Bitcoin Forum

They got to his main stash of Bitcoins.

http://www.forbes.com/sites/andygreenberg/2013/10/25/fbi-says-its-seized-20-million-in-bitcoins-from-ross-ulbricht-alleged-owner-of-silk-road/ (http://www.forbes.com/sites/andygreenberg/2013/10/25/fbi-says-its-seized-20-million-in-bitcoins-from-ross-ulbricht-alleged-owner-of-silk-road/)

And this is the address they have moved them too, now the largest single address on the network!

https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH

Friday night (evening) , let's see how the market reacts!

So now US government owns the largest single address on the network, it becomes more interesting...

Has this hit other Bitcoin news networks yet?

Link doesn't work, it's got issues.

Whoa, this is THE top story at forbes.com right now...

http://www.forbes.com/sites/andygreenberg/2013/10/25/fbi-says-its-seized-20-million-in-bitcoins-from-ross-ulbricht-alleged-owner-of-silk-road/

It looks like the address has been filled in multiple increments of 324 BTC.

324 = FBI? (telephone keypad)

Damn, I bet you're right.

https://www.google.co.uk/search?q=324+FBI&oq=324+FBI&aqs=chrome..69i57j0l4.1598j0j7&sourceid=chrome&espv=210&es_sm=122&ie=UTF-8
324 does seem to be used in their phone numbers so I guess it has significance to the FBI.

Yahoo Awnsers
"i dunno i had a friend tell me once that she actually used to call the fbi (324-fbi on the numbers on the phone) i dunno how true that is call it maybe it works idk and ask questions if you get anything. and im not tryin to be funny i really heard it idk good luck."

Thanks, OP's link was disappointing :P.

Just curious, if they are going to liquidate or auction off the stash, do they have to find someone with MSB license to do that? who would that be?

Government agencies are exempted from money transmitter regulations.

Common sense would make you think that the bitcoin community should react positive with this news. Like i said elsewhere, we are years away from them deciding the case, so those coins are not going to hit the market any time soon.... So, we know that those coins will be out of the loop for years, unless DPR strikes a deal, which I dont think is going to happen...

And in the mean time bitcoin grows, and when the FBI finally does sell them, they suddenly have a trillion dollars to spend on privacy invasion.

Why is no one discussing the one REALLY important question: HOW were they able to break (supposedly) encrypted wallet and syphon money from it? If we assume it was a normal BitcoinQt wallet.dat, is there some kind of method to break it that is not universally known? As a community, we better find out everything about it, and do it fast...

With all the mistakes DPR allegedly made I wouldn't be surprised if he used a weak password. The coins at 1933phfhK3ZgFQNLGSDXvqCn32k2buXY8a still haven't moved though.

Likely this:
http://imgs.xkcd.com/comics/security.png

We won't see these coins in a couple of years while trial is going on.

They don't need Bitcoin money for that. I personally think those Bitcoins will stay in government agency accounts and probably moved around. They could even use it for propaganda, they could send it to a particular group and spread it across the media to give Bitcoin a bad rep, without relinquishing control over their holdings. What we know about the state of internet privacy is the equivalent of the military announcing their "new" tech, something built years before and kept secret. They are always a good few years ahead in most technology.

LOL... I did an internship with the FBI.... just LOL.

You must be hired to spread propaganda then. Notme is a shill! :P

Good answer  ;D

This is good news for Bitcoin, overall.

If they auction/sell - we get a firesale and all those whiners that start alt-coins because they missed the boat years ago can finally put a sock in it.

If they hold them forever - less in circulation boosts everyone's value, and the subsequent news of this seizure proves Bitcoin has value. After all, why seize something that is worthless? Thanks for the vote of confidence, FBI!

- keylogger installed on his PC
- DPR reused a password from somewhere else (perhaps with a changed number or something that could easily be bruteforced if you know the other pw)
- DPR handed over the key for whatever reason

Note that if this was a cold wallet, stored offline, he might not have been all that concerned with the strength of the wallet pw. Its even conceivable the (offline) wallet was generated with an old version of bitcoinqt that had a flaw that made decrypting it relatively easy. IIRC.

Nope.  They offered me a job, but I failed to get clearance since I was too honest about using drugs during college.  Most people I did them with have clearance and government jobs, but I'm not going to lie just to get a job.

So... The FBI is now one of the largest holders of BTC. DPR's trial is likely to last several years, and the seized BTC can't be sold until the trial is over? In the meantime, if BTC were to be outlawed, those BTC would likely crash in value before they get a chance to sell. Or if BTC continues to grow, that 25 million dollars could potentially look more like 250 million, or maybe even 2.5 billion?

Yes, this has definitely become much more interesting...

he told them the password and now he will be less years in prison.

This Fresh News?
show in tv 3 or 4 week ago

Today is 25.10.2013

Month agop this be Actual


 ::)
 ???
 :o


Why you sleep

Wont surprize our scene but you to late  ;D

 ;)

Ok but thanx you for this information interest

Unless he's an idiot and didn't get a binding deal of some sort.

Exactly this.

When you're looking at life in prison, what good does $25M do you?  Better to give up the money and still have some of your life left to live outside of prison walls.

I have a couple questions re: reading the blockchain....

1. it looks like several hundred wallet addresses / accounts were emptied into the 1fmb account, click on any "from" address at random, look at a few of them, I see anywhere between 4-10 BTC in each account. What is the purpose of this?

2. if they were in fact DPR's coins, why would he put them in so many small accounts, and how could the fedz get that many wallets & passwords?

3. the addresses to the left of a green arrow are "from" and to the right is the "deposit" how do you deposit from multiple addresses? or is this just how they got hashed? (I don't know a better way to ask this question) never saw a "how to read the blockchain" instructions.

thanks. be nice, don't flame.  :)

most likely thats the case.

no password: 50 years.
with password: 10 years.

he will also tell "everything" about silk road. how it has worked, secrets behind it etc etc...

This is historical moment: For the first time in modern history, government have a stash of debt free money, this time they don't need to borrow from FED ;D (Sadly that is robbed from some people anyway  :P)

I also wonder what this means for Silk Road users also? Do silk road have any info from users? I have never even visited the site so I don't know how it worked.  :D

This. They will likely use the Bitcoins against Bitcoin.

no the money goes to the treasury most likely, so it could be used to pay down the debt... lol

but most likely they will spend it on gold plated toilet seats

.

Technically DOJ.  Forfeited assets are handled by DOJ.  Right now it is evidence but after conviction it will be turned over to DOJ who handles all forms of forfeited assets yachts, planes, gold depositories, luxury goods, you name it and the feds have at one time seized and auctioned it.  Until he is convicted the funds will just sit there.  On the off chance he is found not guilty the first thing he lawyers would be doing is filing to have his wrongfully seized assets returned.   Not saying it will happen but because of that the DOJ will wait for a conviction before doing anything with the seized assets.

Proceeds go to the treasury so it isn't like the FBI gets to keep the funds.

Sorry for being offtopic, but I am not sure how my link didn't work and this one did? They are exactly the same, is this a joke on me or something? :p

Anyway, is it safe to have so much Bitcoin in one single address?

They don't need a conviction, which in a criminal case needs to be beyond a reasonable doubt.  They could lose the criminal case and still win the civil forfeiture case, which is a separate legal action and they only need to win by a preponderance of the evidence in that action.

before someone fixed it, the link pointed to http://fbi-says-its-seized-20-million-in-bitcoins-from-ross-ulbricht-alleged-owner-of-silk-road

Oh that makes sense, thanks!

And now we know this guy made at least 50 million dollars(250,000 BTCs)of profit in less than 3 years' time.

I wonder how many would want to be the next Ross Ulbricht.

interesting, did not realize that.

so  how would they auction these?  just put up the entire lot of 177,000 btc or 250k, whatever it is?  

I fixed your link, ofcourse they're exactly the same... NOW!

Hehe, I thought I was going mad!

Agreed however they likely aren't going to move until the criminal case is over one way or another.   It isn't like the Bitcoins are going to spoil.  They will still be the same bitcoins in 2014 or whenever the criminal phase wraps up, as they are today.

It is up to the DOJ.   The sad thing is they have a LOT of experience is selling forfeited assets.  Billions of dollars a year in assets, cars, planes, mansions, fine art, luxury goods, speed boats, you name it they have sold it in the past. So they pretty much have it down to a science.  They will sell it off however they feel will bring in the top dollar. For someone with a lot of money this will be a great way to get some coins without dealing with liquidity issues, or exchange risk, or bank delays.   Win auction, wire the US treasury some funds, get your sizable position of coins.

Regardless this will be a really great headline.  The DOJ doesn't seek forfeiture of things without value.  The news stories of the DOJ auctioning off lots of Bitcoins worth millions will be a big deal.

To be honest, I was hoping there wouldn't be some lingering dark cloud hanging over the markets for some time to come.  Uncertainty makes for a terrible compass.

Whats the uncertainty?  Those bitcoins belonged to DPR, in all likelihood, in a few years they will belong to someone else. What that person will do with them is just as uncertain as what DPR would have done with them. If anything we gained some certainty, namely that these coins wont hit the market for quite some time, and once they do, anyone rich enough to buy such a pile of bitcoins most likely isnt dumb enough to blindly dump them on the market.

In other articles it has been claimed that they only got the coins that the SR software had access to and which belonged to the customers. If the wallet was encrypted the password was probably stored somewhere on the computers they seized.

Thats the ("hot") wallet they got access to first. It was much smaller.

The FBI now owns so many coins that they could take us to single digits with a single dump.

One can hope...

lol, yes i would like that so see that soon too (but it wont happen)  ;)

they will sell it in some years i think, when he is in jail and the thing is over.

The Federal Reserve will probably be the first ones in line to snatch these up with a big batch of freshly printed dollars.

Could even be that these particular coins will attract a small numismatic premium ... belonged to DPR, officially sent the US Treasury back their crap, devaluing fiat paper in exchange for bitcoin ... who wouldn't want them?

Provided they really manged to get their greedy fingers on them, i think thats something the foundation should get involved with, because it would be catastrophic to have the feds holding and dropping such a large amount on the market. Afterall its just freshly printed bucks, so they dont really care.

I'd imagine that like other seized items, they would auction them off, even though presumably selling them off slowly would maximize their value.  Then it would be up to whoever bought them to decide what to do with them.  Someone who got them for a song would have a strong incentive to start out with a round of profit-taking and cash in some of them, regardless of the short term impact to the Bitcoin price, stopping when it became less profitable to do so.

Of course, other interests (say the Winklevoss twins) could also pick them up in such a transaction, or someone else with enough money to afford picking up a large quantity of a highly volatile asset.  If the Winklevoss twins got it, they'd have a good incentive to hold onto it and put it in their fund, or something similar, and it wouldn't have much impact on the exchange rate because it would still, essentially, be tied up like it is now, just in a venture rather than with the government.

Bill Gates should buy them, he has already said that Bitcoin is cool and I would prefer Gates to win such an auction vs some dirty wall street pump and dump firm...

That is kind of epic.

I don't think the Fed would dump them on the market.  They would hoard them like they supposedly do with gold in order to remain somewhat solvent when the dollar inevitably collapses.  This seizure could potentially allow them to obtain BTC without causing a large sudden disruption in the exchange rate that would occur if they purchased BTC in the open market.

+1. I think govts around the world will finally realize that Bitcoin can be used to back fiat currencies like other commodities (gold, oil, natural gas, rare-earth elements etc).

They're required to dispose of seized assets in some way.  These are the Guidelines (http://www.justice.gov/usao/eousa/foia_reading_room/usam/title9/118mcrm.htm#9-118.430) on how they do that.  They're only guidelines, but based on past behavior and guessing, I'd think they'll auction them off.  I'd hope they wouldn't do the worst possible thing, which would be to dump a giant chunk of them on some exchange, but I don't think they'd even want to mess with that.

I could also see them keeping some chunk of them for sting purchases, perhaps after mixing them first (since even a somewhat dim Bitcoin-accepting illegal vendor might just be suspicious of getting paid in coin directly from seized DPR funds).  The agency itself might have no clue, but there certainly are feds who know enough about Bitcoin to handle it as they have so far.  The question is whether they'll have the sense to listen to them if they suggest this, since it's a good idea.  For example, seized drugs are sometimes used subsequently in sting purchases by some agencies, which might be a good reason to be suspicious of the guy who always has the best drugs and always in whatever quantity wanted immediately.

Generally, though, the agency responsible for seizing the assets is not permitted to keep them, especially if they decide to treat BTC as "cash."  (My guess is they treat it as "personal property" which would give them somewhat more flexibility in what they do with it.)

Wasn't anyone paying attention to how the apparatchik behaved during the final days of the USSR?

Those bitcoins will quietly end up in the personal wallet of somebody well-connected.

I'd like to see how that could "quietly" happen seeing as it's the most watched Bitcoin address on the network.

The federal government could dispose of the bitcoins by selling them to the Federal Reserve.  The Federal Reserve is certainly in cahoots with the federal government, but technically isn't part of the federal government.

+1

Giving them the wallet file and whatever passphrase the private key is encrypted with. That's damn near silent.

I think the issue is more around how someone 'well connected' could use the contents of the wallet 'quietly'. As soon as btc started flowing out, people would realise.

I would be interested to know which exchange they will use to cash out.

Al Jazeera weighs in: https://bitcointalk.org/index.php?topic=320392

None. 

If it is anything like the billions of other forfeited assets they will announce ahead of time a day for an auction.  They will auction off the coins and purchasers will wire money TO THE US TREASURY and only then will they send the sold coins. No counterparty risk, no waiting 180 days for MtGox to get their act together, no risk of an exchange getting "hacked" and the US government losing their $20M in BTC.

No possible way the US government using a quasi-illegal Bitcoin exchange.

No. A single dump on a single exchange like MtGox (a stupid thing to do) would bring us roughly around $100/BTC

Over 2 million coins have been sold over the top 3 exchanges in the last 30 days: http://bitcoinity.org/markets/list?currency=ALL&span=30d and yet the exchange rate rose from $130 to $200. So it would be relatively easy for the FBI to sell 174,000 coins on 2-3 exchanges over 30 days and not significantly impact the exchange rate in any way. But most likely they wouldn't even sell on an exchange, they would auction the coins as explained by others.

I feel stupid, I looked at http://bitcoinity.org/markets (http://bitcoinity.org/markets) and 144,000 Bitcoins takes the price on Gox down to $26.

Obviously I am confusing something here?

https://i.imgur.com/J7VTwe9.png

http://bitcoincharts.com/markets/mtgoxUSD_depth.html

Scroll down, use the calculator. I got Sell 174000 BTC for 15591452.58 USD

Also, using the gribble (on #bitcoin-otc) command "market sell 174000" it replied:
A market order to sell 174000 bitcoins right now would net 15593348.9834 USD and would take the last price down to 10.2000 USD, resulting in an average price of 89.6169 USD/BTC. | Data vintage: 0.0078 seconds

So the price would end up down around $10 - $30? I doubt anyone could take advantage of this though, unless it was their orders that got filled.

So if you had an order set at xbtc for $40 you would be smiling after the FBI made such a bad move. Afterwards no one will follow suit and sell into that hole and the price would recover quite quickly.

Anyway, never going to happen.

You guys are right, I was trusting what an article said without double checking the MtGox market depth myself.

Regardless, it would be easy to spread the sale of 174k BTC over 2-3 exchanges and a month to not impact prices.

Yeah they would either spread out the sales over a long time or auction it off to a bank or some high net worth buyer. Being able to buy 1% of an emerging market at market rate without effecting the price on the exchanges is certainly an attractive proposition.

someone got can.