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Author Topic: Priming the Pump  (Read 2321 times)
benjamindees
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October 29, 2013, 07:49:51 PM
 #1

Front page of Yahoo:
http://news.yahoo.com/norwegian-man-buys-flat-forgotten-24-bitcoin-investment-174651722.html

Front page of Reddit:
http://www.reddit.com/r/worldnews/comments/1pgr6p/man_buys_27_of_bitcoin_forgets_about_them_finds/

Wired:
http://www.wired.com/wiredenterprise/2013/10/bitcoin_atm_gallery/

FYI the dump will come when the FBI decides to liquidate the SR coins, which could be at any time.

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superduh
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October 29, 2013, 07:52:17 PM
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it's positive news. shows what a smart, risk taking, forward thinker tried. he got rewarded well.

FBI can't legally dump anything until the whole case goes through the court system.
then it will be publicly auctioned at market prices (not sold with slippage). fbi etc also wan'ts to maximize their returns.

ok
bassclef
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October 29, 2013, 07:52:38 PM
 #3

That particular story seems to have grown some legs.

Also the FBI can't just dump the coins whenever. See the thread about it in the legal section.

Edit: after perusing the comment sections of these stories, seems that many are genuinely curious and less skeptical. They don't want to miss the boat this time.
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October 29, 2013, 07:55:02 PM
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October 29, 2013, 07:57:08 PM
 #5

http://www.youtube.com/watch?v=aITEmlIzBNY

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October 29, 2013, 07:59:48 PM
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Join the revolution, Today!
Freedom for a small fee!!!
Exercise your right to free speech, transact on the blockchain!

Ivanhoe
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October 29, 2013, 08:02:36 PM
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Love those ignorant comments on the yahoo website. We still have a long way to go, so much more potential left.

Ignorance is a choice in the age of information.
MAbtc
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October 29, 2013, 08:13:10 PM
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FBI can't legally dump anything until the whole case goes through the court system.
then it will be publicly auctioned at market prices (not sold with slippage). fbi etc also wan'ts to maximize their returns.
Still haven't seen the legal argument as to why the feds can't file for civil forfeiture in parallel to the criminal case. It is not out of the ordinary. If they did that, they don't have to wait for conviction. If Ulbricht can't win an "innocent owner defense", they can has all the coins.

superduh
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October 29, 2013, 08:28:00 PM
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FBI can't legally dump anything until the whole case goes through the court system.
then it will be publicly auctioned at market prices (not sold with slippage). fbi etc also wan'ts to maximize their returns.
Still haven't seen the legal argument as to why the feds can't file for civil forfeiture in parallel to the criminal case. It is not out of the ordinary. If they did that, they don't have to wait for conviction. If Ulbricht can't win an "innocent owner defense", they can has all the coins.

since this is the first case of it's kind in the system i'm sure there will be many new rules created, interpreted and applied. i doubt the gov is rushing to liquidate at the moment.  regardless, when they do sell (they'll prob give it to their buddies at goldman sachs to liquidate) i'm sure they will try to attain the highest prices. no reason not to

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MAbtc
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October 29, 2013, 08:31:43 PM
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FBI can't legally dump anything until the whole case goes through the court system.
then it will be publicly auctioned at market prices (not sold with slippage). fbi etc also wan'ts to maximize their returns.
Still haven't seen the legal argument as to why the feds can't file for civil forfeiture in parallel to the criminal case. It is not out of the ordinary. If they did that, they don't have to wait for conviction. If Ulbricht can't win an "innocent owner defense", they can has all the coins.

since this is the first case of it's kind in the system i'm sure there will be many new rules created, interpreted and applied. i doubt the gov is rushing to liquidate at the moment.  regardless, when they do sell (they'll prob give it to their buddies at goldman sachs to liquidate) i'm sure they will try to attain the highest prices. no reason not to
Regarding the bolded, I don't think so. In practice, I think, this is really no different than luxury cars bought with drug money and sold at auction. Bitcoins derived from illegal activity... they have value... they'll be sold at auction just the same. I just see no legal reason why the feds can't approach it as a civil forfeiture.

superduh
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October 29, 2013, 08:57:30 PM
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FBI can't legally dump anything until the whole case goes through the court system.
then it will be publicly auctioned at market prices (not sold with slippage). fbi etc also wan'ts to maximize their returns.
Still haven't seen the legal argument as to why the feds can't file for civil forfeiture in parallel to the criminal case. It is not out of the ordinary. If they did that, they don't have to wait for conviction. If Ulbricht can't win an "innocent owner defense", they can has all the coins.

since this is the first case of it's kind in the system i'm sure there will be many new rules created, interpreted and applied. i doubt the gov is rushing to liquidate at the moment.  regardless, when they do sell (they'll prob give it to their buddies at goldman sachs to liquidate) i'm sure they will try to attain the highest prices. no reason not to
Regarding the bolded, I don't think so. In practice, I think, this is really no different than luxury cars bought with drug money and sold at auction. Bitcoins derived from illegal activity... they have value... they'll be sold at auction just the same. I just see no legal reason why the feds can't approach it as a civil forfeiture.

you *may* be right. it's to be seen. forfeiting what "bits of information", numbers? it's a bit more complex that's why i think they will take a bit more time. they first need to prove that *all* those bitcoins were derived from illegal activity. that's going to be a bit of work, explanation involved. also, i'm guessing some of the coins confiscated weren't involved in illegal activities at all, were seized maybe off international servers, were seized from non-us entities (people or foreign governments - who knows). they will likely be smart, take their time. i'm guessing.

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MAbtc
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October 29, 2013, 09:22:23 PM
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FBI can't legally dump anything until the whole case goes through the court system.
then it will be publicly auctioned at market prices (not sold with slippage). fbi etc also wan'ts to maximize their returns.
Still haven't seen the legal argument as to why the feds can't file for civil forfeiture in parallel to the criminal case. It is not out of the ordinary. If they did that, they don't have to wait for conviction. If Ulbricht can't win an "innocent owner defense", they can has all the coins.

since this is the first case of it's kind in the system i'm sure there will be many new rules created, interpreted and applied. i doubt the gov is rushing to liquidate at the moment.  regardless, when they do sell (they'll prob give it to their buddies at goldman sachs to liquidate) i'm sure they will try to attain the highest prices. no reason not to
Regarding the bolded, I don't think so. In practice, I think, this is really no different than luxury cars bought with drug money and sold at auction. Bitcoins derived from illegal activity... they have value... they'll be sold at auction just the same. I just see no legal reason why the feds can't approach it as a civil forfeiture.

you *may* be right. it's to be seen. forfeiting what "bits of information", numbers? it's a bit more complex that's why i think they will take a bit more time. they first need to prove that *all* those bitcoins were derived from illegal activity. that's going to be a bit of work, explanation involved. also, i'm guessing some of the coins confiscated weren't involved in illegal activities at all, were seized maybe off international servers, were seized from non-us entities (people or foreign governments - who knows). they will likely be smart, take their time. i'm guessing.

It's not more complex than that. Whether bitcoins are "bits of information" matters not. They have already seized them. As for proof:

Quote
the forfeiture is subject to a lower burden--preponderance of the evidence.  Furthermore, the burden shifts to the defendant once the government shows that the defendant acquired the property around the time of the crime, and no other likely source existed.
http://www.law.cornell.edu/background/forfeiture/

The burden will be on Ulbricht, I am quite sure. Can he provide an "innocent owner" defense? Based on all the presumed sloppiness, I doubt it.

superduh
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October 29, 2013, 09:34:49 PM
 #13

mbatc, you are aware that the government is possesion of coins NOT *allegedly* belonging to Ulbright.... they were seized from people who had an account on his site. servers were located in ireland fyi (based on latest info). some of the coins belonged to SR users. both buyers or sellers who may or may not have committed something illegal in their country (there are about 200 of them today) and some may have not bought or sold anything at all. how would you like to wake up one day and have your assests seized by a foreign government. o too bad your car is on the ship to china, nothing you can do.

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superduh
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October 29, 2013, 09:37:13 PM
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seizing something doesnt make it legally seized. thats why there are courts and judges. the legal system is in place for a reason, right?

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MAbtc
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October 29, 2013, 10:16:49 PM
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mbatc, you are aware that the government is possesion of coins NOT *allegedly* belonging to Ulbright.... they were seized from people who had an account on his site. servers were located in ireland fyi (based on latest info). some of the coins belonged to SR users. both buyers or sellers who may or may not have committed something illegal in their country (there are about 200 of them today) and some may have not bought or sold anything at all. how would you like to wake up one day and have your assests seized by a foreign government. o too bad your car is on the ship to china, nothing you can do.
Do you know why people complain so vehemently about asset forfeitures? Because they are often carried out on completely baseless pretenses. Fortunately for governments, the burden of proof is quite low.

I am aware that they seized coins from SR servers (belonging to users/escrow). They are also in possession of a much larger stash that is presumed to belong to DPR.

You don't understand what I stated earlier. Owners of those coins will need to petition the government for remission -- and unless my earlier presumptions were wrong regarding the ability of the government to at least loosely tie the coins to illegal activity -- they won't. The burden will be on the owners, not the government.

Here's an example of how the government sees it: A drug dealer's house is raided. On one corner of his desk, he has $10k earned legitimately. On another corner of the desk, is $10k he earned by selling drugs. One thing is certain: Without providing the government detailed records (pay stubs, bank statements, etc.) that show a legitimate source for that money, the entirety will indeed be taken by the government.

MAbtc
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October 29, 2013, 10:17:59 PM
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seizing something doesnt make it legally seized. thats why there are courts and judges. the legal system is in place for a reason, right?
Sure, they've been seized and not forfeited. But if you look into asset forfeiture in the US, you'll find that it is much easier to achieve forfeiture than to convict.

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October 29, 2013, 10:19:48 PM
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 Embarrassed the FBI is not going/able to touch those bloody coins for years, stop being ridiculous.

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October 30, 2013, 03:22:53 AM
 #18

Should be an interesting thing to watch.  Normally, cash would be held as evidence until after the trial.  In bitcoin, the evidence is totally public, so there is no need to hold the coins themselves.

If the government dumps the coins before the conviction, it will send a very strong signal that the federal government "gets" bitcoin and has a huge amount of faith in the mechanics of the system.

If the government does not dump them, well it just means they are the dinosaurs everyone was expecting anyway.

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theonewhowaskazu
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October 30, 2013, 05:26:06 AM
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Should be an interesting thing to watch.  Normally, cash would be held as evidence until after the trial.  In bitcoin, the evidence is totally public, so there is no need to hold the coins themselves.

If the government dumps the coins before the conviction, it will send a very strong signal that the federal government "gets" bitcoin and has a huge amount of faith in the mechanics of the system.

If the government does not dump them, well it just means they are the dinosaurs everyone was expecting anyway.

Well, it seems like the FBI is slightly more functional than the rest of the government, so I wouldn't be entirely surprised if they actually figured out how to use online exchanges without tanking the value entirely  Grin

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October 30, 2013, 05:39:23 AM
 #20

Should be an interesting thing to watch.  Normally, cash would be held as evidence until after the trial.  In bitcoin, the evidence is totally public, so there is no need to hold the coins themselves.

If the government dumps the coins before the conviction, it will send a very strong signal that the federal government "gets" bitcoin and has a huge amount of faith in the mechanics of the system.

If the government does not dump them, well it just means they are the dinosaurs everyone was expecting anyway.

Well, it seems like the FBI is slightly more functional than the rest of the government, so I wouldn't be entirely surprised if they actually figured out how to use online exchanges without tanking the value entirely  Grin

And introducting 160k+ new coins to the market isn't necessarily a bad thing. I mean, yes, it is bearish short term, but long term the markets need more liquidity and that means a combination of more money and more coins.

If you haven't heard about what is happening with GAME, check it out.  It's revolutionizing gaming. https://bitcointalk.org/index.php?topic=1266597.0
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