Bitcoin Forum

Front page of Yahoo:
http://news.yahoo.com/norwegian-man-buys-flat-forgotten-24-bitcoin-investment-174651722.html

Front page of Reddit:
http://www.reddit.com/r/worldnews/comments/1pgr6p/man_buys_27_of_bitcoin_forgets_about_them_finds/

Wired:
http://www.wired.com/wiredenterprise/2013/10/bitcoin_atm_gallery/

FYI the dump will come when the FBI decides to liquidate the SR coins, which could be at any time.

it's positive news. shows what a smart, risk taking, forward thinker tried. he got rewarded well.

FBI can't legally dump anything until the whole case goes through the court system.
then it will be publicly auctioned at market prices (not sold with slippage). fbi etc also wan'ts to maximize their returns.

That particular story seems to have grown some legs.

Also the FBI can't just dump the coins whenever. See the thread about it in the legal section.

Edit: after perusing the comment sections of these stories, seems that many are genuinely curious and less skeptical. They don't want to miss the boat this time.

http://www.youtube.com/watch?v=aITEmlIzBNY

Love those ignorant comments on the yahoo website. We still have a long way to go, so much more potential left.

Ignorance is a choice in the age of information.

Still haven't seen the legal argument as to why the feds can't file for civil forfeiture in parallel to the criminal case. It is not out of the ordinary. If they did that, they don't have to wait for conviction. If Ulbricht can't win an "innocent owner defense", they can has all the coins.

since this is the first case of it's kind in the system i'm sure there will be many new rules created, interpreted and applied. i doubt the gov is rushing to liquidate at the moment.  regardless, when they do sell (they'll prob give it to their buddies at goldman sachs to liquidate) i'm sure they will try to attain the highest prices. no reason not to

Regarding the bolded, I don't think so. In practice, I think, this is really no different than luxury cars bought with drug money and sold at auction. Bitcoins derived from illegal activity... they have value... they'll be sold at auction just the same. I just see no legal reason why the feds can't approach it as a civil forfeiture.

you *may* be right. it's to be seen. forfeiting what "bits of information", numbers? it's a bit more complex that's why i think they will take a bit more time. they first need to prove that *all* those bitcoins were derived from illegal activity. that's going to be a bit of work, explanation involved. also, i'm guessing some of the coins confiscated weren't involved in illegal activities at all, were seized maybe off international servers, were seized from non-us entities (people or foreign governments - who knows). they will likely be smart, take their time. i'm guessing.

It's not more complex than that. Whether bitcoins are "bits of information" matters not. They have already seized them. As for proof:

http://www.law.cornell.edu/background/forfeiture/

The burden will be on Ulbricht, I am quite sure. Can he provide an "innocent owner" defense? Based on all the presumed sloppiness, I doubt it.

mbatc, you are aware that the government is possesion of coins NOT *allegedly* belonging to Ulbright.... they were seized from people who had an account on his site. servers were located in ireland fyi (based on latest info). some of the coins belonged to SR users. both buyers or sellers who may or may not have committed something illegal in their country (there are about 200 of them today) and some may have not bought or sold anything at all. how would you like to wake up one day and have your assests seized by a foreign government. o too bad your car is on the ship to china, nothing you can do.

seizing something doesnt make it legally seized. thats why there are courts and judges. the legal system is in place for a reason, right?

Do you know why people complain so vehemently about asset forfeitures? Because they are often carried out on completely baseless pretenses. Fortunately for governments, the burden of proof is quite low.

I am aware that they seized coins from SR servers (belonging to users/escrow). They are also in possession of a much larger stash that is presumed to belong to DPR.

You don't understand what I stated earlier. Owners of those coins will need to petition the government for remission -- and unless my earlier presumptions were wrong regarding the ability of the government to at least loosely tie the coins to illegal activity -- they won't. The burden will be on the owners, not the government.

Here's an example of how the government sees it: A drug dealer's house is raided. On one corner of his desk, he has $10k earned legitimately. On another corner of the desk, is $10k he earned by selling drugs. One thing is certain: Without providing the government detailed records (pay stubs, bank statements, etc.) that show a legitimate source for that money, the entirety will indeed be taken by the government.

Sure, they've been seized and not forfeited. But if you look into asset forfeiture in the US, you'll find that it is much easier to achieve forfeiture than to convict.

 :-[ the FBI is not going/able to touch those bloody coins for years, stop being ridiculous.

Should be an interesting thing to watch.  Normally, cash would be held as evidence until after the trial.  In bitcoin, the evidence is totally public, so there is no need to hold the coins themselves.

If the government dumps the coins before the conviction, it will send a very strong signal that the federal government "gets" bitcoin and has a huge amount of faith in the mechanics of the system.

If the government does not dump them, well it just means they are the dinosaurs everyone was expecting anyway.

Well, it seems like the FBI is slightly more functional than the rest of the government, so I wouldn't be entirely surprised if they actually figured out how to use online exchanges without tanking the value entirely  ;D

And introducting 160k+ new coins to the market isn't necessarily a bad thing. I mean, yes, it is bearish short term, but long term the markets need more liquidity and that means a combination of more money and more coins.

I actually would not be surprised if the FBI did something like the following. I think they may very well sell the coins at 10% or more below market price but only in blocks of say 500 or 1000 or more. Therefore, pricing out a lot of bidders, but giving people with cash the opportunity to have some coins below market price for the cost of quick liquidation.  

Otherwise, they wouldn't be able to liquidate them as quickly and they would threaten the markets. They have no incentive to do that.

In theory they "can" in reality they "won't".

Remember asset forfeiture may seem like a big deal to us but it is routine for the feds.  If they win the criminal trial the forfeiture is a done deal.  Prosecuting two cases means splitting resources or running two teams.  Even the DOJ (and it is the DOJ not the FBI who will prosecute) has limited resources.  They likely have a backlog of hundreds of criminal and civil cases.  Lastly prosecutors don't want to give away any of their game plan.  Having the forfeiture trial first allows the defense team a "do over" on the criminal trial.  They get to see the prosecutor's play book and adjust their response.  Those are the big ones but there are other minor reasons as well.   It just looks bad in the court of public opinion "stealing the man's money before he is even convicted, whatever happened to justice  blah blah blah".   Even if the prosecution tried the defense likely would file a motion stating they lack the resources to handle both cases and the same time requesting one or the other be continued.  

So yes they "can" do the forfeiture first, during, or after the criminal trial but in reality they will wait for him to be convicted just like they do for thousands upon thousands of other criminal cases every year.

Also not sure why people think the SOVEREIGN NATION OF THESE UNITED STATES (bold for emphasis and officially sounding presentation) is going to use a Bitcoin exchange.  Forfeiture auctions don't work that way.  The federal government isn't going to take counterparty risk.   They will post a date for the auction and if interested YOU wire funds as a deposit directly to the treasury IN ADVANCE.  Don't want to pay by bank wire, don't want to pay in advance.  Tough you don't get to participate.  Remember this is a government (arguably one of the most powerful on the planet).  They make the rules and you follow them or you don't play.  The government isn't going to put $20M on MtGox or BTC-e (where the fuck is BTC-e located east bumfuckistan?) to have it "hacked" and stolen from them.  
Never going to happen not in a million years.

^ This guy makes sense.

To take another mans Bitcoin is against my religion. I am deeply offended by the actions of the FBI.

I've seen a bunch of stories where EU LE  apperantly just liquidate any seized bitcoins.  Perhaps someone has actual exchange info where they did this and not just a news story.  As per OP I would love for the FBI to dump their load ASAP.