2012-11-12 American Banker: The Plot Thickens in the Bizarre Bitcoin Blackmail C

[JDBound]

The Plot Thickens in the Bizarre Bitcoin Blackmail Caper

There have been some new twists in the strange case of an alleged attempt to blackmail Mitt Romney for $1 million in bitcoins, raising additional legal questions about the digital currency.

http://www.americanbanker.com/bankthink/plot-thickens-in-bizarre-bitcoin-blackmail-caper-1054312-1.html

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[hazek]

Man I hate this story and of course it's all over the yellow pages, they just can't resist a story of a stupid guy doing something stupid and pinning it on Bitcoin just because it happened to be his preferred choice of payment. I wonder if they'd talk about any "questions raised about cash" if he happened to have demanded to be paid in unmarked bills instead.. Actually I don't because I'm pretty sure they wouldn't.

[sunnankar]

I think it highlights the susceptibility to vindictively planted circumstantial evidence by unscrupulous individuals.

[Stephen Gornick]

I think it highlights the susceptibility to vindictively planted circumstantial evidence by unscrupulous individuals.

Like ... did the Secret Service just remove 3.5% of the supply of all bitcoins held in existence?

Sure, it being known that those coins get locked up for a few years would definitely increase the value of the remaining bitcoins.

And then ,... can the Secret Service actually protect those coins?

Or, is KnightMB really a good chess player and he's really just playing the USG?   OK, so assuming the Secret Service has seized the fat wallet, then now consider the scenario where KnightMB spends the funds (using another copy of the wallet but sent to an address under his control).

So now the USG is on the hook for losing a citizen's private property (to the tune of several million dollars).   So KnightMB ends up with his original 3.5% of the supply of all bitcoins held in existance plus a few million dollars of fiat from the lawsuit for the missing property (I mean, how could he lose such a suit ... they left him penniless after the raid and now they lost his stash of bitcoins too?)

Wouldn't that be quite a story if that's what happens?

[Hopefully, if the USG has a wallet of his with any funds in it that they are transferring those funds to an address under their control so as to keep the funds secure.]

[justusranvier]

So now the USG is on the hook for losing a citizen's private property

I lol'd.

[brunozisterer]

I think it highlights the susceptibility to vindictively planted circumstantial evidence by unscrupulous individuals.

Like ... did the Secret Service just remove 3.5% of the supply of all bitcoins held in existence?

Sure, it being known that those coins get locked up for a few years would definitely increase the value of the remaining bitcoins.

And then ,... can the Secret Service actually protect those coins?

Or, is KnightMB really a good chess player and he's really just playing the USG?   OK, so assuming the Secret Service has seized the fat wallet, then now consider the scenario where KnightMB spends the funds (using another copy of the wallet but sent to an address under his control).

So now the USG is on the hook for losing a citizen's private property (to the tune of several million dollars).   So KnightMB ends up with his original 3.5% of the supply of all bitcoins held in existance plus a few million dollars of fiat from the lawsuit for the missing property (I mean, how could he lose such a suit ... they left him penniless after the raid and now they lost his stash of bitcoins too?)

Wouldn't that be quite a story if that's what happens?

[Hopefully, if the USG has a wallet of his with any funds in it that they are transferring those funds to an address under their control so as to keep the funds secure.]

This story would make a good movie.

[paraipan]

I think it highlights the susceptibility to vindictively planted circumstantial evidence by unscrupulous individuals.

Like ... did the Secret Service just remove 3.5% of the supply of all bitcoins held in existence?

Sure, it being known that those coins get locked up for a few years would definitely increase the value of the remaining bitcoins.

And then ,... can the Secret Service actually protect those coins?

Or, is KnightMB really a good chess player and he's really just playing the USG?   OK, so assuming the Secret Service has seized the fat wallet, then now consider the scenario where KnightMB spends the funds (using another copy of the wallet but sent to an address under his control).

So now the USG is on the hook for losing a citizen's private property (to the tune of several million dollars).   So KnightMB ends up with his original 3.5% of the supply of all bitcoins held in existance plus a few million dollars of fiat from the lawsuit for the missing property (I mean, how could he lose such a suit ... they left him penniless after the raid and now they lost his stash of bitcoins too?)

Wouldn't that be quite a story if that's what happens?

[Hopefully, if the USG has a wallet of his with any funds in it that they are transferring those funds to an address under their control so as to keep the funds secure.]

This story would make a good movie.

+1 but what if someones brain cells are worth a few millions... ?

[Kluge]

I think it highlights the susceptibility to vindictively planted circumstantial evidence by unscrupulous individuals.

I've been talking with him in writing an article. It's hard to believe that isn't the case, though I'd doubt the Feds planted it. The $5k->371kBTC deal in early 2010 makes him unlikeable merely by the accusation of wrongdoing. In reality, he bought the coins when they were worth about what he offered. They were worth ~$.05 each, with massive uncertainty and almost no market to buy them. The 2009 case The Daily makes a brief note of also adds to the unlikeability, but is again something with a very plausible explanation behind it. He doesn't defend himself on the forum, so the Internet hens go wild clucking about with ultra-cynical conspiracy theories (not that they wouldn't were Brown to defend himself). The SS did not confiscate any BTC, though, afaik - fwiw.

(don't forget to subscribe to BTCMag )

[sunnankar]

I think it highlights the susceptibility to vindictively planted circumstantial evidence by unscrupulous individuals.

I've been talking with him in writing an article. It's hard to believe that isn't the case, though I'd doubt the Feds planted it.

The 'evidence' could use the Fed's as pawns.

[kiba]

Or maybe knightmb is just a shithead extortionist.

[Spekulatius]

I think it highlights the susceptibility to vindictively planted circumstantial evidence by unscrupulous individuals.

Like ... did the Secret Service just remove 3.5% of the supply of all bitcoins held in existence?

Sure, it being known that those coins get locked up for a few years would definitely increase the value of the remaining bitcoins.

And then ,... can the Secret Service actually protect those coins?

Or, is KnightMB really a good chess player and he's really just playing the USG?   OK, so assuming the Secret Service has seized the fat wallet, then now consider the scenario where KnightMB spends the funds (using another copy of the wallet but sent to an address under his control).

So now the USG is on the hook for losing a citizen's private property (to the tune of several million dollars).   So KnightMB ends up with his original 3.5% of the supply of all bitcoins held in existance plus a few million dollars of fiat from the lawsuit for the missing property (I mean, how could he lose such a suit ... they left him penniless after the raid and now they lost his stash of bitcoins too?)

Wouldn't that be quite a story if that's what happens?

[Hopefully, if the USG has a wallet of his with any funds in it that they are transferring those funds to an address under their control so as to keep the funds secure.]

In that case it could be argued with ease that it was MBknights responsibility to at least make a back up of his fortune and store it somewhere save, like a bank vault, his email account or else (encrypted of course) and also that there is no evidence that those 371k BTC would have been stolen actually since as you said, MBknight could have just withdrawn them on his own to scam the SS service out of millions. I doubt that is anyone's plan.

[odolvlobo]

At a minimum, it is very difficult to confiscate bitcoins, since it requires access to a private key, and thwarting confiscation is as easy as moving the bitcoins to a new address.

[Kluge]

At a minimum, it is very difficult to confiscate bitcoins, since it requires access to a private key, and thwarting confiscation is as easy as moving the bitcoins to a new address.

It's difficult to move Bitcoins when the Secret Service is at your bedside before you wake up and have you handcuffed a whole day while they semi-recklessly search your home, bagging anything electronic.

[deeplink]

+1 but what if someones brain cells are worth a few millions... ?

Then we call it unfair that not everyone was born with that advantage and we discourage him from being productive by taxing the shit out of him. At least that's how they do it in Europe.

[paraipan]

+1 but what if someones brain cells are worth a few millions... ?

Then we call it unfair that not everyone was born with that advantage and we discourage him from being productive by taxing the shit out of him. At least that's how they do it in Europe.

True, true, but I was referring to the possibility that he already stored all his bitcoins in a brain wallet... 

[Ente]

What I still didn't get:
How did they find MBknight?
Something with a USB stick, cat pictures and all. So they recovered deleted (but not overwritten) pics of cats on the USB stick used for the extortion. So? Where is the link from random cat pics to him? Nevermind it weren't his cats, but from a neighbor.
Were those cat pics online, and they found the same pic again?

/CSI mode on:
Did they extract the DNA from the pics, run it through the dog-poop-DNA database, found out which dog had a fight with the cat, then followed the dog via satellite right to MBknights home?
/CSI mode off

Ente

[Kluge]

What I still didn't get:
How did they find MBknight?
Something with a USB stick, cat pictures and all. So they recovered deleted (but not overwritten) pics of cats on the USB stick used for the extortion. So? Where is the link from random cat pics to him? Nevermind it weren't his cats, but from a neighbor.
Were those cat pics online, and they found the same pic again?

/CSI mode on:
Did they extract the DNA from the pics, run it through the dog-poop-DNA database, found out which dog had a fight with the cat, then followed the dog via satellite right to MBknights home?
/CSI mode off

Ente

They were looking for links to Bitcoins, and had already raided Brown in 2009 (it was Secret Service both times). They are probably fairly familiar with Brown's activities.

[Ente]

What I still didn't get:
How did they find MBknight?
Something with a USB stick, cat pictures and all. So they recovered deleted (but not overwritten) pics of cats on the USB stick used for the extortion. So? Where is the link from random cat pics to him? Nevermind it weren't his cats, but from a neighbor.
Were those cat pics online, and they found the same pic again?

/CSI mode on:
Did they extract the DNA from the pics, run it through the dog-poop-DNA database, found out which dog had a fight with the cat, then followed the dog via satellite right to MBknights home?
/CSI mode off

Ente

They were looking for links to Bitcoins, and had already raided Brown in 2009 (it was Secret Service both times). They are probably fairly familiar with Brown's activities.

if it went like that - leave the innocent cats out of that!
Doesn't anybody think of the cats?!?

Ente

[julz]

What I still didn't get:
How did they find MBknight?
Something with a USB stick, cat pictures and all. So they recovered deleted (but not overwritten) pics of cats on the USB stick used for the extortion. So? Where is the link from random cat pics to him? Nevermind it weren't his cats, but from a neighbor.
Were those cat pics online, and they found the same pic again?

/CSI mode on:
Did they extract the DNA from the pics, run it through the dog-poop-DNA database, found out which dog had a fight with the cat, then followed the dog via satellite right to MBknights home?
/CSI mode off

Ente

There may have been something in the photo metadata (e.g camera/phone serial number) which gave them clues.
Apparently the iPhone even embeds GPS location data in photos unless you disable it.