Bitcoin Forum

Usually, when somebody bitcoin-related get arrested, his bitcoins are confiscated. Why it is (usually) possible?

P.S. It's purely theoretical question, I'm law-abiding citisen. Just curious.  :)

None of them? They probably have their btc stored in unsafe environments.

Simple way to secure your BTC:
1. Put bitcoins in a wallet.
2. Encrypt.
3. Upload wallet to several places on the internet where you can access them all over the world :)

This, why is it so difficult? even if you encrypt the wallet itself within bitcoin qt it should be enough to block it, unless the feds can force you to say the pass which i have no idea how all of that works.

I'm not sure about other clients but the official Bitcoin client uses AE-256 as the encryption algorithm. This is the same technology used by Truecrypt and nobody has managed to crack it. What matters however is the length of your password since a short password can be easily brute forced no matter how strong the encryption scheme is. My current wallet is protected by a 10 character password consisting of letters and numbers but a government could easily brute force it in a few hours or days if they really wanted to. In contrast, a 30+ character password consisting of random letters, numbers, and symbols would probably be unbreakable with even the strongest supercomputers and for many decades into the future too (if at all).

As Mellnik already said, a wallet.dat file encrypted with such a password could be uploaded to the cloud with the assurance that your bitcoins are still protected. Having multiple copies backed up in multiple locations would be the safest solution since it makes the chances of a loss far less likely (i.e. you could encrypt your wallet with a 50 character password but it won't do you any good if there's only one copy and the feds won't give you your computer back).

When the feds confiscated Ross Ulbricht's coins, what they actually got were the coins held by users of the site. His personal coins were protected with far better security and despite their best attempts, they are still inaccessible to this day:


Link: http://www.theguardian.com/technology/2013/oct/07/fbi-bitcoin-silk-road-ross-ulbricht

if it comes to the worst the US will just do it Guantanamo-Style

The number of bitcoins seized from Ross' computer is definitely more than 26,000. It was 144,000 coins. The silkroad coins were sold immediately, while Ross' personal coins were sold at a later stage. The sale of silkroad coins was immediate, while the sale of Ross' coins hinged on the government being able to produce enough evidence to convict him.

http://www.forbes.com/sites/katevinton/2015/02/18/following-silk-road-trial-u-s-marshals-to-auction-off-nearly-12-million-of-ulbrichts-bitcoin/

The government and Ulbricht agreed to the sale of these Bitcoins on January 27, 2015, during Ulbricht’s trial in New York City. One week later, Ulbricht was found guilty of seven drug trafficking and money laundering charges after only 3.5 hours of jury deliberation.  Had Ulbricht been found not guilty, the money earned by the government in the auction would have been returned to him in cash. Instead, the money will go to the Department of Justice’s asset forfeiture fund, according USMS spokesperson Lynzey Donahue.

A red-hot soldering bar in the ass of bitcoin holder makes miracles. )))

We are assuming that most modern governments (at least the US) wouldn't use violence/threat of violence to extract information.
At least from what we have heard until now, the seizure of bitcoins has been due to mistakes committed by the holders.  :)

This is how you confiscate bitcoins:

"You know you are facing 20-25 years, right?! If you co-operate and provide us with your bitcoins we will make sure you only see 5 years in prison. If you don't play ball, we will also charge you with obstruction of justice and that will get you another 10 years".

https://en.wikipedia.org/wiki/Rubber-hose_cryptanalysis
This is how they will get your BTCs.
Anyway encrypt your hard disk, store your BTCs in a hidden container partition, what else?

https://imgs.xkcd.com/comics/password_strength.png

I think most people who got caught just provided the keys to avoid ending up in the worst possible prison in their country.

Some background is known so prison guards could just look away when someone gets raped who didn't cooperate.

...

Right to all above re $5.00 wrench and similar.   >:(

They will coerce it out of you.  By torture, threat of the worst jail in your country, or attacking your family.  A myriad of ways.

One way to avoid even that (assuming you have your BTC well hidden and well mixed) is to have more than, say, two BTC wallets scattered around.  Give "them" the two of lowest value.

In defense (for the moment) of blockchain.info (http://blockchain.info), you CAN take it with you (assuming your destination has Bitcoin users).

*   *   *

It is regrettable that we must think like criminals when faced with such threats to take away our duly-saved wealth.  See the "Economic Devastation" (in "Economics") for a discussion of a possible happy future after a reset...

simply because those who were arrested did not take all the necessary measure to prevent so, it's a security problem for sure

in some case they probably asked him(in a brutal way) to reveal where his bitcoin are stored

Where did you get that idea from?  The US is pretty big on torture all things considered.

That is why people should opt for storing their coins in a more secure way. But I suppose its only people running an illegal operation or some big operation, who usually will have to do that.

I am sure Ross would have a lot of more coins stored away somewhere.

Well, it seems that the only secure way to keep your coin is to make them unavailable for yourself. Give the keys to somebody who is out of reach of police, or timelock them for several years time, or something like this. 

The person might not have used a password on the wallet. Even if used, the person must not secure it with weak algorithm or guessable passwords like your cat's name or your mother's name. Usually, the person has to turn over the Bitcoins if not additional charges might get pressed.

And this is wrong assumption. Torture is legally allowed to be used by law enforcement, at least in the US.
 

Is this a discussion about how bitcoin gets stolen or get confiscated? ??? I suppose if it's the latter usually the prosecutor will strike a deal with the defendant in any way that if the guys given up his private key to his address, the charges will be lower. Or do it the hard way, make him talk.

I love how some people are oblivious to to reality. Encryption and codes, passwords and secure words or other measures cryptographic tools are not gonna help you really when you will be arrested, dragged to secure location and tortured. And believe it will happen, people are usually think that tortures are something like in the movies, when man is beaten, burned, electrocuted etc. No, not really. Now we have more sophisticated methods of 'asking nicely". Psychological tortures, sleep deprivation, pharmacological agents... It is all our reality, and believe me government would do this to you just to know your passwords. They will also threaten you and your family, tell you that your imprisonment time will be hard like hell if you do not tell them and so on... If you have iron determination and will and you are unbreakable then you can put a passwords on your wallets, but if you think you will break - don't bother.

If a simple password was used to encrypt the wallet / keys then its easy to confiscate, takes a trivial amount of computing power in such case. Many human generated passwords are easy to crack. Also, there is the possibility of a wallet not being encrypted at all like a plain text paper wallet.

Well interesting question... I think it depends on the method you're e.g. arresting someone. If you plan on arresting a person and spy on them, you could just go and transfer the BTC before arresting them. Although I believe the 5 dollar wrench method is the easiest of all. Or just send them to jail... same result.

The majority of cases from digital forensic, but other cases when it is known the individual has the coins I guess it's court mandated or something like that, because if no one knows you have the coins they cannot be confiscated.

Probably it is the best protection.  :)

It's called asset seizure.  The feds coming in and confiscate ALL of your possessions that they can link to your crime.  They don't need much any evidence, just a feeling that the property was acquired through ill-gotten means and they take it from you.  You do not have a choice.  You don't get to "hide some for later".  I've watched this happen first hand to a life-long family friend and it's not pretty.  They say "You got XYZ by being a bad guy, so we're taking it from you." and there's not really anything you can do about it.

That's just stupid, the burden of proof is on the side of the accusation, if you can prove your stuff was legitimately obtained, it will be returned.

Well a good password would help against hacking, but if the goverment forces want to get in and you don't tell your password I assume you would get into trouble anyway?

It all comes down to whether you think you can handle threats like a longer sentence (or maybe even torture). If you have nothing to lose (family etc.), then saying fuck off to the feds will work fine for you. However, if you think you would agree to give up your wallet to get a shorter sentence then a strong password really doesn't help.

The beauty of blockchain is that no asset sezure gives them access to your bitcoins. They can't get them without your cooperation. If you are tough enough to keep saying "no", despite of threats, rapes and wrenches, you'll keep your bitcoins, all of them.

I don't think you know the history of currency confiscation... well, not in North America.
The only one ever in the USA was voluntary, there was no door-to-door confiscation.
It is estimated that only 10% of Americans handed in their gold.
IE: Only 10% of Americans were stupid compared to 40% today.
Confiscation was pitched to people who wanted to help in the war effort but were wealthy and had no offspring to send to war.
The wealthy, obviously, never turned theirs in.

In Cryptos, the same would have to apply; A person would have to willfully hand over their keys or coins.
This means, there wouldn't be cops going door-to-door to confiscate wealth, you'd hand it in yourself.
In other countries, I guess, they'd kill you and steal it or you're not even allowed to own any.
If someone is forced to hand them over, this person could technically never say anything and they'd never find anything.
It's not like a bank where if you don't pay they can garnish your wages and assets.
Also, Gold can be found if you hid it... Gold bullion and nuggets can be found rather easily.

That's why my precious wealth is in both virtual and metallic versions and both are impossible to find.

Even if violence is not directly threatened, other threats can be given to intimidate someone into giving up access to their private keys. The government could threaten to bring additional charges (that may or may not be legit, or even have any intention of bringing), could threaten to investigate friends/family, could threaten to drag their name through the mud, could lie to them, among other things

It's becoming more and more common that police seizes all computer equipment. A quick check will reveal if there's some kind of BTC software in it (or frequent connections to blockchain.info), and if there's any, they will dig further.

Do you keep receipts for everything you own?  Most people don't.  What you say is, in theory, how it should work, but in real life it doesn't.

That would work for most legit bitcoin users who don't bother covering their tracks. However, the bad guys are likely to go to extreme lengths to cover their tracks and hide their wallets/keys from seizure.

Even for white collar crimes? If you are suspected of being part of Al-Qaeda, then it is a different story.
Wasn't Guantanamo Bay set up because they couldn't torture prisoners on US soil?

If the government served a subpoena duces tecum on you to provide an unecrypted wallet.dat or to simply provide a wallet password, and one refused the grand jury subpoena, one could be found in contempt of court and imprisoned for the duration of the session of the grand jury that is sitting. At least, that's my tentative thinking on the matter.

You are so naive. Guantanamo is not a prison, it is a concentration camp. People are kept there with no legitimate grounds there. This would be possible, but more difficult under US jurisdiction.

As for tortures, interrogators do not care, who the fuck are you, white collar, or rainbow ass. They use the same tactics against everybody: kind interrogator changes rough interrogator. They repeat the cycle until a subject of interrogation brakes.

Police will ask criminals password according to the laws, the dirty money must be confiscated, that's normal.

Not only BTC, if criminals have bank accounts, they(court) will freeze the account and money.

They simply can't confiscate anything unless they are given the private keys. Theoretically impossible.

Powerful government types would typically view bitcoiners as stupid liberals/libertarians. The government types are typically neither party of the sort. Studies both in the UK and abroad have shown republican brains to be biologically wired differently and that they're generally more forceful, more impulsive and typically less intelligent. I'd wager they're less creative and open minded as well. No need to categorize humans into just a couple or few political parties but it does demonstrate that we're not dealing with our own kind. Basically, they're thieving aliens who do onto liberals/libertarians what liberals/libertarians would be less likely to do onto others.

The silk road coins were sold in June, 2014. ok.
But the first of ross's coins were auctioned in Dec, 2014. Before the trial.
As I recall, there was a statement somewhere that said he agreed to this at the beginning of 2014. It also said the proceeds were to be held in escrow, etc.

Easy: the owner of the coins is tortured for the password ;D Or yes, the security is very low in some cases... :)

That is different. Imagine a criminal who stole some BTC from you. If he/she gets killed during the arrest, the government can't possibly give your BTC back.

What percentage of your income were stolen from you by criminals, then taken from them by government and returned to you?
Compare it with percentage of your income that is taken by government as taxes.

And that's when you implement your 5th amendment right... oh, yeah they arbitrarily got rid of that without passing a new amendment. "obstruction of justice" charges are blatant violations of the 5th amendment. The government just doesn't give a fuck.

Easy scenario: the BTC owner puts his wallet ( core, multibit, electrum ) on an external Hard disk or on his computer hard disk.
The police simply seizes the whole hardware.

...

Scatter your Bitcoin around to at least four wallets ( I would have two or so online and two or so on hardware like Ledger or Trezor).  Save two of them (say) for .gov when they come calling.  And have other BTC hidden away.  Make sure they are mixed to cover the trail.

When The Man starts threatening, give up the smaller wallets (if you have covered your trail well).

Almost NO ONE can withstand torture.  If giving away the decoy BTC wallets does not stop .gov, then nothing will.  Once the torture starts for real, you would give them the others.

But, it is worth a try to let them have the decoys first.

If I was working in law enforcement I guess I would tell my co-workers to increase the use of torture against Bitcoin users who are under investigation for serious crimes after reading your post.

https://imgs.xkcd.com/comics/security.png

This comic strip comes to my mind right after reading OP's post. :P

Probably because one of answer options was the 5$ wrench :)

To save yourself from torture, don't let anybody know (or even suspect) that you may have coins.
To protect coins from extracting by torture, use
-Timelock, set for years
-Multisig, with co-signers out of reach of police.

BAHAHAHAHAHAHAHAHAHAHAHAHAHAH

HAHAHAHAHAHAHAHAHH

LMAO OHH BAHAHAHAHAHA.

That was a good one.

(Yes they will and they will use things you can't even imagine in darkest depths of your brain)

The guys in charge and their pigs are the worst types of humans on the planet.. many get off to watching you scream in pain.