What people should be more concerned with is the fact that the government is selling off someone elses property before they have even been convicted of a crime. Dread pirate roberts plead not guilty and has still not had a trial yet. He has not been convicted of any crime so if these are his coins they are selling them before the trial is even finished
Disclaimer: I think civil forfeiture laws are applied without sufficient discretion in drug cases. And it's troubling that they apply not just to illegally-obtained assets, but those that are "instrumentality of a crime." That said, there's an important wrinkle here that you're glossing over, and that is usually glossed over in discussions about civil forfeiture.
Civil forfeiture is not confiscation of your property as punishment for committing a crime. It's a determination that the property was never yours to begin with, because it was obtained in an illegal transaction.[1] That's why the standard for civil forfeiture isn't whether the person is guilty "beyond a reasonable doubt" but rather whether the property is the fruits of a crime by the "preponderance of the evidence." Any civil dispute over the rightful ownership of property is evaluated according to a preponderance of the evidence standard, and the dispute about the status of the property can be resolved without resolving the issue of criminal guilt.
The very important distinction to make here is that the issue of whether Ulbricht is guilty is distinct from whether the money is the proceeds of illegal activity. Maybe Ulbricht gets acquitted because he creates enough reasonable doubt that he isn't DPR, as he claims. Or because he succeeds in getting key evidence excluded because of a procedural failure by the feds. His acquittal doesn't mean that the money wasn't the product of illegal activity. Indeed, he has tremendous incentive to try and prove that he never owned these Bitcoins, because that goes to proving he isn't DPR!
Ross William Ulbricht hasn't yet been convicted of anything. I know that they aren't selling his personal bitcoins, but in the (highly unlikely) event that he is found innocent, wouldn't that mean that the Silk Road assets need to be returned to him? How then can they sell them now?
> Ross William Ulbricht hasn't yet been convicted of anything. I know that they aren't selling his personal bitcoins, but in the (highly unlikely) event that he is found innocent, wouldn't that mean that the Silk Road assets need to be returned to him?
If they aren't his bitcoins, why would they return them to him? The assets they are selling aren't the ones he has claimed a property interest in, they are the ones that were unclaimed (by him or anyone else) when the forfeiture action was initiated.
Actually forfeiture sucks hard, even if you are found not-guilty you don't really have a chance in hell of recovering assets seized during a drug bust—like your car for instance.
You can try to prove your innocence but it doesn't really work in practice.
However, if he is found not guilty, then the presumption is that he was not involved and therefore would not be the "rightful owner" of the seized property anyway.
As others have pointed out, Ulbricht has not claimed that they are his bitcoins. In fact he would be undermining his own legal defense if he claimed the bitcoins were his, so the government is taking them unopposed. So if he were found innocent, probably part of the basis for finding him innocent would be that he successfully convinced the government that those were NOT his bitcoins.
Well no, because it's been proven already that Silk Road was a drug exchange, and thus the money is dirty drug money and confiscated by the government. Whether Ulbricht was the mastermind behind the exchange and should be incarcerated is yet to be determined (I believe), that takes a longer lawsuit than a court order to shut SR down and seize its assets.
I don't think so. Since the assets were on SR servers, which weren't technically Ross's personal property, and the business was used for selling drugs (admittedly along with other things), civil forfeiture laws allow the government to take those assets. Doesn't matter what happens with the lawsuit.
Meh... a bitcoin is a bitcoin is a bitcoin. If in the future the gov't is ordered to return X number of bitcoins they can simply go to the marketplace and buy them.
This is good in a way. It's yet another tacit admission of the legal legitimacy of bitcoin by USG. It's not like USG would seize 20kg of cocaine then sell it into the market in an auction!
The USMS will not transfer bitcoins to an obscene public address, a public address apparently in a country restricted by the Office of Foreign Assets Control (OFAC), a public address apparently associated with terrorism, other criminal activities, or otherwise hostile to the United States.
So, be sure to pre-calculate your auction-winning vanity-address to be some simple transformation of your obscene/anti-American message, rather than the message itself!
This is only what is currently being minted every 8.2 days. I predict the price will go up due to the media attention - this is a very cool story, expect lots of news coverage. When/if a Silk Road based movie ever comes out, expect "the moon".
You couldn't ask for a better story - the opposite of what Bitcoin really is when you think of it - finance, computers - stuff that bores the hell out of most people. Instead: drugs! conspiracy! magic internet money! Now, add "Satoshi" - mysterious inventor who's vanished. Seriously, you can't write this stuff!
Could someone explain the logic behind the price drop? Is that related to the fact that those 30k will be sold below the standard price? For some reason it seems counter-intuitive for me, since the money connected to those coins have been already paid once (whether for mining them or via exchange). So in practice it's more like they've been actually paid for ~twice now, so the effect "should" be opposite.
There is no logic. Searching for logic behind bitcoin's price is a fool's errand. You'll trick yourself into believing things that aren't true, because the price of bitcoin is determined by a small number of large players. Those large players enter or exit the market for any reason they feel like. It's gambling, plain and simple. News announcements serve as a trigger for the gamblers to initiate gambles (exit/enter the market).
Until bitcoin achieves a critical mass among both consumers and merchants, searching for reasons for a price drop or jump may as well be numerology.
The trouble with opinions about the price of bitcoin is that they're very hard to disprove, because no one is privy to the information that's causing the price fluctuations except the people causing the price fluctuations. But remember, that's my point: you won't ever know why the price rises or falls. It's beyond your knowledge, unless your friends include those who are actually moving the price.
Until the price of bitcoin is determined by more than a couple hundred people, you simply cannot reason about its price in any meaningful way. Even talking about "downward price pressure due to mining costs" is mistaken at this point. The price of bitcoin is a function of the whims of those couple hundred people.
That's an interesting understanding of how currency works. There is no currency connected to bitcoin. There is an exchange rate. Someone out there willing to give you X dollars for Y bitcoins. (Consider the concept of X dollars for Y barrels of gas, or Z oz of gold).
Money is used multiple times. The dollar you spend at the store is then split up and spent again, and again, and again. So the value of the whole currency is what is important, how much buying power the currency you have is based on how many dollars there are, what they can be spent for, how often they are spent, etc. By offering X dollars for Y bitcoins, what people really mean is: offering x% of all the dollars for y% of all the bitcoins.
This sale adds more bitcoins (because portions of the markets believed them unrecoverable, and they haven't been in circulation for a while), so Y bitcoins is now a smaller percentage of the whole buying power available for bitcoins, which means they are also worth less dollars. Similar effects are seen in fiat currency (like dollars) when more money is printed, it affects the money supply, and allows the government a modicum of control on inflation (when used correctly) but also can let the government to let inflation get out of control (re: most cases of Hyperinflation[1]).
The simpler explanation is simply: Because the supply of bitcoins went up, with a constant demand of bitcoins, the value goes down because more people are trying to sell them, and the price goes down due to competition etc (e.g. basic supply and demand).
It's plausible that folks who are interested and able to buy these coins have a position in BTC. They may be selling BTC in order to have the cash to purchase the Silk Road blocks. This has the duel effect of driving the price down, which makes the "list" price (i.e. the exchange rate) of the SR blocks lower which, in turn, may make the competing bids lower.
People had priced in the freeze on these coins, which might have continued indefinitely. The price drop is out of proportion ot the actual (re)inflationary effect of these bitcoins, but people are irrational.
If there was logic, it would be repeatable, and all those providing advice on said logic would be millionaires therefore doing something other than answering this very question.
Same goes for capital markets which is why only brokers and Warren Buffett "make money".
Is there much difference between this, and if the DEA had busted some meth dealers who had a bunch of gold sitting around? Or if the FBI had busted some mafia family with billions in property?
What are the precedents here? Does this style of US government confiscation / sale have any analog in realms outside the net?
I'm honestly curious, I know that governments are completely within their (self defined, but generally accepted) rights to profit from these seizures, but what are the implications of profiting from the proceeds of crime, and has this raised it's head in more "traditional" areas before?
Almost by definition, they will be sold at "market price." It's the "market price" of buying 3K blocks of Bitcoin as opposed to the "market price" of the daily Bitcoin exchanges.
If the government somehow seized a giant comic book collection, they wouldn't try to sell them off individually on eBay. They would auction it off in 1 block, and interested parties who know how to maximize its value would bit on it.
Probably a dumb question, but I seem to have trouble understanding the post: Are the bitcoins being sold in one discreet chunk (you buy the entire wallet or nothing) or are they being parceled out (it mentions auctioning off blocks)?
Also, is it possible to use these bitcoins in a transaction, or would you simply be paying for the still-encrypted wallet?
They could probably get more value out of the bitcoins by selling them slowly in the market rather than issuing a block sale. That's like Ackman running to the market and yelling for sale 20,000,000 shares of JCP. He instead slowly acquires or divests his stake.
This seems insane. Shouldn't it be cheaper and more efficient to just sell them on an exchange or something? (Over time, even, rather than all at once, obviously.)
"Let's sell them all in blocks of 3000 and require a deposit of $200k to bid" ... yeah ...
If you were the US Marshals, would you entrust the government's money[1] to an unregulated Bitcoin exchange?
[1] As to whether the government is morally, ethically, or legally entitled to the seized properties, I have no opinion. I don't know anything about the situation.
Signing up for an account on $EXCHANGE_THAT_ISNT_COMPROMISED_YET so you can unload $17,000,000 worth of Bitcoin sounds far more insane to me than this does.
That only work if there is an exchange that is widely considered reputable so that the market value is accepted by observers as fair, and those places just don't exist yet for bitcoin. (Obviously, having stolen good sold at the agent's nephews's yardsale is not OK.) Sometimes there are inefficiencies involved with transparency.
[+] [-] marme|11 years ago|reply
[+] [-] rayiner|11 years ago|reply
Civil forfeiture is not confiscation of your property as punishment for committing a crime. It's a determination that the property was never yours to begin with, because it was obtained in an illegal transaction.[1] That's why the standard for civil forfeiture isn't whether the person is guilty "beyond a reasonable doubt" but rather whether the property is the fruits of a crime by the "preponderance of the evidence." Any civil dispute over the rightful ownership of property is evaluated according to a preponderance of the evidence standard, and the dispute about the status of the property can be resolved without resolving the issue of criminal guilt.
The very important distinction to make here is that the issue of whether Ulbricht is guilty is distinct from whether the money is the proceeds of illegal activity. Maybe Ulbricht gets acquitted because he creates enough reasonable doubt that he isn't DPR, as he claims. Or because he succeeds in getting key evidence excluded because of a procedural failure by the feds. His acquittal doesn't mean that the money wasn't the product of illegal activity. Indeed, he has tremendous incentive to try and prove that he never owned these Bitcoins, because that goes to proving he isn't DPR!
[1] At least when we're talking about cash. There's a whole host of more questionable issues when it comes to things like forfeiture of vehicles and guns used in crimes. See: http://scholarworks.gsu.edu/cgi/viewcontent.cgi?article=1459... see also: http://ij.org/pennsylvania-judge-calls-civil-asset-forfeitur... (for a particularly egregious example).
[+] [-] artursapek|11 years ago|reply
Market started going crazy earlier today when DPR's seized coins started to move. https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN4... The downtrend is only accelerating.
[+] [-] joosters|11 years ago|reply
Ross William Ulbricht hasn't yet been convicted of anything. I know that they aren't selling his personal bitcoins, but in the (highly unlikely) event that he is found innocent, wouldn't that mean that the Silk Road assets need to be returned to him? How then can they sell them now?
[+] [-] ryan_j_naughton|11 years ago|reply
Take a look at this well written article by the New Yorker Taken: The Use and Abuse of Civil Forfeiture http://www.newyorker.com/reporting/2013/08/12/130812fa_fact_...
[+] [-] dragonwriter|11 years ago|reply
If they aren't his bitcoins, why would they return them to him? The assets they are selling aren't the ones he has claimed a property interest in, they are the ones that were unclaimed (by him or anyone else) when the forfeiture action was initiated.
http://www.justice.gov/usao/nys/pressreleases/January14/Silk...
[+] [-] danielsju6|11 years ago|reply
You can try to prove your innocence but it doesn't really work in practice.
[+] [-] GigabyteCoin|11 years ago|reply
There is no doubt in anyone's mind that the bitcoin sitting inside the silkroad wallets was free for the taking by U.S. authorities.
Whether or not Ross Ulbricht's wealth is owed to the U.S. government they're not sure, so they're keeping them until the trial has completed.
[+] [-] swalkergibson|11 years ago|reply
However, if he is found not guilty, then the presumption is that he was not involved and therefore would not be the "rightful owner" of the seized property anyway.
[+] [-] landryraccoon|11 years ago|reply
[+] [-] grondilu|11 years ago|reply
[+] [-] Cthulhu_|11 years ago|reply
[+] [-] ars|11 years ago|reply
[+] [-] unknown|11 years ago|reply
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[+] [-] mscman|11 years ago|reply
[+] [-] rbobby|11 years ago|reply
[+] [-] vijayboyapati|11 years ago|reply
[+] [-] wmf|11 years ago|reply
[+] [-] gojomo|11 years ago|reply
The USMS will not transfer bitcoins to an obscene public address, a public address apparently in a country restricted by the Office of Foreign Assets Control (OFAC), a public address apparently associated with terrorism, other criminal activities, or otherwise hostile to the United States.
So, be sure to pre-calculate your auction-winning vanity-address to be some simple transformation of your obscene/anti-American message, rather than the message itself!
[+] [-] notindexed|11 years ago|reply
https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN4...
[+] [-] sp332|11 years ago|reply
[+] [-] chuckup|11 years ago|reply
You couldn't ask for a better story - the opposite of what Bitcoin really is when you think of it - finance, computers - stuff that bores the hell out of most people. Instead: drugs! conspiracy! magic internet money! Now, add "Satoshi" - mysterious inventor who's vanished. Seriously, you can't write this stuff!
[+] [-] viraptor|11 years ago|reply
[+] [-] sillysaurus3|11 years ago|reply
Until bitcoin achieves a critical mass among both consumers and merchants, searching for reasons for a price drop or jump may as well be numerology.
The trouble with opinions about the price of bitcoin is that they're very hard to disprove, because no one is privy to the information that's causing the price fluctuations except the people causing the price fluctuations. But remember, that's my point: you won't ever know why the price rises or falls. It's beyond your knowledge, unless your friends include those who are actually moving the price.
Until the price of bitcoin is determined by more than a couple hundred people, you simply cannot reason about its price in any meaningful way. Even talking about "downward price pressure due to mining costs" is mistaken at this point. The price of bitcoin is a function of the whims of those couple hundred people.
[+] [-] SolarNet|11 years ago|reply
Money is used multiple times. The dollar you spend at the store is then split up and spent again, and again, and again. So the value of the whole currency is what is important, how much buying power the currency you have is based on how many dollars there are, what they can be spent for, how often they are spent, etc. By offering X dollars for Y bitcoins, what people really mean is: offering x% of all the dollars for y% of all the bitcoins.
This sale adds more bitcoins (because portions of the markets believed them unrecoverable, and they haven't been in circulation for a while), so Y bitcoins is now a smaller percentage of the whole buying power available for bitcoins, which means they are also worth less dollars. Similar effects are seen in fiat currency (like dollars) when more money is printed, it affects the money supply, and allows the government a modicum of control on inflation (when used correctly) but also can let the government to let inflation get out of control (re: most cases of Hyperinflation[1]).
The simpler explanation is simply: Because the supply of bitcoins went up, with a constant demand of bitcoins, the value goes down because more people are trying to sell them, and the price goes down due to competition etc (e.g. basic supply and demand).
[1] http://en.wikipedia.org/wiki/Hyperinflation
[+] [-] sbierwagen|11 years ago|reply
Increasing supply always reduces the market price.
[+] [-] jashmenn|11 years ago|reply
[+] [-] anigbrowl|11 years ago|reply
[+] [-] smrtinsert|11 years ago|reply
Same goes for capital markets which is why only brokers and Warren Buffett "make money".
[+] [-] supergauntlet|11 years ago|reply
[+] [-] 0x0|11 years ago|reply
Those coins will then be linked to the winners' identities permanently in the block chain. Talk about painting a target on oneself.
[+] [-] GigabyteCoin|11 years ago|reply
They only made the announcement today and you have to be registered to bid by this coming monday?
Is this typical of government auctions?
[+] [-] Benferhat|11 years ago|reply
[+] [-] Intermernet|11 years ago|reply
What are the precedents here? Does this style of US government confiscation / sale have any analog in realms outside the net?
I'm honestly curious, I know that governments are completely within their (self defined, but generally accepted) rights to profit from these seizures, but what are the implications of profiting from the proceeds of crime, and has this raised it's head in more "traditional" areas before?
[+] [-] saganus|11 years ago|reply
[+] [-] JacobAldridge|11 years ago|reply
Which dents my plan of offering to buy each of the BTC 3,000 blocks with an offer of BTC 2,000 each.
[+] [-] DogeDogeDoge|11 years ago|reply
[+] [-] danielweber|11 years ago|reply
If the government somehow seized a giant comic book collection, they wouldn't try to sell them off individually on eBay. They would auction it off in 1 block, and interested parties who know how to maximize its value would bit on it.
It's basically "Storage Wars."
[+] [-] CoreSet|11 years ago|reply
Also, is it possible to use these bitcoins in a transaction, or would you simply be paying for the still-encrypted wallet?
[+] [-] deadfall|11 years ago|reply
[+] [-] NAFV_P|11 years ago|reply
Fucking hell, individual instances of radon-222 are more predictable.
[0] http://bitcointicker.co
[+] [-] smoorman1024|11 years ago|reply
[+] [-] Glyptodon|11 years ago|reply
"Let's sell them all in blocks of 3000 and require a deposit of $200k to bid" ... yeah ...
[+] [-] adwf|11 years ago|reply
[+] [-] jarrett|11 years ago|reply
[1] As to whether the government is morally, ethically, or legally entitled to the seized properties, I have no opinion. I don't know anything about the situation.
[+] [-] bthrn|11 years ago|reply
-The government is probably not interested in taking a long time to sell these blocks.
-Lastly, I imagine there are easily more than 10 individuals who are both financially willing and able to purchase blocks of this size.
[+] [-] cmelbye|11 years ago|reply
[+] [-] jessriedel|11 years ago|reply
[+] [-] dkural|11 years ago|reply
[+] [-] unknown|11 years ago|reply
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