Bitcoin Forum

What if(when) feds decide to sell seized coins?

https://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX (https://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX)
https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH (https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH)

Can you imagine price drop, panic it would create and how would ignorant people react if they start selling all they have when fake news from China comes out.

It would totally saturate exchanges

when it happen, BTC prize will collapse ::)
BITSTAMP vol 24h: 2,385,814 USD
BTC-E vol 24h: 5,049,766 USD
only around $7.3 M
Silkroad Seized Coins alone $12.5 M  :o


many people send few BTC and leave public note there, interesting  ;D

we will all die with our worthless btc

it's so sad how fragile BTC actually is :(

Not likely. They aren't going to create an account on an exchange and sell them. It's clear that they would auction them off. A large hedge fund or conglomerate would most likely buy the coins. Why do you think that a federal agency would sell the coins on an exchange? That would be like the DEA or ATF selling confiscated cars on eBay motors. Try not to worry so much. There is strong buy support at $350 and many positive things on the horizon for Bitcoin. In addition, the stock market looks to be entering a phase of extreme instability. Cryptos and commodities will benefit greatly in such a climate.

Assuming they did auction them off - if there was market movement leading to a lowering in price I'd be more than happy to gobble up a few more coins at a lower price. Honestly, I doubt that will be the case though, more likely there is no sale or the sale has little to no impact on price.

I'm just afraid that they would do the thing that would screw BTC the most. Like holding all this just for screwing things up if/when times comes up.
 

we are doomed :D

hope not lol

There are other coins to take BTC place :)

The FBI is not that stupid, to sell the coins at a loss. And there are legal issues also. They can't sell those coins until the trial is over. And even when it is over, they need permission from the court. All this will take a few more years. So my advice is not to worry about any sale by the FBI.

there are indeed.
whilst all eyes are over there... I'm making trades over here, and what bargains to be had!  :-*

If Barney sells, I buy it :D

The government is hodling waiting for the price to jump.

Does a single soul who thinks this through honestly believe the US government would send their asset to a quasi legal exchange in a far off country and dump immediately?

There are already buyers who have gone public offering to purchase the entire lot before it even gets to an auction. No doubt it will crash the price on the exchanges because folks seem to enjoy nailing themselves up the arse for the pure joy of it.

Hope they'll think like pension fund managers ... ::)

Do they even have the private keys for the addresses? I thought that the .gov had not recovered those. If they don't have them, they won't be selling...

Feds lost their Bitcoin in MtGox....... I doubt Mark will be around much longer, he will simply disappear...

I kind of think people would be like taint ! lol
But honestly they may be one of the most valued reserves the Fed has in the future lol
Fort Knox is gold and unknown amounts
But Bitcoin Fort Knox is Visible Reserves  ;D

The feral government would be foolish to sell any seized coins.  Their black ops will just have to buy them back at a higher price.  Instead, they will get laundered and the proceeds will be used for bribery.

I saw this article a little while back, don't know if there has been any developments, but I doubt they would just dump their coins...

http://www.businessinsider.com/falcon-global-capital-offers-to-buy-the-fbis-bitcoins-2014-2

Can they legally do that? The coins are internationally owned, and no government has international jurisdiction.

I would love to see the drug dealer who asks for his money back from the FBI
Uh this violates the law these are my Bitcoins
Why don't you have a seat
Uh Nvm

They have to prove Ross Ulbrecht's guilt first- that may take a while.

Hmm. The US govt has a (tax) stake now so unlikely to dump the coins without thought for market impact

Some time they no need any law or any jurisdiction about this they have power they can do this

Even if they succeed in it, there is no way to prove that all of the coins belong to him. Actually they belongs to dozens of Silk Road users and vendors, with most of them outside the US jurisdiction.

They won't sell  the seized coins.....at least not yet!

this is a good point, I did not think of that at all :)

When the coins are sold, they'll probably be sold off in smaller amounts. It wouldn't be possible for them to sell the coins in one go as who'd buy them all?
I'd say they'll be sold off over a period of a couple of weeks.
With the ease of supply, the price won't be affected too much. In this case it's not about an increase in supply as the coins are already in circulation. It would be more of a case of buyer confidence that would determine whether or not the price level would be affected. If people believe in BTC for what it is, it'd get snatched up at the market rate. If you only look at BTC in terms of its USD parallel then yes, price may fall quite a bit.
Remember, when you're valuing the coins at 12.5m, that's at the current market price. Who'd spend 12.5m if they know as soon as they'd buy it, it would drastically drop in price  ???

IMO, there's no need to be concerned.

I don't understand why people freak out so much about the price dropping. You would think people would be more concerned that the US government has such a large holding of Bitcoin.

When they sell them they will be redistributing the coins. Yes the price will drop but coins taken out of circulation by the US all of a sudden go back into circulation. The US government can only strengthen its position against bitcoin if it holds the coins. They don't possess enough to truly tank the market if they sell everything now.

My guess is that government has no intention of selling its bitcoins any time soon. They are just like the rest of us right now...waiting to see where this is gonna go

Another factor to watch for when trading

They transferred them, so I am going to have to say, "yes".

That hasn't stopped them in the MegaUpload case.  They seized everyone's files (in the world) and tried to destroy them, and most of those people were outside US jurisdiction.

There is no, "The government wants".  The US doesn't work that way.  Despite all the articles you see, we aren't that corrupt (yet).

There are strict laws that the US has to follow concerning the auction of the coins:

1. Once the case is over, they are required to auction the items to the public for market value.  Until then, they are not allowed to.
2. It will be a private auction listed on one of their auction sites.
3. The coins will be listed in lots.  I don't know how many lots, but at least 10 and probably no more than 1000, but if bitcoins are too much then, they may list even more lots (otherwise nobody could afford to buy them).
4. The coins will be held until DPR is proven guilty.  And maybe even until his appeals are exhausted.  That could take years.
5. They will probably stagger the ending dates of the lots over a 2-3 week period.  They often do this with other things.

But do those laws apply to bitcoin? The purpose of forfeiture laws is solely to raise money. Forfeited items are sold at market value and the money from the sale is put in The Department of Justice Asset Forfeiture Program.

http://www.justice.gov/jmd/afp/02fundreport/02_2.html (http://www.justice.gov/jmd/afp/02fundreport/02_2.html)

But what happens when money is seized? There is no sale. No auction. The money goes straight into the fund to be used on other LE activites and government programs.

So what about bitcoin? Is it seized property or seized currency? If they classify it as a currency then they could sit on it. No sale would be required. They would at some point have to spend it, but why not wait a year, 2 years, 10 years?

Yea I'm on the opinion they would hold for the best time to maximize profits.  So it would be strategic and cause alot of weak hands to let go.

Then this is a very bad news. But I hope someone will argue that destroying files is noway similar to seizing currency from someone's account. In case of those files, they can argue that some of them were illegal. But in the case of currency, there will be no such arguments.

LOL

Yep, so fragile a fork, relentless attacks, ridiculous IRS rulings, Gox, & government bans have yet to kill it.

Even if you bought at the top of the $30 & $266 bubble, at $450 now, show me any investment that has matched it!

Yep, fragile...

Yeah, I am not insider (or even a US citizen) but that agrees with my understanding of how civil servants think and work (being one myself).  I would also guess that, probably

* The people in charge of the sale are not particularly motivated to obtain the maximum possible price for those coins,  since their pay does not depend on that; but

* Their first concern is not doing anything that they could be reprimanded for, such as failing to follow the laws and regulations, or making clearly stupid decisions -- such as choosing lot sizes and dates that result in  too few bids.

* As long as they get enough bids, they will not care for the effect of the sale on the BTC price.

* They will not care if someone buys the coins for X at the auction and immediately sells them for 2*X.  That sort of thing happens all the time at government auctions.

* In their view, all the coins and other assets seized from SilkRoad belong to DPR (& associates?).   If the court confirms the seizure and authorizes the auction, all the money goes to the US Govt.  Otherwise, all the assets will be returned to DPR.  The concept of "client of SilkRoad" must be meaningless before US law, except for its bad implicatons.

Makes sense?

Yes, they've already moved them to another address.

1FfmbHfnpaZjKFvyi1okTjJJusN455paPH (https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH)
1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX (http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX)

Quite funny... to watch all those people begging.




And some intelligent people have realized the advertisement potential:

The two addresses in question are the two addresses that are owned by and set up by the FBI.  As they found BTC they transferred them to these two addresses that they control.  I do not know exactly how they found/got the BTC to transfer them, but the fact remains that they control the two addresses:

https://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX

about $15,167,478.74 (when I posted this) from the Silk Road web site/server.

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

about $73,816,259.11 (when I posted this) from DPR himself.

They have permission from the courts to auction off the smaller amount - the amount they took from the silk road server.  The larger amount is tied up because DPR has claimed ownership of them.

They have auctions all the time.  They know how to auction off seized property.  They have web sites for exactly that purpose.  That is what they know how to do so that is what they will do.  We just need to monitor the various goobermint web sites used to auction off seized property and bid on the BTC when they come up for auction.





Unless they some how manage to lose the private keys, which is totally possible for them to do, then they are SOL.

Yes. Jurisdiction is a complex issue in cases like this, but the US government has jurisdiction over things occurring within their borders.

one company (I think Australian?) offered to buy them at a 15% discount already, which is sick because its easy to sell them at 10% premiums.  if I had the capital I'd put in a bid.

And any company/person buying them will not be punting them to kill the market, that would make no sense.

Talking about this?


It  was just a rumor.... nothing serious.

Nothing will happen, if they decide to do they wont sell it for cheap, and they won't sell it on one day. Or they will use it to trade on some other "shady' sites and trap users......

Hmm... they can sell it in just one day, using a private auction. There is a lot of demand for cheap Bitcoins. But still I would be expecting a steep discount, ranging from 10% to 20%.

I don't remember how much did MtGOx took for transaction but the question is why would you risk all if you are going to sell it for 10-20% of the current price?  Then can sit on them for months and sell 1-2% each day. 2000Btc isn't that much.

Why do you expect them to sell at a discount?  In a well advertised auction they could go for a premium even.  It just depends on how many people are bidding and how emotional they get - just like any other public auction.

I don't see this happening unless they could make a good profit or it was an attempt to damage BTC's credibility.

I imagine the auction winners will be known publicly.  This might be the largest amount of coins with a known owner, besides Satoshi.

The purchase will almost certainly be made by an investor/company who has plans for the coins. Which means ultimately they will be brought into circulation again. A very good thing.

I doubt anybody is going to buy that many coins to sit on them for years.

lol... the biggest holder of Bitcoins right now is the Mt Gox thief.

Check this:

https://i.imgur.com/N7TAUpJ.png

what the...  :o >:(

They are all dependend on the btc price

But bad thing now very big quantity is not in circulation just because of this bitcoin going down badly

Fake screen

looks like scam

Other coins?  what coins could take over BTC place? I personally don't know any.

Other coins cannot take place of bitcoin because they are just because of bitcoin kids cannot take place of parents  :D