Pages:
Author

Topic: What's next? Procedure for seized BTC funds from Silk Road (Read 5046 times)

legendary
Activity: 896
Merit: 1006
First 100% Liquid Stablecoin Backed by Gold
But who would want to bid for them.  Any thoughts of privacy would be gone since the bidder would fully identify themselves to the FBI.  Only some sort of arbitrage but that means selling them right after buying them.

It's cute that you think you'll be able to buy/sell XBT in any substantial amount without disclosing huge amounts of information about yourself.
If it's not possible to stay even remotely anonymous that takes out one of the major benefits of bitcoin.  Bitcoin needs to retain that aspect if it is going to even remotely challenge gold or silver as a method of anonymous savings.  Coinjoin would do wonders in that regard.  I'm also fairly certain it is possible to buy/sell large amounts just not all at once.
legendary
Activity: 924
Merit: 1132
Hell, I don't care.  I'll go right ahead and disclose information about myself to the FBI.

And, It's nothing they don't know already.  We went over all of this in great boring detail when I got my clearance as a security contractor.  They know exactly who I am.  So does the NSA for that matter.  The Treasury department would be new to me, but not terribly unexpected given some of my specialties.

So, yah, full disclosure.  I'm not a fed, but I do work semi-closely with some subsets of feds. It's even possible that via one of the security contracts I might get called as an expert witness in a Bitcoin case.

Only problem is, I doubt that I'd be able to scrape up enough money at one time to make any significant purchase.  Hmm, well, there is this one job that might make me US$10K by the end of the year, but it's a bit of a long shot. Still, that's not a very big drop in a $20M (or possibly $60M) bucket.

newbie
Activity: 22
Merit: 0
But who would want to bid for them.  Any thoughts of privacy would be gone since the bidder would fully identify themselves to the FBI.  Only some sort of arbitrage but that means selling them right after buying them.

It's cute that you think you'll be able to buy/sell XBT in any substantial amount without disclosing huge amounts of information about yourself.
newbie
Activity: 22
Merit: 0
If the feds DO sell it (a big if), they won't go to an exchange. They'll sell it in an auction like every other asset they seize. We may know the price but since it's essentially a private sale, it won't impact the day-to-day prices of bitcoin; also, it may be months before anybody is able to figure out the price it was sold for.
legendary
Activity: 1176
Merit: 1005
Seeing the blockchain tells you nothing regarding people behind the addresses but if you were to buy coins from FBI at this auction you'd have to identify yourself.

So what you're saying is that buying Bitcoin at a government auction is like buying anything else at a government auction.  Okay.  And?  If that's a concern for you, you wouldn't be buying something at a government auction in the first place, Bitcoin or anything else.
legendary
Activity: 896
Merit: 1006
First 100% Liquid Stablecoin Backed by Gold
But who would want to bid for them.  Any thoughts of privacy would be gone since the bidder would fully identify themselves to the FBI.  Only some sort of arbitrage but that means selling them right after buying them.

The FBI is as capable of looking at the blockchain as anyone else.  Why would it be any worse with Bitcoin than with buying any other seized asset?
Seeing the blockchain tells you nothing regarding people behind the addresses but if you were to buy coins from FBI at this auction you'd have to identify yourself.
legendary
Activity: 1176
Merit: 1005
But who would want to bid for them.  Any thoughts of privacy would be gone since the bidder would fully identify themselves to the FBI.  Only some sort of arbitrage but that means selling them right after buying them.

The FBI is as capable of looking at the blockchain as anyone else.  Why would it be any worse with Bitcoin than with buying any other seized asset?
legendary
Activity: 896
Merit: 1006
First 100% Liquid Stablecoin Backed by Gold
But who would want to bid for them.  Any thoughts of privacy would be gone since the bidder would fully identify themselves to the FBI.  Only some sort of arbitrage but that means selling them right after buying them.
legendary
Activity: 1204
Merit: 1002
Gresham's Lawyer
It would be interesting if there were a pool created to bid on them, the pool sells shares in the pool to raise the bidding fund.  Big buyers are waiting, not buying on exchanges because of expected sales, many/most of the forfeiture auction bidders joined the pool.  Others sold bitcoin to join the pool depressing the bitcoin price further, the pool buys the forfeiture against a thin bidding market at a low price in an artificially depressed period due to the effects of the sale.

This would actually be a good idea.  First, it would probably ultimately be profitable to whoever places the winning bid, even if uncertainty about what will happen with the BTC might depress prices in the short term.  Second, it would help protect BTC against the possible impact of some rapacious bandit simply lowballing it for 10% or under and then dumping it, simply by forcing the selling price somewhat closer to true value.

If this were a movie script, they might cast the the mining pools as the groups that diversify into this arena.  They have most of the security and structure and constituency to accomplish it, and their current model is failing, and they might be able to handle these US legal issues more simply.
full member
Activity: 226
Merit: 100

* An interesting alternative could be to simply auction off the Bitcoin to the highest bidder (likely a pool  created for the purspose of purchasing)
http://www.treasury.gov/services/Pages/auctions_index.aspx
dunno... this could be crazy talk.

yup
legendary
Activity: 1176
Merit: 1005
It would be interesting if there were a pool created to bid on them, the pool sells shares in the pool to raise the bidding fund.  Big buyers are waiting, not buying on exchanges because of expected sales, many/most of the forfeiture auction bidders joined the pool.  Others sold bitcoin to join the pool depressing the bitcoin price further, the pool buys the forfeiture against a thin bidding market at a low price in an artificially depressed period due to the effects of the sale.

This would actually be a good idea.  First, it would probably ultimately be profitable to whoever places the winning bid, even if uncertainty about what will happen with the BTC might depress prices in the short term.  Second, it would help protect BTC against the possible impact of some rapacious bandit simply lowballing it for 10% or under and then dumping it, simply by forcing the selling price somewhat closer to true value.
legendary
Activity: 1204
Merit: 1002
Gresham's Lawyer
I would like to see an auction also.  Let me get some of those coins for cheap.

We may see bitcoin price depressions near the end of the trials when expectations of selling these rise.  The sale will likely be forfeiture auction.

It would be interesting if there were a pool created to bid on them, the pool sells shares in the pool to raise the bidding fund.  Big buyers are waiting, not buying on exchanges because of expected sales, many/most of the forfeiture auction bidders joined the pool.  Others sold bitcoin to join the pool depressing the bitcoin price further, the pool buys the forfeiture against a thin bidding market at a low price in an artificially depressed period due to the effects of the sale.
sr. member
Activity: 448
Merit: 250
Changing avatars is currently not possible.
I would like to see an auction also.  Let me get some of those coins for cheap.
legendary
Activity: 896
Merit: 1006
First 100% Liquid Stablecoin Backed by Gold
Here's an interesting thought.  Can the people who lost BTC with pirateat40 trace their coins and petition for their return from the FBI stash as recovered stolen property?
legendary
Activity: 1204
Merit: 1002
Gresham's Lawyer
Wasn't the wallet encrypted ?

This is for the hot wallet on the server.  Coins were still flowing into it long after the raid.
The enforcers had control of the server for more than a month before the raid. 
When someone has control of the hardware, it is very difficult to secure against that.
It is not like he had a Trezor dongle hanging off of it or anything... 
sr. member
Activity: 252
Merit: 250
Wasn't the wallet encrypted ?
legendary
Activity: 1204
Merit: 1002
Gresham's Lawyer
The evidence thing is not important, since the evidence lies in the block chain. They can sell the coins, and still prove all they need to.

Also, even if they do not secure a criminal conviction, I doubt that he has paid taxes on his criminal income, so that in itself will be enough to confiscate all the money.

http://www.forbes.com/2011/06/08/property-civil-forfeiture.html
hero member
Activity: 740
Merit: 500
Hello world!
The evidence thing is not important, since the evidence lies in the block chain. They can sell the coins, and still prove all they need to.

Also, even if they do not secure a criminal conviction, I doubt that he has paid taxes on his criminal income, so that in itself will be enough to confiscate all the money.
full member
Activity: 176
Merit: 100
The FBI is highly unlikely to liquidate the funds until after the case is closed. I honestly hope they hold an auction with cheap prices for bitcoins haha.
Pages:
Jump to: