bitcoin takes off in the future and becomes more widely accepted, this could prove quite useful to the government as an asset.

gogxmagog

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Ad maiora!

what if they treat the BTC like seized drugs? just delete his wallet and wipe his hard drive? I don't actually think this will happen, but since BTC is in regulatory limbo (kinda) I can't see the FBI doing much more than leaving it in cold storage. Why would they participate in a "grey" economy? especially when they know the whole BTC community is watching very closely.
anyhoo, they have to convict DPR first. Then figure out how to actually use BTC, which I'm guessing they are relatively clueless about still. which could lead us back to deletion of wallet (only by accident this time, lol)
I would actually LOVE to see the FBI accidentally delete all those BTC.

empoweoqwj

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Quote from: addictivegaming on January 04, 2014, 08:41:22 AM

I think it's pretty clear that they got a hold of the coins as a result of a deal with DPR. He was stupid enough to get caught doing something illegal, but I don't think he was stupid enough to not properly encrypt his wallet.

If I was him, I'd be scrambling to make all the deals I could to avoid spending the next 40 years in prison.

I Just read this article:

http://www.coindesk.com/fbi-proves-seizing-bitcoins-isnt-owning/

Seems they probably don't have his encrypted wallet at the moment. Like you say, that's a great bargaining chip!

BurtW

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Sure. If they can deposit it at their bank and convert it to USD directly they will do that otherwise they will auction them off. If they confiscate pesos they just deposit them. If they confiscate gold they auction it off. It will depend on the situation two or so years from now.

T.Stuart

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Quote from: BurtW on January 04, 2014, 09:17:02 PM

The FBI will not care what "Bit coins" are. They will follow protocol. They will find out what they are worth when then sell them at public auction. That is what they do.

Can you answer the currency question?

BurtW

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The FBI will not care what "Bit coins" are. They will follow protocol. They will find out what they are worth when then sell them at public auction. That is what they do.

wachtwoord

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Quote from: dnaleor on January 04, 2014, 04:53:18 PM

Quote from: BurtW on January 04, 2014, 03:41:12 PM

Quote from: wachtwoord on January 04, 2014, 01:16:02 PM

Don't EVER sacrifice fungubility of Bitcoin. EVER. FOR ANY REASON.

This is the most important and pretty much only point made in this thread. An attack on the fungibility of Bitcoin is currently the only real threat to Bitcoin I see from LE, GOV or from within.

It was just a thought experiment Wink

I like the purity of Bicoin as it is now...

But think about a world were government tries something like coinvalidation, bitcoins are stolen from the regular people for "legal" reasons, and bitcoin taxes are collected by the government.
In that case, I think it is fair to try to invalidate the colected taxes and the deny the coin validation by hard forking Bitcoin and implement the "PureBitcoin"

We could create a list (yes, I know... This will be difficult to implement on a peer 2 peer basis) which excludes certain adresses and the coins send to those adresses are not accepted by the network and send back to the previous address.
So we create a parallel PureBitcoin where the people do not pay taxes and bitcoins are not confiscated by the government.

Naturally, the original bitoin will still exist, and an exchange rate between the 2 will be established. The market will decide which coin is preferred.

No, creating a list leads to centralization and a weak point.

T.Stuart

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Activity: 644

Merit: 500

One Token to Move Anything Anywhere

Quote from: BitchicksHusband on January 04, 2014, 08:10:01 PM

Quote from: T.Stuart on January 04, 2014, 08:02:30 PM

Quote from: BitchicksHusband on January 04, 2014, 07:59:34 PM

These are different agencies that barely talk to each other. The US government isn't as corrupt as most of you think. They are required to auction seized assets by law.

This is not about corruption. This is about a potentially huge game-changing financial technology arriving much faster than anyone is anticipating.

Do you honestly think they will just auction them like any old junk confiscated from criminals?

Until they feel like they understand Bitcoin properly (which could take a while) those coins will not go anywhere.

1. US agencies generally don't conspire with each other in grand plots. They might ask for help on a single given issue (one arrest), but they don't scheme to invent new rules. "Hey, Senator, this is so-and-so from the FBI. I have these coins here and we don't want to auction them. I want you to hold a hearing with Treasury, DHS and SS and, oh yeah, make sure the SS guy is against it to make it look good. And let's have some guy tie it to child porn for an hour just in case we need to kill it later." <- That didn't happen.

Yes. I am 100% certain that they will follow the law and auction them once the trial is over.

Until the trial is over and DPR is found guilty, these coins will not go anywhere. As soon as he is found guilty, they will be split up into lots and auctioned publicly. I can assure you that this will happen.

But what are Bitcoins? What is the value of a Bitcoin? Is Bitcoin a currency? Tell me, do the FBI auction currency when they confiscate it? What do they do with US dollars?

What if the government decides to classify Bitcoin as a currency? What if the US government classifies Bitcoin as an asset but the Swiss government a currency? I really don't think that the solution to the FBI's coins is going to be as straightforward as you think.

BitchicksHusband

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Quote from: T.Stuart on January 04, 2014, 08:02:30 PM

Quote from: BitchicksHusband on January 04, 2014, 07:59:34 PM

These are different agencies that barely talk to each other. The US government isn't as corrupt as most of you think. They are required to auction seized assets by law.

This is not about corruption. This is about a potentially huge game-changing financial technology arriving much faster than anyone is anticipating.

Do you honestly think they will just auction them like any old junk confiscated from criminals?

Until they feel like they understand Bitcoin properly (which could take a while) those coins will not go anywhere.

1. US agencies generally don't conspire with each other in grand plots. They might ask for help on a single given issue (one arrest), but they don't scheme to invent new rules. "Hey, Senator, this is so-and-so from the FBI. I have these coins here and we don't want to auction them. I want you to hold a hearing with Treasury, DHS and SS and, oh yeah, make sure the SS guy is against it to make it look good. And let's have some guy tie it to child porn for an hour just in case we need to kill it later." <- That didn't happen.

Yes. I am 100% certain that they will follow the law and auction them once the trial is over.

Until the trial is over and DPR is found guilty, these coins will not go anywhere. As soon as he is found guilty, they will be split up into lots and auctioned publicly. I can assure you that this will happen.

Topic: Thoughts on FBI dumping Silkroad BTC (Read 6991 times)