2012-09-12 forbes.com - Key Disclosure Laws Can Be Used To Confiscate Bitcoin As

[julz]

Key Disclosure Laws Can Be Used To Confiscate Bitcoin Assets

Jon Matonis
2012-09-12

http://www.forbes.com/sites/jonmatonis/2012/09/12/key-disclosure-laws-can-be-used-to-confiscate-bitcoin-assets/

...
Key disclosure laws may become the most important government tool in asset seizures and the war on money laundering.
...
To say the cryptocurrency bitcoin is disruptive would be an understatement. Bitcoin not only disrupts payments and monetary sovereignty, it also disrupts the legal enforcement of anti-money laundering laws, asset seizure, and capital controls. It is very likely that a key disclosure case will make it to the U.S. Supreme Court where it is far from certain that the Fifth Amendment privilege, as it relates to a refusal to decrypt bitcoin assets, will be universally upheld.
...

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[nimda]

Lolok. Have fun proving ownership.

[FreeMoney]

"We demand you give us the private keys to these addresses within 24 hours!"

Transfer bitcoins.

"Here ya go"

[grondilu]

"We demand you give us the private keys to these addresses within 24 hours!"

Transfer bitcoins.

"Here ya go"

 

[Seal]

John raises excellent points in this article.

"We demand you give us the private keys to these addresses within 24 hours!"

Transfer bitcoins.

"Here ya go"

FreeMoney raises an excellent countermeasure against

Easily done with a 'panic button' script that can broadcast all your coin to a laundry service into your own personal and more private brain wallet or friends/family/spouse's wallet.

[cbeast]

I wonder if one couldn't also have a worthless alternate blockchain with the same public key as a decoy and claim that you don't own the Bitcoin address.

[grondilu]

OOO please make one   or show me how to in Bash or Python.

Code:

#!/bin/bash

# send all your money to a previously generated bitcoin address
# whose private key is stored and hidden somewhere on the net 
# or printed on paper somewhere.
bitcoind sendtoaddress WRITEYOURPANICADDRESSHERE  "$(bitcoind getbalance)"

# clean up your tracks:
# remove this script from your disk
# so that you'll have plausible deniability.
# You'll say that you just happen to have sent all your bitcoins to someone.
wipe $0 || rm -f $0

[TTBit]

Possible / practical?

Keep coins in 20 addresses. Have remote online computer monitor those addresses. if 1 of 20 addresses has a withdraw, move all coins in the other 19 to panic address.

[grondilu]

Possible / practical?

Keep coins in 20 addresses. Have remote online computer monitor those addresses. if 1 of 20 addresses has a withdraw, move all coins in the other 19 to panic address.

If one of your 20 addresses has been hacked for some reason, the others probably are too.  IMHO.  Better use a key that has never been used and only you know it even exists.  It might be encrypted and hidden in a picture somewhere using steganography, for instance.

[FreeMoney]

Possible / practical?

Keep coins in 20 addresses. Have remote online computer monitor those addresses. if 1 of 20 addresses has a withdraw, move all coins in the other 19 to panic address.

If they put all the addresses in one wallet and make one tx you'll be too slow. Best hacking practices are to do it all at once, so odds are pretty bad imo.

[marcus_of_augustus]

Storing all your bitcoins in multi-sig addresses would give plausible deniability that one had all the passwords needed.

[rebuilder]

John raises excellent points in this article.

"We demand you give us the private keys to these addresses within 24 hours!"

Transfer bitcoins.

"Here ya go"

FreeMoney raises an excellent countermeasure against

Easily done with a 'panic button' script that can broadcast all your coin to a laundry service into your own personal and more private brain wallet or friends/family/spouse's wallet.

For how long can you be jailed for contempt of court?

[marcus_of_augustus]

John raises excellent points in this article.

"We demand you give us the private keys to these addresses within 24 hours!"

Transfer bitcoins.

"Here ya go"

FreeMoney raises an excellent countermeasure against

Easily done with a 'panic button' script that can broadcast all your coin to a laundry service into your own personal and more private brain wallet or friends/family/spouse's wallet.

For how long can you be jailed for contempt of court?

In a quite recent similar case, Martin Armstrong was held for 7.5 years in prison without a trial, in contempt of court. He insisted he didn't know where the missing gold was and court insisted he did ... essentially.

The bigger issue this raises for me is how ready people are to blow-off clearly corrupt court rulings and look for other ways around the "problem".

The longer the courts go on rubber-stamping facistic, totalitarian unconstitutional govt. decrees the more respect they lose. This is a dangerous situation for the society to head into.

[Seal]

John raises excellent points in this article.

"We demand you give us the private keys to these addresses within 24 hours!"

Transfer bitcoins.

"Here ya go"

FreeMoney raises an excellent countermeasure against

Easily done with a 'panic button' script that can broadcast all your coin to a laundry service into your own personal and more private brain wallet or friends/family/spouse's wallet.

For how long can you be jailed for contempt of court?

In a quite recent similar case, Martin Armstrong was held for 7.5 years in prison without a trial, in contempt of court. He insisted he didn't know where the missing gold was and court insisted he did ... essentially.

The bigger issue this raises for me is how ready people are to blow-off clearly corrupt court rulings and look for other ways around the "problem".

The longer the courts go on rubber-stamping facistic, totalitarian unconstitutional govt. decrees the more respect they lose. This is a dangerous situation for the society to head into.

What happened to the days of innocent until proven guilty?

[Rygon]

Maybe it's just me, but I'm not really clear about how a situation could arise where the court would demand for the private key to a bitcoin wallet. If the crime was receiving money for some illegal activity, all they would have to do is prove that someone had the private key to the public address. They would have to know something linking you to the public key in the first place to charge you with a crime.  Your financial transaction history would be on the block chain, hence, public. I'm not a lawyer, so perhaps I just don't get it.

I could see a potential situation where someone is ordered by the court to pay back taxes or alimony, and it comes up that the defendent has the private key to a 100K BTC wallet. A divorce case might perhaps, but it would be easy for the defendent to move the BTC around and claim that they lost it all on Satoshi dice or something.

[FreeMoney]

Maybe it's just me, but I'm not really clear about how a situation could arise where the court would demand for the private key to a bitcoin wallet. If the crime was receiving money for some illegal activity, all they would have to do is prove that someone had the private key to the public address. They would have to know something linking you to the public key in the first place to charge you with a crime.  Your financial transaction history would be on the block chain, hence, public. I'm not a lawyer, so perhaps I just don't get it.

They are going to want the money eventually.

[Rygon]

Maybe it's just me, but I'm not really clear about how a situation could arise where the court would demand for the private key to a bitcoin wallet. If the crime was receiving money for some illegal activity, all they would have to do is prove that someone had the private key to the public address. They would have to know something linking you to the public key in the first place to charge you with a crime.  Your financial transaction history would be on the block chain, hence, public. I'm not a lawyer, so perhaps I just don't get it.

They are going to want the money eventually.

Well, of course. But that's assuming they have already proven that person guilty. This article is about retrieving private keys to somehow obtain evidence to prove guilt, and jailing someone for contempt of court for refusing to give up those keys. I guess my question is, "What evidence does the prosecuter actually obtain by getting the private key to a bitcoin address?"

[FreeMoney]

Maybe it's just me, but I'm not really clear about how a situation could arise where the court would demand for the private key to a bitcoin wallet. If the crime was receiving money for some illegal activity, all they would have to do is prove that someone had the private key to the public address. They would have to know something linking you to the public key in the first place to charge you with a crime.  Your financial transaction history would be on the block chain, hence, public. I'm not a lawyer, so perhaps I just don't get it.

They are going to want the money eventually.

Well, of course. But that's assuming they have already proven that person guilty. This article is about retrieving private keys to somehow obtain evidence to prove guilt, and jailing someone for contempt of court for refusing to give up those keys. I guess my question is, "What evidence does the prosecuter actually obtain by getting the private key to a bitcoin address?"

They often take cash before trial or even without arrest or trial ever happening. Most 'normal' people don't have a lot of cash, so if they see a lot of cash it's evidence that you are up to no good. Most people don't have a lot of bitocins either (and never will no matter what since 'a lot' is relative). But it's easier to keep bitcoins safe and hidden from anyone.

[bitcats]

If you run the risk of being caught by LE, you should have a separate "alibi" wallet with a few transactions in the history and a 69 BTC balance -> plausible deniability.

[gnar1ta$]

Maybe it's just me, but I'm not really clear about how a situation could arise where the court would demand for the private key to a bitcoin wallet. If the crime was receiving money for some illegal activity, all they would have to do is prove that someone had the private key to the public address. They would have to know something linking you to the public key in the first place to charge you with a crime.  Your financial transaction history would be on the block chain, hence, public. I'm not a lawyer, so perhaps I just don't get it.

They are going to want the money eventually.

Well, of course. But that's assuming they have already proven that person guilty. This article is about retrieving private keys to somehow obtain evidence to prove guilt, and jailing someone for contempt of court for refusing to give up those keys. I guess my question is, "What evidence does the prosecuter actually obtain by getting the private key to a bitcoin address?"

"Civil forfeiture laws represent one of the most serious assaults on private property rights in the nation today. Under civil forfeiture, police and prosecutors can seize your car or other property, sell it and use the proceeds to fund agency budgets--all without so much as charging you with a crime. Unlike criminal forfeiture, where property is taken after its owner has been found guilty in a court of law, with civil forfeiture, owners need not be charged with a crime let alone be convicted to lose homes, cars, cash or other property."

http://www.forbes.com/2011/06/08/property-civil-forfeiture.html