Bitcoin Forum

A DEA agent (a manager of the analyst department) came to my substance abuse elective class today to talk about drug origins and drug trafficking.  During the class, I asked him whether or not he has heard of Silk Road, and to my surprise he said he had.  I then asked whether or not the DEA is targeting Silk Road due to the small impact of the Bitcoin economy and the difficulty of linking Bitcoin drug transactions to specific individuals.  His response was, "Yes, and just because it's difficult doesn't mean it's impossible."

He actually became very curious and asked me several questions about Bitcoin in front of the class, mainly general questions about what gives BTC value and how the heck I could make any money off of it.  My professor also became very interested, and after class she asked me for a website for additional information about Bitcoin (I just gave her bitcoin.org because it's easy).

Interesting stuff.

I enjoyed reading your post after noticing your username ;)!
The DEA made an announcement about the Silk Road awhile ago, so I'm not too surprised about that. I'm not too surprised if the DEA is keeping very close tabs on Bitcoin.

I'm sure my username is strictly a coincidence.

If you see this cop again, please tell him that last portion of ganja I purchased in Silk Road was the best and strongest I ever had. It made me into clueless zombie.

you got it

In the case of the "drug war," it being difficult indeed has made it impossible, so his words are kinda funny. The DEA fails every day with more easily tracked trafficking methods. Bitcoin is just one more win for the free market demand of goods, and one more loss for the tyranny trying to prevent it.

Exactly.  All paper cash transactions are untraceable, unless you are stupid enough to leave your fingerprints on the bills.  At least bitcoins have some electronic record.  The DEA should probably embrace bitcoins instead of paper cash.

I doubt DEA can keep any close tabs on bitcoin, it is simply anonymous :)

As long as there is no obvious corellation between adress transfering unusal amoun of coins and your real life identiy, you are safe. Speaking of Silk Road, most dangerous is cops busting some seller and using his SR seller account to gather information about buyers.

Use different recieving adress each time you recieve coins. Additionally you might want to run it trough Tor network. Bitcoin is meant for anonimity. And Internet is for porn and Tor hidden services is for drugs and CP.

i've told this story before but i have a friend who's a DEA agent here locally who goes out on busts and works in the surveillance division where you'd think they'd know alot about Bitcoin, Tor, and PGP encryption.  Nope.  no clue.  he's says the difficult stuff gets sent back to Washington.

OMFG such a fail!

There are some really computer savvy people who decided to become rat and work in law enforcement and other 3 letter agencies, but majority of cops are dumb in computers just as general public. The nerds and hackers will win in long-term. I'm positive about it!

I gave this analogy a few months ago.  Bitcoin is NOT anonymous.  Bitcoin simply has different anonymity traits versus cash in your pocket.

You take 100 usd bill from a ATM
You go and buy something illegal from a house using that 100 usd
Later that day the Law kicks in the door of the house in which you acquired your illegal object
They find 1000 usd in 100 usd bills and in some super advanced government DB are able to link one of the 100usd bills serial number to the ATM transaction you made earlier in the day.
Law knocks at your door looking to understand
You tell them that you purchased ice cream for your daughter from a street vendor earlier in the day (got lots of change in 20s).  "I have no idea what that guy did with my bejamin after I gave it to him mr officer"


You buy 100 btc from a, "fully compliant with the law," trading site in which your name and address is registered, and available to the SEC
You go and buy something illegal from a house (website) using that 100 btc
Later that day the Law kicks in the door of the house (website [1]) in which you acquired your illegal object
They find 1000 btc on a laptop after a forensic review of the computers contents (they can do this).  Looking at the block chain they find that 100 btc came from the trading site to your wallet and then to the illegal item sellers computer
Law kicks in your door, because it is NOT possible that you didn't buy the illegal item unless you can forensically prove that you got hacked, and even then the hacker would have been taking directly from your wallet to the illegal item seller, rather to some, "holding," account

I'm in no means discouraging the use of bitcoin, but I do believe it is important for people to understand the traits associated with it.  There are other traits about btc that make it revolutionary to the idea of individual liberty, but casually buying illegal items with it isn't one of them.





[1] in the case of silk road it would be a a seller who had been moving a lot of product (via tor) and his neighbors notice a lot of cars coming and going.  During thanksgiving the neighbors new son-in-law (DEA guy) is told about all the, "traffic from that house."  Point here is that no matter how anonymous a seller is in some perfect anonymous market, they still can draw attention from their buying activities.

Why would you do that?

How about:
* You buy BTC from a guy in my neighborhood by handing him some cash.
* You buy BTC from an exchange outside the US that says frak off United States our nation doesn't give a shit.
* You mine your own BTC
* You buy some BTC and pass it through an anonymizing service a dozen or so times.
* You buy some BTC deposit it on a online poker site, periodically adding and withdrawing funds from a pooled account.

Just because you aren't smart/creative enough to think of ways to protect your privacy doesn't mean other's can't.

I don't for one minute deny that one could partake in other activities to increase the anonymity factor of btc transactions.  What I'm trying to illustrate is that the model of anonymity of btc is different than cash.  People who intricately understand what kind of information is stored in the block chain will understand all of this.  Many people don't understand all of this very well (get use to it) including 99.999% of law enforcement at this time.

I think what I would say to law enforcement is this: money is information and as such can be sent anywhere on Earth instantly, with almost no cost, and in complete privacy.  Bitcoin or no bitcoin, this ability exists.  There was a time, not that long ago, when it was nearly impossible to track criminal activity using the financial system.  Law enforcement needs to understand that it's becoming increasingly difficult (if not impossible) to track criminals using the financial system and they need to adapt to that reality.  There are aspects of the legal code I don't agree with (in particular, I believe the war on drugs does more harm than good...and locking up people for prostitution is beyond ridiculous), but I do believe that we need a system of laws and law enforcement.  I want our legal system and law enforcement to be effective while at the same time respecting and protecting human liberty.

We need to recognize that honest people have a right to private transactions and that this right is essential to our liberty.  I believe that the founders of the United States could not comprehend a day where it was practically impossible for two parties to engage in a private transaction, yet that day is upon us.  Had they conceived of such a possibility, I am sure they would have taken measures to protect this right.  I find it ironic that a tool such as a computer and the internet affords us so many freedoms of communication and yet, it poses such a dangerous threat to this most very basic human right.  I believe that the next amendment to the US constitution should be one that protects the right to freedom and privacy in financial transactions.

Why would you limit it to financial transactions?

Google and Facebook provide "free" services in return for data-mining your life an pushing you targeted advertising.

The customers of Google and Facebook are actually the advertisers. The users are the product being sold.

Which still only gives you the names of a bunch of potheads who don't actually sell anything, just like tens of millions of others in the country. You could get the same by asking around at a jam band festival.

You are assuming the buyer purchased the goods straight from his Mt Gox account. Im not even sure if you can do that, without transferring the funds to your private wallet, but even if you can, you would have to be drop dead stupid to do that to buy drugs. Moreover, it would require a court order for Mt Gox to hand over his personal details (assuming they even have them). Its not impossible, but its unlikely and assuming utter stupity.

Thats not to say bitcoin is untraceable if your paint a more realistic scenario where the bitcoins are sent from mt gox to a private wallet and then to the seller, but it will become orders of magnitude more difficult, and damn near impossible if you use some precautions.

If you want to catch silk road buyers, the obvious way to do that is to pretend being a drugs seller on Silk Road. Not sure about the legality of that tactic though, where I live I think that would not be legal but IANAL.

It would require a court order if MtGox didn't offered already to hand your head in a silver platter the minute they ask for it... And Britcoin/Intersango will do the same...

http://in.reuters.com/article/2011/06/15/financial-bitcoin-idINN1510930920110615

You guys are really clueless sometimes.

Where does it say they hand out private information without court order?
Regardless, that is not the issue, when it comes to drug trafficking or other illegal activities, its usually not a bright idea to hide behind a need for a court order.

And since when does an exchange owned by a japanese company need to comply with a US warrant?
They offered their colaboration, they went to DEA, it was not DEA who went to them to ask for help... that says it all. Or can't you add 2+2?

IM perfectly fine with them "cooperating" with the DEA or any other law enforcement agency. Cooperating doesnt mean handing out private data without appropriate legal request. Just explaining them how it works is a form of cooperation. For all I know, it might even be illegal for Mt Gox to give that information to the DEA or anyone else without court order.

But this is irrelevant to the discussion; anyone dealing in drugs is going to have to assume a court order will be given. Assuming anything else, and relying on Mt Gox or other exchanges to protect your privacy when you are committing crimes, thats whats naive.

Agreed. If was in any of the exchanges shoes I would also comply, probably even with informal requests for cooperation, at least if I wanted to keep my liitle unregulated financial service going ;)
I just wouldn't say it's naive to expect the exchanges to keep users anonymous, i would say it's EXTREMELY naive. :)

I'm not sure what exactly you mean by this, but my impression is that you mean that the blockchain retains more "traceable" information than cash does.  And you refer to the example that cash could have passed through the hands of an unidentified entity before reaching an identified destination, while bitcoin cannot (without leaving "evidence" of that in the blockchain).  And that this situation gives "plausible deniability" to anyone (for cash), while it does not (for bitcoin).

If that is what you meant, I disagree.

The blockchain tracks all transfers of bitcoin from one address to another.  However that is not the only, single, exclusive, way of transferring bitcoins.  I can just as well have bitcoins in a wallet and give you an USB stick with the wallet file.  Now the bitcoins are yours and you can spend them on things that I (and maybe the law) disagree with.  However, YOU are the responsible one, not me.   Yet there is no trace in the blockchain of me transferring the coins to you.

This example shows that your argument (or what I assume yours is), is wrong.  I can pausibly deny the responsibility, pointing to you (the icecream vendor), just like in the cash example.  All this in a world where icecream vendors accept bitcoins on a USB stick, which is probably also the world where LEAs want to raid your home for bitcoin transactions.

PS: Of course I know that my example has side implications, like the risk of me (double-)spending the coins quickly before you can, and also that I must have had the precaution to fraction my coins beforehand so that I can "offline-"assemble an arbitrary amount just by arranging a wallet for you (without recurring to the blockchain), etc.

I believe the DEA are more interested in determining who the administrators of silkroad are at this point. If they can't figure it out, then they'll start targeting domestic dealers.

Anyone else notice the feds harsher stance on California since the debut of SR?

My guess is that with the resources the US government has at their disposal (both manual and fiscal), not only could they probably find any silk road user if they really wanted to, but they could also probably locate the 1934 s penny that the user lost in a Walgreens parking lot on May 14, 1996.

Having worked as a defense contractor I would say the capabilities of the US govt are often over estimated.

It is more like:
The govt contracts to have a machine that locates pennies built.  It takes a couple years and millions of dollars but finally a contract is secured for $128M to have DOD penny locating machines mission ready in 5 years. 4 years into the project the administration will change and the new Secretary of Defense will make significant changes to the scope of the project (they now want it to locate dimes also).  Significant work will need to be scrapped and redesigned pushing the timeline back 7 years.  A couple years into the new project the CBO will report that prior estimates were invalid and the project cost has exploded to $1.3B.  Shortly before the project is completed major components will be completely redesigned and a new contractor will take over because now there is a "need" for penny locating machines to be "stealth".  Our enemies might be using stealth so we need to also.  Now nobody even knows what this vague requirement for "stealth" means so the project will be put on hold (but still burning $24M in taxpayer funds each year) while a separate project is launched to develop "stealth" technology.  Some years later (now two decades after original proposal) the stealth technology will be ready but it is incompatible with existing penny locating components.  Since that was outside the original contract it will be an additional cost.  A side note contractors are much better at writing contracts than the federal government.  The good news is integration will "only" cost $12M and take 18 months.  However ironically this is where Congress decides to put their foot down.  They end up spending $50M over 3 years in investigations, outside analysis, and contracts for alternative designs before concluding that while mistakes were made no laws were broken.

Finally the penny locating machines are deployed nationwide however 5 years prior the US mint had already stopped minting pennies and they are out of circulation.  A final contractor gets a juicy contract to securely remove the penny locating machines, dismantle them, and store the parts in case they are needed at some point in the future.  All together the project will take nearly 3 decades, cost $2.2B and never locate a single penny outside of testing.

My speculation is based upon the assumption that there is a lot of top secret stuff that some extremely intelligent people are working on.  If they can process the human genome, they can find some dude that leaves definitive traces of his actions through a computer.

I had a TS w/ SCI (well technically still do it just is expired) and worked for one of the largest defense companies in the country/world .  No doubt there are smart people in the govt.  There are smart people everywhere however the bureaucratic nonsense in the US government crushes innovation.  Most govt contractors are more interested in maximizing company profits (because that is what gets you promotions, payraises, and stock options) than delivering the best product to the government.    

Human Genome is an interesting project.  First of all it was run by a NGO (not the govt) but since it was funded partially by the US govt even there they managed to horribly slow the project down.

It began in 1990 and took 10 years to publish the rough draft at a cost of roughly $3B. In 1998 a private company spent roughly $300M and in 2 years ALMOST passed the public human genome project. The public program barely (by about 42 days) beat the private venture.  Now that is a good thing for human race as it put the data on the human genome in public domain but it kinda highlights the inefficiencies of any program the govt is involved in (and remember the govt didn't run the project, they merely provided oversight and funding).

Public program (w/ heft govt bureaucratic interference): $3 billion in funding, ~10 years to complete.
Private program:  $300 million in funding, ~2 years to complete.

Quoting extreme OPSEC failure before edit (if true).  I really, really hope DoD adjudicators would not clear someone who would do this.

Stating clearance is no violation.  It is listed on my resume (when relevant) which "gasp" has my real name on it.  Without "a need to know" a clearance can't get you a cup of coffee. 

BTW: Investigations are done by the fine folks at Office of Personnel Management (OPM) not the DOD.

The government didn't do a damn thing to process the genome.

DeathAndTaxes, that is the best analogy I have ever heard. You, sir, are a poet.

 ;)

I ask half of the people I chat with over PM if they have PGP. Mostly out of curiosity. It's sad that the majority of self-claimed crypto-currency enthusiasts are not prepared to protect their own communication.

That seems strange. 90% of my communication with individuals is encrypted using OTR. even people with no interest in cryptography (but dont like me shouting at them if they dont use it lol)

TOR is not foolproof by any means and if you think the D.E.A. is not all over SilkRoad by now than your just being Naive. Don't forget fellow U.S. citizens about G.W. Bush's Patriot act. We have no rights at all in regards to privacy over the internet, and in this post 911 era being a drug dealer selling drugs online you mine as well be a terrorist because they can blur the lines so easy and turn one into the other.

The funny part is - its most likely safer to be a seller in EU then to be a buyer in the US.

All I want to know is, WHY in HELL did you CHOOSE to take a government propaganda class?

Probably he didn't choose, he was forced to, even if he doesn't realise it and thinks it was voluntary lol

It's a substance abuse class?

And it's an elective?

And it fits my schedule?

And it's easy?

D.A.R.E. taught that acid and mushrooms were bad because it'd expand our minds and we'd see and hear things that were not there. It wasn't science class, so none experimented.

http://wbpd.com/dare.gif

I worked in a SCIF with TS SCI in the military and the incompetency and waste I saw daily was astounding.  I often had imagery of taxpayers gathering up piles of cash for the government to come pick up and truck to a facility where they paid workers $5/hr to shovel it into a furnace.

I was told it cost $50k to do the background check for my clearance.  After about a year or so I was told that administration lost all my paperwork (whoops!) and I got to be a paper shredder / groundskeeper with the seabees for a couple months while the whole thing was re-done.  As an experiment, one day I went the whole day without touching my mouse once to see if I could do it.

I'm sure there are groups in the government that are efficient and organized, but I believe that to be the exception and not the rule.  Everyone I trained and worked with had TS clearance and most weren't that intelligent.

Let me re-clarify my assumption...

I think that all top-of-the-line governmental agencies/personnel/projects are likely classified.  While I think agencies like the DEA are legitimate in the sense that they are given either objective or general goals and are expected to achieve them to a certain degree, I think the true capabilities of the government are kept hidden such that the general population only sees the broad surface rather than the dense underworkings. 

I suppose a speculative analogy would be science -- we can read all about on-the-horizon technologies in magazines like Popular Science, but my guess is the government has brilliant scientists who are well-aware of (or who have already developed) technology 20+ years ahead of our current time...the fun stuff like teleportation of poly-atomic substances or cloaking.  I also speculate this is true in the field of intelligence gathering, and I seriously wouldn't be surprised if the government has the ability to listen to and track any conversation had by virtually anybody, anywhere, at anytime. 

Now, keep in mind I understand the fine line between paranoia/conspiracy theories and simple plausibility.  But, seriously guys, tracking Bitcoin transactions can't be harder than much of what the government has already done.  If we can blast into space and STAY there or build a plutonium bomb, we can crack cryptographic hash functions.

Yeah except they can't.  You may not be aware but the CIA started a venture capital firm to invest in emerging high tech industries.  Why?  Because the explosion in productivity in the private sector has caused them to fall further and further behind in high tech fields like data analysis, distributed computing, crptography, wireless communication, etc.  When you combine that with the crushing bureaucratic insanity that has become the US federal govt and the complete dominance of the military industrial complex which siphons off obscene profits in bloated over-budget unnecessary systems you start to see that the federal govt isn't as leet any the Tom Clancy novels portray it.  

NASA can't even get to the moon anymore.  They lost most of that schematics and blueprints because they didn't have the budget or foresight to properly archive them right.  All that knowledge gone.  The Space Shuttle was suppose to be replaced in 1990 and we kept it running until this year with bailing wire and duct tape (killing a dozen astronaughts needlessly in the process).  Hell if weren't for the Russians and their 1970s era transfer pod we would have no choice but to de-orbit the international space station and watch that $150B project burn up on re-entry.

You don't need to fear the US govt seeing through walls, cracking uncrackable encryption, or analyzing your brainwaves.  No the reality is more mundane and scarier.  They will simply take your civil liberties away, bust into your house without warrant and hold you indefinitely as an enemy combatant.  Alternatively the President can sign your assassination order with no due process regardless of your Constitutional rights. Who needs fancy science when you simply use a police state to exercise control?  It is far cheaper and far more effective.  Throw a couple surprise twists in American Idol and your neighbors won't even notice it happening.

Yes, and they can also levitate without using fart gases. The space travel and plutionium bomb is engineering and scientifically plausible. The ability to crack SHA256 hash function will ruin the Bitcoin, this is nothing to do with tracing bitcoin transactions to real life identities and transactions.

My guess the reality is more like:

I agree with everything except your bitchin' about space. The US government is so far behind in technological frontiers that it is embarrassing. For christ's sake, local police can't even get their rape kits processed or their DNA evidence run, and that is barely high school level genetics these days. I was running an experiment with yeast and inducing and mapping double-crossover mutations with UV light this year with friggin seventh graders. I didn't learn that shit until college, and even now, a handful of years later, everything I learned is completely out of date.

Extrapolate that to technology, which is infinitely more expensive and equally complex, and you've got to realize the government can't keep up. It's just like any industry...bigger=bloated. The little corner store might have some kids swipe some candy, but they run a tight ship because they can see the whole thing. Scale that up to Best Buy, and they are dealing with massive credit fraud, employee theft, regular theft, vandalism, liability, low-wage workers driving forklifts and operating dangerous machinery...They are huge so they can absorb it, but they can't keep their ducks in a row. I imagine that there are some guys in the CIA who could track you down through a couple btc addresses and a throwaway gmail account and social engineer you into oblivion, just like there are a brilliant PhDs driving truck for a living. They don't make up the standard of the industry, in this case bloated shitty underfunded bureaucracy.

Space is fucking awesome. It is a frontier. It needs to be conquered. If I wasn't math-tarded, I would have gone into aeronautics to try and see it. Instead, I settled on marine biology, my closer frontier.

That turned into an unintentionally long rant. Apologies.

  I think you misunderstood or I wasn't clear. I consider space exploration to be essential to the continued technological evolution of the human race.  I was just pointing out NASA awesome track record from 1950s to 1980 and then blundering two decades of mostly failures, project overruns, missteps, and lack of cohesive direction.  NASA is an example of how bloating inefficient government programs become never ending blackholes for money with little tangible progress.

Now NASA has done some good things post 1980s but it lost its drive, it lost talent to private companies, and it got crushed under never relenting layers of bureaucratic nonsense.


I agree 100%.  I just find it sad that the agency who went to the moon on 1960s technology now admits they can't do it today.  Somehow instead of advancing they regressed and lost invaluable information.  Information that if it had been made open source (a foreign concept in 1960s) would still at least be alive today.

If it were up to me NASA budget would be larger but everything they do would be open sourced.  Yeah I know it will never happen.

Gotcha. I am interested to see what comes of the privatized shuttle industry, if it comes to fruition. We need to start another space race for morale.

If you see him again, get him to verify that silk road is owned and operated by the DEA :D

You want to make a bet on that? It's obviously being tracked, your dumb to think otherwise.

The DEA prides itself on big hauls and tends to leave small stuff to the locals. Success in their line of work is measured in kilos and tons.

I can see them making a bit of noise about SR crackdowns to discourage use of the site, but it's hard to imagine them dedicating a ton of technological resources to a relatively tiny number of people selling each other dime bags over the Internet.

I could be wrong, but it seems like it would be a waste of a lot of time, energy, and money for very little return. Granted, that statement could apply to all drug law enforcement.

Interesting...haha

This.

I believe any threat to bitcoin isn't going to come from the FBI,  Homeland Security or the DEA...  the honest to goodness threat to bitcoin is going to come the IRS.

At some point in the future someone is going to have a bunch of bitcoins sold at Mt.Gox or whatever,  then when he tries to transfer the money to his bank account that's when the IRS is going to start asking questions..  freezing accounts.. etc etc...   

That's when it becomes a problem,  not when when the transfers are in bitcoin,  but when someone tries to convert it to another currency...   as long as the guy hangs out in bitcoin only most likely he is fairly safe... but the second it gets converted the IRS is going to start asking questions...

That's just my two satoshi's.

If you are a SR buyer, encrypt your wallet and never sign for a delivery, you are fine. You can only be busted by a PI if they get you in a controlled delivery which requires a signature. And the idea that the USPS would spend resources on a controlled delivery for personal use amounts of weed or pills is laughable. If you are buying a kilo of cocaine or heroine however, expect a controlled delivery and if you don't sign, expect a warranted search of your house/apt.

But in what sense is that a threat to bitcoin?  If that person is properly accounting for income or gains from bitcoin, they're not breaking any law and they are paying their taxes.  If they aren't, well, then that person has an issue with the IRS, but it's not really a bitcoin or an exchange problem.  It might cause the IRS to pass some new regulations regarding individual and business reporting or record keeping when it comes to bitcoin.  This might even prompt people to write new software that helps them track things like capital gains on bitcoin investment, etc.  Now, of course, people can operate entirely underground (both individuals and merchants), but that happens all the time today, irrespective of bitcoin.

I think money laundering is the more immediate issue.  It's an issue that the exchanges need to be very careful about and make sure they're following all the KYC and AML laws.  Personally, I think law enforcement needs to give up trying to stop money laundering.  There are just too many ways criminals can launder money these days (again, irrespective of bitcoin).  They should focus on other techniques than tracking or stopping financial transactions (and tracking everyone's financial transactions is too great of a threat to people's liberty for it to be an acceptable law enforcement tool).  It may take a while, but I think in time, law enforcement and the public at large will arrive at similar conclusions.

That's exactly why they would do it, they need to justify their budget if they want to keep it.  Going after "a webring of drug dealing kingpins" goes over well in the press and in their budget review. 

I think you hit the nail on the head regarding "waste of time, etc...". The reason silk road isn't going anywhere anytime soon is the size and scope. It is naturally restricted to a small internet community (relatively speaking) due to technology requirements.

Getting there with the Tor network is pretty straight forward but then going through the trouble of learning how bitcoin works, how to get funds from your hands to an exchange, how to then get the bitcoin to your wallet, then to SR will make your average user's head spin. Then throw in the fact that most seller's require PGP for messages within SR and the user now has to learn to use PGP ...suddenly the average user's head explodes. Easier for them to find some shady friend of a friend to get stuff from on the street.

This limited flow on SR would be like the cops wanting to spend hundreds of thousands (if not millions) of dollars in man hours and technology to bust a a few kids selling playboy magazines to a bunch of 15 year olds when real life politics and public relations force them to do the morally superior thing, i.e., spending those same resources hunting down and prosecuting peddlers of child porn.

I am surprised no one has talked about Mises and his work in Human Action about government's inability to perform Economic Calculation (https://mises.org/humanaction/chap26sec1.asp). That is the root problem of their inability to allocate resources without tremendous waste and there is nothing they can do about it. And this is even more pronounced with technology which because of complexity that requires greater division and specialization of labor.

Plus, it all comes down to the cost of protection and return on investment from extortion. Sure, if the NSA is really after you then they are going to find you and could even run a Tempest attack (https://en.wikipedia.org/wiki/Tempest_(codename)) via Van Eck phreaking if they wanted to. But even in bureaucracies there are limited resources which have to be allocated. DEA agents are going to go after the targets where returns from civil forfeiture are highest because that is how their budgets are funded (http://www.forbes.com/2011/06/08/property-civil-forfeiture.html).

Sure, tracking bitcoin transactions is possible but is it probable? Probably not because tracking that takes 2 minutes with Paypal or a credit card takes hundreds of hours and tens of thousands of dollars with bitcoin. The cost of protection massively plummets while the return on investment from tracking or attempting to seize, etc. skyrocket at exponential rates. Thus, Bitcoin functions like all other forms of cryptography with intractability (https://en.wikipedia.org/wiki/Intractability_(complexity)#Intractability) and therefore creating strong surveillance protection.

Feds have broken up highly sophisticated Eastern Euro hacking groups that stole credit cards and operated in total anonymity by just infiltrating the organization, gaining trust and waiting for them to drop their comsec eventually, or bleeding them for intel. Obviously they are doing the same to SR. I remember SR 'hiring' for database admins in the news once you can be assured all the applications for the job were feds.

If they are eventually busted it definitely won't be due to bitcoin txn tracking, it'll just be informants and entrapment like they've always done. Sabu is probably their database admin working from FBI hq.

Stands to reason that whoever runs it probably runs their own bitcoin hosting company as well, since you wouldn't trust that kind of a server in anybody else's hands and the front company would help you launder the funds. You would also be the guy they go to and ask to retrieve the box should anything happen, allowing you to cut the power to it or push your deadman switch to nuke evidence before handing it over. Lot's of methods that don't involve any transaction tracing the feds can utilize though I would imagine one day SR will shut down, I wouldn't want to run something like that forever when you had enough money to retire to a beach mansion and be able to sleep without worrying about door being kicked down

It's real alright. Why? Cause of convenience, safety, quality, you know all the other attributes of a services that makes it more attractive than it's competition..

Yeah now that stoner kid buys his dope off SR and sells locally :)

Exactly!

Yeah but did everyone know a kid who could easily get them other drugs?  Does everyone know how to get hold of research chemicals (which you typically have to get from overseas anyway)?

I think it's inevitable that at some point law enforcement somewhere will use SR as a honey-pot.  That doesn't mean that SR started out that way, though.  The one issue I see for users is that in many places buying locally wouldn't put them at significant legal risk - if they got caught they'd be looking at a minor possession charge or a caution.  Once they're buying from overseas, though, the risk of importation charges arises and those tend to be more severe.

lol

Is this legal for DEA?

It is if the seller agrees to it in exchange for a lighter sentence.

This guy (https://bitcointalk.org/index.php?topic=85102.msg938822#msg938822) says it is possible.

With a little work, apparently.