FBI Seizes 144,000 BitCoins from Silk Road Bust

[Matthew5]

http://www.forbes.com/sites/andygree...-of-silk-road/

The Silk Road made a small fortune during its two and a half years as the web’s biggest anonymous black market for illegal drugs. As of Friday, at least one $28.5 million chunk of that fortune now belongs to the FBI.

An FBI official tells me that the bureau has located and seized a collection of 144,000 bitcoins, the largest seizure of that cryptocurrency ever, worth close to $28.5 million at current exchange rates. It believes that the stash belonged to Ross Ulbricht, the 29-year-old who allegedly created and managed the Silk Road, the popular anonymous drug-selling that site was taken offline by the Department of Justice after Ulbricht was arrested earlier this month and charged with engaging in a drug trafficking and money laundering conspiracy as well as computer hacking and attempted murder-for-hire.


The FBI official wouldn’t say how the agency had determined that the Bitcoin “wallet”–a collection of Bitcoins at a single address in the Bitcoin network–belonged to Ulbricht, but that it was sure they were his. “This is his wallet,” said the FBI official. “We seized this from DPR,” the official added, referring to the pseudonym “the Dread Pirate Roberts,” which prosecutors say Ulbricht allegedly used while running the Silk Road.

[HOLLYWOOD]

from the 10 Planks of the Communist Manifesto...

It's NOT YOUR PROPERTY, it's OUR(.GOV) PROPERTY

[tod evans]

I believe this was covered a couple weeks back..

The FBI can't actually access the money if I read the comments correctly.

[dannno]

I believe this was covered a couple weeks back..

The FBI can't actually access the money if I read the comments correctly.

Ya the theory is they have a copy of the wallet, but somebody else could also be holding a copy with the password and could have emptied it already.

[wetroof]

they actually seized the coins now. they got access to the private keys. maybe they figured out the password to an encrypted wallet file - due to DPR having that password in plaintext on his personal laptop or external server the feds got. and with the private key(s) they transferred 144k bitcoins to a new address i.e securing those bitcoins. this is covered in r/bitcoin today.

people believe DPR still has 122k bitcoins in separate addresses which the feds don't have ownership of (yet).

[tod evans]

That sucks!

I hope he keeps the rest.

[Peace&Freedom]

As in other press release prosecutions, what we know is basically the government's glowing version of their exploits, with no disclosure of their failures. The BTC that was in SilkRoad's immediate wallet was taken by the feds, but they may have had a chance to move more of it to a paper source or other secure location (as in physical, not a digital address). So even in the context of a traditional shutdown, the new currency may be creating a more level playing field, where the accused may not in fact be pre-emptively impoverished of funds (thus allowing them to be able to mount a legal defense).

The best comment remains one that was on Daily Paul: "...And now 10 more will show up in its place... What the feds have done, without realizing it I'm sure, is created a vacuum in the market. Before, no one in their right mind would compete with Silk Road. Now, there is no competition. It seems as if the feds shot their wad early(not surprising) and wasted their only shot at being able to track these types of transactions. Good job morons. I bet your mommies are proud."

[Matthew5]

Couldn't the Feds flood the bitcoin market now by a massive sell off?

[idiom]

Nah, what they want is the 144,000 coin histories, that show every wallet each of those coins has ever been in.

Each of those coin trails is now definitively tied to drug dealing, so every previous owner that is in the bitcoin chain of custody now has a new entry in their FBI file.

That won't ever come back to bite anyone.

[tangent4ronpaul]

Couldn't the Feds flood the bitcoin market now by a massive sell off?

Yes, and that would be a good buying opportunity.

Nah, what they want is the 144,000 coin histories, that show every wallet each of those coins has ever been in.

Each of those coin trails is now definitively tied to drug dealing, so every previous owner that is in the bitcoin chain of custody now has a new entry in their FBI file.

That won't ever come back to bite anyone.

You do realize that something like 90% of US currency is contaminated with traces of cocaine - right?

-t

[tangent4ronpaul]

FBI seizes over $27 million in bitcoins, likely from Silk Road suspect
Feds tell Forbes that the 26,000 bitcoins belonged to Dread Pirate Roberts.
http://arstechnica.com/tech-policy/2...-road-suspect/

When we left off earlier this month, the FBI had acknowledged that it seized over 26,000 bitcoins as part of its case against the Silk Road, the infamous Bitcoin- and Tor-fueled illicit marketplace.

But on Friday, an anonymous source at the FBI told Forbes that the agency has now also seized 144,000 bitcoins, worth over $27 million at current exchange rates.

The magazine reports:

The FBI official wouldn’t say how the agency had determined that the Bitcoin “wallet”–a collection of Bitcoins at a single address in the Bitcoin network–belonged to [suspect Ross Ulbricht], but that it was sure they were his. “This is his wallet,” said the FBI official. “We seized this from DPR,” the official added, referring to the pseudonym “the Dread Pirate Roberts,” which prosecutors say Ulbricht allegedly used while running the Silk Road.

When Ars called the FBI to confirm Forbes' report, Kelly J. Langmesser, a spokesperson for the FBI in New York, declined to comment.

Forbes also linked to a particular Bitcoin address, which received a massive influx of bitcoins within the last 24 hours. And just like the last time the Internet identified one of the accounts believed to be controlled by the feds, there have been new small donations to that account, ostensibly so that the donors can send comments to the owner of the account. For now, those comments appear only to be advertisements rather than insults, along the lines of "Get cheap USB hubs and networking equipment to your door in 2 days. Bitcoin only of course" and "www.zeroblock.com: Real-time Bitcoin market data and aggregated news feed."

So what will government authorities do with all these seized bitcoins once the case is wrapped up? They'll mostly likely just liquidate (read: sell) them, as with any other seized asset in a criminal case.

New FBI wallet of stolen bitcoins:
https://blockchain.info/address/1Ffm...TjJJusN455paPH

-t

[idiom]

You do realize that something like 90% of US currency is contaminated with traces of cocaine - right?

-t

The serial number doesn't connect to a database listing every time it has been used to purchase cocaine though.

[Matt Collins]

Not to brag, but to brag, I posted this on Slashdot yesterday and made the front page

[Matthew5]

Not to brag, but to brag, I posted this on Slashdot yesterday and made the front page

[dannno]

Nah, what they want is the 144,000 coin histories, that show every wallet each of those coins has ever been in.

Each of those coin trails is now definitively tied to drug dealing, so every previous owner that is in the bitcoin chain of custody now has a new entry in their FBI file.

That won't ever come back to bite anyone.

Are you still making posts that show you have no idea how bitcoin works?

You don't make a bank transfer into a wallet and then transfer those coins to Silk Road - nobody does that. You send them through intermediary wallets that have no ties to any traceable information. So I could have bought something legal with my bitcoin and then that person could have spent the coins at silk road, or I could have sent it to my anonymous wallet then sent it to my silk road account, the FBI would never know which it was.

[Matthew5]

Are you still making posts that show you have no idea how bitcoin works?

You don't make a bank transfer into a wallet and then transfer those coins to Silk Road - nobody does that. You send them through intermediary wallets that have no ties to any traceable information. So I could have bought something legal with my bitcoin and then that person could have spent the coins at silk road, or I could have sent it to my anonymous wallet then sent it to my silk road account, the FBI would never know which it was.

Thanks for setting the record straight. I thought the advantage of Bitcoin was that it could be used anonymously.