Bitcoin Forum

Can a BTC thief be prosecuted?

Stuff happens.  It would be nice for the BTC client to have built-in security but reading allinvain thread in the BTC forum, you have to admit that he was almost begging someone to hack him. He even had prior warnings he was compromised and he ignored them.  His wallet may have held a potential value of $500m but he certainly wasn't treating it like that.

This does raise interesting questions about what recourse he has.  Will law enforcement even investigate?  Would they even understand the crime?  Can allinvain even prove a crime occurred? 

If they do investigate, they can certainly trace the booty as it is dispersed to other accounts, but can they prosecute if they 'catch' someone with it?  More to the point, can they prosecute holders of the accounts to whom the original sum was distributed?  Suppose the thief disperses to a thousand different accounts and starts selling them on MtGox in 100BTC increments?  Anyone can claim the money just appeared in their account.  Who's to argue?

You would have to check (via what ever Government you're under) and see what the laws say.
Technically everyone using BTC in North America is breaking the law (as BTC is an un-taxable good/service).

Then there is the fact of tracing the blockchain to track and see where he/she goes.

Talk to your lawyer, laws vary from place to place. However, considering that people have been prosecuted for "stealing" other electronic goods, it would be fair to say that it is probably possible. IANAL.

"Technically everyone using BTC in North America is breaking the law (as BTC is an un-taxable good/service)."
It really depends on what they are using it for. They might well be declaring it as income, or whatever. It might be considered a hobby. Where I am from, income earnt from hobbies isn't taxable (above a certain amount it is considered not a hobby, no matter what you say). (Also North America is a big place, with at least two countries (depends on where you draw the line), you shouldn't really conflate them like that.)

You would have to quote me the law you suggest is being broken.  I don't think there is any such law (yet).


If 10BTC showed up in my account that originated from allinvain account and passed through <random number> other accounts, could I be prosecuted?

http://www.irs.gov/businesses/small/article/0,,id=117613,00.html
That's what I found after a few minutes of looking.
I see what you're saying. Doesn't seem to be a law against it.

I feel better :D

Does anyone want to take a stab at this question?

If 10BTC showed up in my account that originated from allinvain account and passed through <random number> other accounts, could I be prosecuted?

The first thing, that it would be extremely difficult to determine if it actually came from allinvain, as each transaction would have been made with a new send and receive address.

Secondly, there would need to be some sort of culpability on your part. If you suddenly had 10 BTC show up in your account, were you paid off, were you involved in some way in the (supposed) crime?

A real world equivalent would be a crime was committed and then money was deposited into your checking account from that crime. You would be culpable if you were involved, aided, and or supported the crime that took place.

each block can be traced back to the originator (in this case, allinvain), or am i misunderstanding.

I think you're right. I 'll have to double check or ask someone smarter then me about that. But I don't believe that changes culpability.

culpability for what?  if you publish your wallet send-to address and i send you coins, you get the coins whether you want them or not,

I would say that catching a BTC thief is your first issue. Pretty much everything about this is anonymous, your only chance to catch an IP is if they get on your machine and if they have a proxy you're screwed.

Well its hard to prove you owned those bitcoins and from what I can see, the transactions cant be undone.