Bitcoin Forum

Does siezed mean someone was arrested and forced to give them control of a wallet?

17. On approximately  April  9, 2013,  the Bitcoin  addresses that received the 70,411.46 B itc oin  from Silk  Road sent 69,471.082201  (approximately  $14  million   at the time  of transfer) to 1HQ3Go3ggs8pFnXuHVHRytP Cq5f GG8H bhx  (hereafter “1HQ3”).  


18. On approximately  April  23, 2015,  1HQ3 sent 101 Bitcoin  (approximately   $23,700)  to  BTC-e, a company that provided  Bitcoin  related services and operated as an unlicensed  cryptocurrency exchange.  In January 2017,  BTC-e and a Russian  operator of BTC-e were indicted  in  the Northern District  of California  for operating  an unlicensed  money  transmitting  business and for money  laundering through  the exchange.
[...]

23. On  November  3,  2020,  Individual   X   signed  a Consent and Agreement to Forfeiture  with the U.S. Attorney’s Office, Northern Dis tr ict  of California.   In that  agreement,  Individual   X,  consented  to the forfeiture  of  the  Defendant P roperty to the United States government.

24. On  November  3,  2020,   the  United  States  took  custody  of the Defendant P roperty from 1HQ3.
 

Someone was forced to give them access to the wallet...

They can't break the encryption on bitcoin and if used well, there's be 3 separate algorithms they'd have to attempt to break before being able to gain access to the funds.

Not legit - not your coins

tl;dr someone who had stolen a lot of bitcoins from Silk Road later sent 101 BTC without using any mixers, coinjoin, etc. to his BTC-e account which must have been easy to tie to his real identity; most likely facing a choice of keeping the money and going to prison for who knows how long, or handing it over and remaining free they went with the latter option.

The second method: If you store bitcoins in one of the government-controlled platforms or wallets, then they can request the platform or wallet to block or freeze your bitcoin.

This really proves how essential it is to never tie your real-life identity to your cryptocurrency holdings.

Given the role that BTC-e played in laundering Gox coins I would assume that BTC-e was their mixing strategy.

It would still be interesting to know how they got caught though, IIRC BTC-e never did any KYC on its customers. Maybe they let their IP slip?

[...]

He may also have cashed out into fiat from BTC-e, hard to do that without exposing yourself and I'm sure the US government managed to find a lot of information on their fiat operations since the taking down of BTC-e.

Given the role that BTC-e played in laundering Gox coins I would assume that BTC-e was their mixing strategy.

It would still be interesting to know how they got caught though, IIRC BTC-e never did any KYC on its customers. Maybe they let their IP slip?

btc-e did start implementing KYC in late 2016 or early 2017. it became a requirement for bank wires to the USA. KYC was never required to trade there, of course.

but yes, it seems entirely possible that he let some PII slip even if there was no KYC. the FBI had a comprehensive copy of btc-e's database, after all. there was a time years earlier when it felt like btc-e was completely out of reach from the feds, almost invincible, and also highly trusted among criminals. i guess it could be easy to become sloppy in that context.

We all have read about the 1 billion in crypto siezed by the gov. In one article it said that the funds were forefieted but that doesnt make sense. Please can someone explain in detail how bitcoin is siezed. I have read every article about this, googled it, and never seen an explaination on how it is done. Im asking for a technical explaination with facts. Does siezed mean someone was arrested and forced to give them control of a wallet? Or do they have a way to take control of a Wallet, and if the answer is yes, I would like to know how.