Users' Bitcoins Seized by DEA

[Tomatocage]

Dude probably was all like, "You want my Bitcoins? Here, have 'em!" and tossed them his encrypted wallet.dat

[petrjanda]

the feds can crack your encrypted wallets very easily. all you have to do is dump the private keys with pywallet, and save them in atext file. then you delete the wallet.dat file. rename the app data folder for bitcoin, then reinstall bitcoin. prior to launch bitcoin, move the blockchain from the old bitcoin to the new app data bitcoin folder. now start bitcoin and import the private keys. you now have an unencrypted bitcoin wallet with all the funds of the old encrypted one. 

Can someone confirm this? It seems like a big security hole.

[Cyberdyne]

the feds can crack your encrypted wallets very easily. all you have to do is dump the private keys with pywallet, and save them in atext file. then you delete the wallet.dat file. rename the app data folder for bitcoin, then reinstall bitcoin. prior to launch bitcoin, move the blockchain from the old bitcoin to the new app data bitcoin folder. now start bitcoin and import the private keys. you now have an unencrypted bitcoin wallet with all the funds of the old encrypted one. 

Can someone confirm this? It seems like a big security hole.

The emboldened part is completely false.

Pywallet cannot dump the keys of an encrypted wallet.

[QuestionAuthority]

the feds can crack your encrypted wallets very easily. all you have to do is dump the private keys with pywallet, and save them in atext file. then you delete the wallet.dat file. rename the app data folder for bitcoin, then reinstall bitcoin. prior to launch bitcoin, move the blockchain from the old bitcoin to the new app data bitcoin folder. now start bitcoin and import the private keys. you now have an unencrypted bitcoin wallet with all the funds of the old encrypted one. 

Can someone confirm this? It seems like a big security hole.

No, it won't work. Total bullshit.

With jackjack's pywallet you have to use ./pywallet.py --dumpwallet --datadir=DATADIR --wallet=WALLETFILE --passphrase=PASSPHRASE to dump the wallet.

[JimRogers]

http://en.wikipedia.org/wiki/Eric_Hughes_(cypherpunk)

[gwern]

That Eric Hughes doesn't seem to have the middle name 'D', most materials place him in California and not South Carolina, he's pretty old at this point, and there are a ton of people all named Eric Hughes (searching for 'Eric D Hughes South Carolina', I found a paid people database claiming multiple Eric D Hughes in South Carolina!). An interesting possibility, but unlikely.

[EndTheFed321]

LOL, so the DEA have a bitcoin wallet? will the DEA trade the bitcoin for fiat

[gwern]

Update: Hughes seems to be the SR vendor 'Casey Jones' http://www.reddit.com/r/SilkRoad/comments/1gxiv7/srrelated_bitcoin_seizure/caoxlmg

[Phinnaeus Gage]

Odd! The funds stem from this address: http://blockchain.info/sv/tx/47c0fd07a11027da0b18107703e442b9ce61457910a64a079b4b411b561f161e

[blockgenesis]

What wallet encryption can offer beside protecting from theft :
https://xkcd.com/538/

[AliceWonder]

Update: Hughes seems to be the SR vendor 'Casey Jones' http://www.reddit.com/r/SilkRoad/comments/1gxiv7/srrelated_bitcoin_seizure/caoxlmg

I told him that lady in red was trouble.

[marcus_of_augustus]

LOL, so the DEA have a bitcoin wallet? will the DEA trade the bitcoin for fiat

No, now they can go shopping on SR for the good stuff ....

[DeathAndTaxes]

the feds can crack your encrypted wallets very easily. all you have to do is dump the private keys with pywallet, and save them in atext file. then you delete the wallet.dat file. rename the app data folder for bitcoin, then reinstall bitcoin. prior to launch bitcoin, move the blockchain from the old bitcoin to the new app data bitcoin folder. now start bitcoin and import the private keys. you now have an unencrypted bitcoin wallet with all the funds of the old encrypted one.  

To export private keys you need the encryption passphrase.  If you have the encryption passphrase you don't need to do all that nonsense you can just use the wallet.

The QT wallet uses rather robust encryption of private keys (ask anyone who forgot even part of their passphrase).  The passphrase is hashed SHA-256 a few thousands times (exact number depends on computing power of the system running your wallet).  This generates the 256 bit key which is used by AES for the actual encryption and decryption of the wallet.  There are no backdoors and with a sufficiently complex passphrase it is beyond brute force possibility due to key hardening.  Of course all of this is open source so one could just look at the source code to realize the poster is just make up garbage.

[Operatr]

Im pretty sure the DEA always confiscates drug money, digital or otherwise, nothing to see here move along

[colour]

the feds can crack your encrypted wallets very easily. all you have to do is dump the private keys with pywallet, and save them in atext file. then you delete the wallet.dat file. rename the app data folder for bitcoin, then reinstall bitcoin. prior to launch bitcoin, move the blockchain from the old bitcoin to the new app data bitcoin folder. now start bitcoin and import the private keys. you now have an unencrypted bitcoin wallet with all the funds of the old encrypted one.

you can get away with it a few times, but they will catch on eventually when you are receiving suspicious packages by mail. usually, they let you get away with it enough times to wait until you purchase felony amounts. it happened to a friend of mine. i can't speak for all states but my uncle is DTF here in Arkansas and this is how it works: they intercept your first purchase from silk road, and they give you a grace period. the second time you recieve a package, they open a file on you. the first time you receive an amount of drugs large enough for them to charge you with Possesion with Intent to deliver, conspiracy by recieving and felony possesion, they bust your ass as soon as you sign.

User "r3wt" is spreading misinformation. Please do not take him serious.

[bg002h]

A new page in bitcoin's history.

True dat. Encrypt your wallet people, and stay off silk road!

You naughty drug dealers...

are people really this stupid to buy illegal drugs online?

Well, for the most part, they've been rather smart about it. Not that I condone it, but I applaud their technical skill.

[EuroTrash]

Im pretty sure the DEA always confiscates drug money, digital or otherwise, nothing to see here move along

I think the dealer "collaborated" under the classic threat of a life in prison. Probably he even showed them how much was in his bitcoin wallet.
I think at least one DEA investigator has spent some time into learning how bitcoin, Tor and Silk Road work. This investigator is not likely to be in for a promotion. Not for catching such a small fish.

[QuestionAuthority]

A new page in bitcoin's history.

True dat. Encrypt your wallet people, and stay off silk road!

You naughty drug dealers...

are people really this stupid to buy illegal drugs online?

Well, for the most part, they've been rather smart about it. Not that I condone it, but I applaud their technical skill.

That method is too much trouble when you can go to any major university in the world and get anything you want easily. I bet there's 10 times the volume sold at student union buildings than you could ever get off of SR.  And half of it is cooked right on campus!

[Chaoskampf]

I'm surprised this hasn't happened earlier...

[Elwar]

It would not be until the police strip searched me and found my private key tattooed on my penis that they would have access to my bitcoins.

That is why they call them your "privates".