How bitcoins get confiscated?

[Wary]

Usually, when somebody bitcoin-related get arrested, his bitcoins are confiscated. Why it is (usually) possible?

P.S. It's purely theoretical question, I'm law-abiding citisen. Just curious. 

[Mellnik]

None of them? They probably have their btc stored in unsafe environments.

Simple way to secure your BTC:
1. Put bitcoins in a wallet.
2. Encrypt.
3. Upload wallet to several places on the internet where you can access them all over the world

[pereira4]

Bitcoins are confiscated due to a failure to comprehend the importance of secure bitcoin storage.

A plain text paper cold storage wallet is not enough I'm afraid.

I recommend M of N wallet pieces stored in multiple physical locations.

This, why is it so difficult? even if you encrypt the wallet itself within bitcoin qt it should be enough to block it, unless the feds can force you to say the pass which i have no idea how all of that works.

[Lorenzo]

I'm not sure about other clients but the official Bitcoin client uses AE-256 as the encryption algorithm. This is the same technology used by Truecrypt and nobody has managed to crack it. What matters however is the length of your password since a short password can be easily brute forced no matter how strong the encryption scheme is. My current wallet is protected by a 10 character password consisting of letters and numbers but a government could easily brute force it in a few hours or days if they really wanted to. In contrast, a 30+ character password consisting of random letters, numbers, and symbols would probably be unbreakable with even the strongest supercomputers and for many decades into the future too (if at all).

As Mellnik already said, a wallet.dat file encrypted with such a password could be uploaded to the cloud with the assurance that your bitcoins are still protected. Having multiple copies backed up in multiple locations would be the safest solution since it makes the chances of a loss far less likely (i.e. you could encrypt your wallet with a 50 character password but it won't do you any good if there's only one copy and the feds won't give you your computer back).

When the feds confiscated Ross Ulbricht's coins, what they actually got were the coins held by users of the site. His personal coins were protected with far better security and despite their best attempts, they are still inaccessible to this day:

When Ross Ulbricht, known as Dread Pirate Roberts to users of the site, was arrested last week, the FBI seized 26,000 Bitcoins belonging to Silk Road customers. But it also attempted, unsuccessfully, to claim the nearly 600,000 - thought to be worth around $80m - which Ulbricht himself is thought to be holding...

..."The FBI has not been able to get to Ulbricht’s personal Bitcoin yet," wrote Hill. An FBI spokesperson said to Hill that the "$80m worth" that Ulbricht had "was held separately and is encrypted". At current exchange rates, that represents slightly more than 5% of all bitcoins in circulation.

Link: http://www.theguardian.com/technology/2013/oct/07/fbi-bitcoin-silk-road-ross-ulbricht

[criptix]

if it comes to the worst the US will just do it Guantanamo-Style

[jjacob]

When the feds confiscated Ross Ulbricht's coins, what they actually got were the coins held by users of the site. His personal coins were protected with far better security and despite their best attempts, they are still inaccessible to this day:

When Ross Ulbricht, known as Dread Pirate Roberts to users of the site, was arrested last week, the FBI seized 26,000 Bitcoins belonging to Silk Road customers. But it also attempted, unsuccessfully, to claim the nearly 600,000 - thought to be worth around $80m - which Ulbricht himself is thought to be holding...

Link: http://www.theguardian.com/technology/2013/oct/07/fbi-bitcoin-silk-road-ross-ulbricht

The number of bitcoins seized from Ross' computer is definitely more than 26,000. It was 144,000 coins. The silkroad coins were sold immediately, while Ross' personal coins were sold at a later stage. The sale of silkroad coins was immediate, while the sale of Ross' coins hinged on the government being able to produce enough evidence to convict him.

http://www.forbes.com/sites/katevinton/2015/02/18/following-silk-road-trial-u-s-marshals-to-auction-off-nearly-12-million-of-ulbrichts-bitcoin/

The government and Ulbricht agreed to the sale of these Bitcoins on January 27, 2015, during Ulbricht’s trial in New York City. One week later, Ulbricht was found guilty of seven drug trafficking and money laundering charges after only 3.5 hours of jury deliberation.  Had Ulbricht been found not guilty, the money earned by the government in the auction would have been returned to him in cash. Instead, the money will go to the Department of Justice’s asset forfeiture fund, according USMS spokesperson Lynzey Donahue.

[yvv]

A red-hot soldering bar in the ass of bitcoin holder makes miracles. )))

[jjacob]

A red-hot soldering bar in the ass of bitcoin holder makes miracles. )))

We are assuming that most modern governments (at least the US) wouldn't use violence/threat of violence to extract information.
At least from what we have heard until now, the seizure of bitcoins has been due to mistakes committed by the holders. 

[coinableS]

This is how you confiscate bitcoins:

"You know you are facing 20-25 years, right?! If you co-operate and provide us with your bitcoins we will make sure you only see 5 years in prison. If you don't play ball, we will also charge you with obstruction of justice and that will get you another 10 years".

[xxxgoodgirls]

https://en.wikipedia.org/wiki/Rubber-hose_cryptanalysis
This is how they will get your BTCs.
Anyway encrypt your hard disk, store your BTCs in a hidden container partition, what else?

[chmod755]

I think most people who got caught just provided the keys to avoid ending up in the worst possible prison in their country.

Some background is known so prison guards could just look away when someone gets raped who didn't cooperate.

[OROBTC]

...

Right to all above re $5.00 wrench and similar.   

They will coerce it out of you.  By torture, threat of the worst jail in your country, or attacking your family.  A myriad of ways.

One way to avoid even that (assuming you have your BTC well hidden and well mixed) is to have more than, say, two BTC wallets scattered around.  Give "them" the two of lowest value.

In defense (for the moment) of blockchain.info, you CAN take it with you (assuming your destination has Bitcoin users).

*   *   *

It is regrettable that we must think like criminals when faced with such threats to take away our duly-saved wealth.  See the "Economic Devastation" (in "Economics") for a discussion of a possible happy future after a reset...

[Amph]

simply because those who were arrested did not take all the necessary measure to prevent so, it's a security problem for sure

in some case they probably asked him(in a brutal way) to reveal where his bitcoin are stored

[teukon]

We are assuming that most modern governments (at least the US) wouldn't use violence/threat of violence to extract information.

Where did you get that idea from?  The US is pretty big on torture all things considered.

[jmintuck]

This is how you confiscate bitcoins:

"You know you are facing 20-25 years, right?! If you co-operate and provide us with your bitcoins we will make sure you only see 5 years in prison. If you don't play ball, we will also charge you with obstruction of justice and that will get you another 10 years".

That is why people should opt for storing their coins in a more secure way. But I suppose its only people running an illegal operation or some big operation, who usually will have to do that.

I am sure Ross would have a lot of more coins stored away somewhere.

[Wary]

Well, it seems that the only secure way to keep your coin is to make them unavailable for yourself. Give the keys to somebody who is out of reach of police, or timelock them for several years time, or something like this. 

[yeponlyone]

The person might not have used a password on the wallet. Even if used, the person must not secure it with weak algorithm or guessable passwords like your cat's name or your mother's name. Usually, the person has to turn over the Bitcoins if not additional charges might get pressed.

[yvv]

We are assuming that most modern governments (at least the US) wouldn't use violence/threat of violence to extract information.

And this is wrong assumption. Torture is legally allowed to be used by law enforcement, at least in the US.
 

[Q7]

Is this a discussion about how bitcoin gets stolen or get confiscated? I suppose if it's the latter usually the prosecutor will strike a deal with the defendant in any way that if the guys given up his private key to his address, the charges will be lower. Or do it the hard way, make him talk.

[Hazir]

I love how some people are oblivious to to reality. Encryption and codes, passwords and secure words or other measures cryptographic tools are not gonna help you really when you will be arrested, dragged to secure location and tortured. And believe it will happen, people are usually think that tortures are something like in the movies, when man is beaten, burned, electrocuted etc. No, not really. Now we have more sophisticated methods of 'asking nicely". Psychological tortures, sleep deprivation, pharmacological agents... It is all our reality, and believe me government would do this to you just to know your passwords. They will also threaten you and your family, tell you that your imprisonment time will be hard like hell if you do not tell them and so on... If you have iron determination and will and you are unbreakable then you can put a passwords on your wallets, but if you think you will break - don't bother.