You can read all about it at my wife's and my web sites here:

http://www.jmwagner.com/
http://www.burtw.com/

I was arrested for trading Bitcoins on localbitcoins.com without a license.  Official charge:  operating a money transmittal business without a license.

In the end they dropped all the criminal charges against me, dropped all the civil charges against the seized assets (including my Bitcoins), kept $80,000 in cash and Bitcoins for the federal asset forfeiture fund - to be used by the justice department and homeland security to fund future operations, and gave me back the rest.

I have given many talks to various organizations since this happened to me.  I have two upcoming talks in the Denver area.  You are invited to join us if you are interested:

http://www.burtw.com/speaking-schedule.html

Be sure to check out the link on that page to John Oliver's expose on civil asset forfeiture.  It explains a lot about why I and so many others are targeted: money to fund their operations.

For comparison:

Mark 1 – "Little Boy" gun-type uranium weapon (used against Hiroshima). (13–18 kilotons, 1945–1950)
Mark 3 – "Fat Man" plutonium implosion weapon (used against Nagasaki), effectively the same at the "Gadget" device used in the Trinity (nuclear test) with minor design differences. (21 kilotons, 1945–1950)

So more than Hiroshima and Nagasaki combined.

But it can be "dialed back" to only 5 or 10 kilotons.

There is a lot about the actual bomb here:

https://en.wikipedia.org/wiki/B61_nuclear_bomb

This is also very interesting and terrifying:

https://en.wikipedia.org/wiki/List_of_nuclear_weapons

This happened to me, sort of.  

But the thugs were not who you guys are all thinking about - in my case the thugs were the justice department and homeland security.

I was arrested, 30+ agents from 6 different agencies searched my house and my corporate offices, all of my computers were seized, all of my electronics were seized, my cell phone was seized.  They tore my entire house apart and did find where I had stored my seed words for my HD wallet.  Given that they were able to seize my Bitcoins.

OK, sure, you can say I made it too easy for them by having my HD wallet seed written down and hidden away where they were able to find it.  I am wiser now.  But are you expecting 30+ agents to search your entire house, crawl space, attic, etc. for an entire day?

Was that all of my Bitcoins? They thought not.

So, after one night in Denver county jail, at my kangaroo court bond hearing, the judge granted the federal government the maximum amount of time allowed by law that they could hold me before my bond hearing (6 more days in Federal prison) so they could try and locate all of my Bitcoins and other assets.

I was held in solitary confinement in a federal jail until my lawyer - $50,000 cash retainer to take the case, which my wife got by cashing in our retirement savings - was able to ague that I should get a bond hearing.  I did get out of solitary confinement after only three days.

THEN THE FUN STARTED

They were able to easily crack into all of my Windows machines but they were not able to crack into my Linux server.  So, they asked me for the password.

My attorney explained to me that if I did not give them the password then I could be held in contempt of court.  If you are sent to jail for contempt of court:

There is no time limit - they can keep you as long as it takes
There is no appeal
There is no getting out until you give them what they want

I my case since I had a great lawyer (total cost of the criminal and civil cases approx $250,000) so he was able to argue successfully and I never had to give them the password.

Now apply this to the password to your Bitcoin account, or your private keys.  If they know you have Bitcoins and they ask you for the private keys they can put you in jail until you give it to them, no appeal, no time limit.

These are the thugs you should be worried about.

Proof?

As long as the value remains, the price continues to increase, people continue to use it as a store of value, no fatal flaws are found, I see no reason to change it.  Just leave it as is.

Other coins can become the everyday "currency" coins you use to buy coffee. 

Bitcoin works just fine as it is for storing and transferring relatively large sums of money/value.

For a web wallet they are not that bad.  Private keys are encrypted/decrypted locally, you can set it up to email you and/or text you to verify login, they are now an HD wallet so backup is a breeze (just remember the seed words and you can recover all of your BTC and your entire transaction history), etc....

If the transaction does not confirm I bet the BTC will magically appear back in your wallet after a time.

Here is every transfer to the address 1BU8tuGo1BSBmGS5whNSr1927VaatMAxAu that has confirmed to date:

https://blockchain.info/address/1BU8tuGo1BSBmGS5whNSr1927VaatMAxAu?filter=2

As you can see there are no transfers to that address for 0.21062 BTC and all the transfers to that address are for amounts much less than the amount you were trying to send.

Are you sure you sent it to that address?  Where did you send the BTC from?  What wallet/site do you use to keep the Bitcoins you own?

So you lost nothing from either situation.

You have a very loud opinion.

You are so much smarter than me it must hurt you to see someone as stupid as me flush my money down the toilet.

Thanks for all of your free advice.  

I am off do to some more trading at the second largest trading platform by volume.

You do what you will.

Try not to take yourself and your opinion so darn seriously.  You won't sound so bitter.

You could also post the "from" and/or "to" addresses in order to help us help you.

Just got this in the email:


As of this writing it is obviously not working for them:

https://blockchain.info/address/1BiTc1KsiX5x8tyWVy46iGuZsH8rpueM9U

I actually own the first bits "1BurtW", pretty cool, still works, you can look it up, etc.  However now everyone knows all of my transactions on that address.  I no longer support address reuse, first bits, or this proposal (unless it solves the address reuse issue).  Ideally all addresses should be used exactly twice:  once to receive BTC and once to be spent.

I also met the guy that invented first bits (FreeMoney).  He moved away from Boulder, does not come here to bitcointalk anymore so I lost touch with him.

You sound so bitter.  How much did you lose in the Bitfinex hack?  How much did you lose in the MTGOX debacle?  For me it was:

MTGOX:  Lost everything
Bitfinex:  Lost just the appreciation of the BTC.  Got back the USD value of all BTC at the time of the hack.

Call me stupid all you want.  I prefer the Bitfinex outcome to the MTGOX outcome.

If you solve all your other issues you are still stuck with this - which is your biggest problem.  This affects Bitcoin at a fundamental level, privacy and fungibility.

If, instead of registering a Bitcoin address, you registered a place to get a Bitcoin address (a URL?) then the entity could hand out new addresses every time the "place to get addresses" was accessed.

Of course this is even further removed from the idea of Bitcoin and has even more security issues/concerns.

I am happy that I got all my USD back because the usual case when this sort of thing happens is that I get nothing back.  Getting all my USD back is way better than getting nothing back.

I will continue to use this exchange because of how they responded to this.  There were other options available to them that would have left us all totally holding the bag.

Yes, they could have filed for bankruptcy and then we would have gotten nothing.  The way they handled it was much better.  We got the USD value of all of our BTC at the time of the hack.  Way better than nothing.
Yes, I got tokens.  Then I had the option of selling them off at a lower price, possibly back to Bitfinex.   Some people lost faith and sold at a loss.  That was their choice.  I did not. Notice the words option and choice.  Something we would not have had if they had filed for bankruptcy.  So, again this was a much better option, gave everyone options and choice and for those that did not panic we got our USD back.
Many people exchanged the debt tokens for equity.  They attracted a lot of new business because of the way they handled the hack - proving it was the correct business decision.  Possibly they bought some of the debt at a discount from those that panicked - no way to prove it one way or the other.  Those that chose to take the equity offering now get dividends.  Again choice and options.  Something your "solution" of bankruptcy would not have done.
Or doing what you consider "right", filing for bankruptcy, I would have been compensated 0 BTC for every 2 BTC lost in the hack
I will continue to use the exchange because of the services they offer, the price of the services, the way they responded to the hack and the fact they have been hacked.  Because the pain of the hack will cause them to improve security.  Because of the hack I consider them to be safer and more secure.  Because of the hack and they way they handled it I consider them the best exchange to do business with and trust with my crypto and fiat currencies.

A for effort.  Lots of issues.  Keep trying.

Got all my money back (in USD).

Hearts?  That would be pretty cool but what would be even better would be able to play rubber bridge and play it for Bitcoins!

Did a quick Google search and did not find it.  That is a fantastic idea for all of us who love to play bridge for money.

You have to handle the collusion problem but that has already been solved by the other bridge for money sites on the Internet.  One site does this by randomizing partners on every hand.  Another site pits one human player with a bridge robot partner against a second human player with a bridge robot partner.

BUT, I just found this out and it is pretty cool:

1) Open wallet.trezor.io
2) Attach the destination Trezor (the one you want to send Bitcoins to)
3) Detach the destination Trezor - but REMEMBER it
4) Attach the source Trezor (the one you want to send the Bitcoins from)

Now you can send Bitcoins from the source Trezor to the destination Trezor by getting the next address from the receive dialog of the destination Trezor and copy/paste the address into the send dialog of the source Trezor.  The cool thing was that the wallet.trezor.io "knows" you are doing this and shows you that the destination address is from a Trezor and which Trezor you are about to send the Bitcoins to - a very useful "double check" before you send the Bitcoins.

You can actually connect several Trezors and remember them all when you disconnect them.  You can then get receive addresses from all of them all day long and send as many transactions to them as you want - without any of them being connected.

You only need to plug in one of them when you want to send Bitcoins from that Trezor.

Of course when you are done you can forget all of them so that others will not be able to see all of your addresses and transactions.

You should not call it a wallet when it is not a wallet.  It is an account.  There is a huge difference.  If your Bitcoins are in a wallet then you own and control them.  If your Bitcoins are in an account then you have lent your Bitcoins to them.  They own and control the Bitcoins - you do not.