What happens when the US Government liquidates 144,000 BTC?

[CEG5952]

By my understanding of the law. the "FBI" can not sell them until DPR is convicted, as if he is proved innocent, they may have to give them back (although i think this is VERY unlikely to happen).

no, legally they dont have to do a criminal forfeiture. they can file for forfeiture civilly without conviction. but that is unlikely to happen.

[Ford]

By my understanding of the law. the "FBI" can not sell them until DPR is convicted, as if he is proved innocent, they may have to give them back (although i think this is VERY unlikely to happen).

no, legally they dont have to do a criminal forfeiture. they can file for forfeiture civilly without conviction. but that is unlikely to happen.

Dont you just love the law 
whatever happened to innocent UNTIL proven guilty......

[CEG5952]

By my understanding of the law. the "FBI" can not sell them until DPR is convicted, as if he is proved innocent, they may have to give them back (although i think this is VERY unlikely to happen).

no, legally they dont have to do a criminal forfeiture. they can file for forfeiture civilly without conviction. but that is unlikely to happen.

Dont you just love the law 
whatever happened to innocent UNTIL proven guilty......

hence the constant outcry from civil libertarians about asset forfeiture laws. they are unconstitutional and unethical.

[DeathAndTaxes]

By my understanding of the law. the "FBI" can not sell them until DPR is convicted, as if he is proved innocent, they may have to give them back (although i think this is VERY unlikely to happen).

no, legally they dont have to do a criminal forfeiture. they can file for forfeiture civilly without conviction. but that is unlikely to happen.

Dont you just love the law 
whatever happened to innocent UNTIL proven guilty......

Forfeiture is a separate action it has its own procedures and its own burden of proof.  There is no such thing as innocent until proven guilty that is just a quaint phrase to make people sleep good at night.  All you get is due process.  However as indicated for a variety of reasons forfeiture almost never happens until long after the criminal trial is complete.   

Also to correct your prior post, the coins don't belong to the FBI, they never did belong to the FBI, and they never will belong to the FBI.  Prior to forfeiture they belong to the original owner they are just frozen.  If the government loses their forfeiture case they return to the original owner, if the government wins the assets becomes the property of the US TREASURY.  The DOJ is mandated with selling off forfeited assets as the government simply wants the cash value not the asset.

This isn't anything new or novel.  Every year for the past century the DOJ has sold off billions and billions of dollars worth of forfeited assets.  Cars, boats, planes, real estate, luxury goods, stocks, bonds, gold, jewelry, etc.  Even rare fine art and antiques.  Just about anything you can imagine the DOJ has seized and sold it.

[Ford]

By my understanding of the law. the "FBI" can not sell them until DPR is convicted, as if he is proved innocent, they may have to give them back (although i think this is VERY unlikely to happen).

no, legally they dont have to do a criminal forfeiture. they can file for forfeiture civilly without conviction. but that is unlikely to happen.

Dont you just love the law 
whatever happened to innocent UNTIL proven guilty......

hence the constant outcry from civil libertarians about asset forfeiture laws. they are unconstitutional and unethical.

<< fully agree. I;m in the UK and we dont have a "constitution" as such, but things are very similar here too!
(i was recently in court for not paying "council tax" (everyone here has to pay this if they live in a house, unless you are on a low income). when i offered a full & prepared defence i was quickly told "you must be mistaken, as you are not entitled to a defence"... needless to say, i was found guilty....  )

[fred1111]

Keeping them would mean treating bitcoins like USD, which just isn't going to happen any time this decade.

[Junko]

Before they liquidate, they will say they "accidentally" threw out the hard drive they were storing them on and at a later date re-allocate the "lost" bitcoins to the CIA. ez game

[Syke]

You don't really think the sovereign nation of the United States is going to transfer >$200 million worth of coins to some place like BTC-e just so the operator can say "oops we got hacked" and retire the next day do you?

Quote of the day.

[bullioner]

There is no such thing as innocent until proven guilty that is just a quaint phrase to make people sleep good at night. [...]

The law is to presume someone's innocent until they're proven guilty.  This is very different from someone actually *being* innocent until proven guilty, which would be a bit of an epistemological magic trick.

[pand70]

What kind of effect will this have on the Bitcoin economy?  Holding so many coins give them immense power over the entire Bitcoin economy, as they'd be able to crash the market whenever they decide to pull the trigger.  They may try to sell them off slowly... or maybe they won't.  These are bureaucrats we're talking about, who are beholden to a lot of powerful people.  Has anyone pondered what would happen to the bitcoin economy once the Ulbricht trial is over, and all the coins are unloaded?

If they sell the coins then the market will crash and then it will recover in an hour or something. If they don't sell then nothing will happen. In any case nothing will happen.

[DeathAndTaxes]

There is no such thing as innocent until proven guilty that is just a quaint phrase to make people sleep good at night. [...]

The law is to presume someone's innocent until they're proven guilty.  This is very different from someone actually *being* innocent until proven guilty, which would be a bit of an epistemological magic trick.

Yeah the law DOESN'T presume you are innocent until proven guilty, like I said that is something people say to make them sleep well at night.  If the law presumed you were innocent until the state can proven it then the state would be unable to do things like perform arrests with mere probable cause (a far lower burden then "beyond all reasonable doubt"), remand defendants (holding you in prison without bail until such time as you can prove that you are not guilty), or place the burden/cost of a defense on the defendant even one later found to be innocent (yeah maybe you don't lose your freedom but you still lose the time and cost of your successful defense).

All you are guaranteed is due process.  Nothing more, nothing less.

[Peter R]

What kind of effect will this have on the Bitcoin economy?  Holding so many coins give them immense power over the entire Bitcoin economy, as they're able to rash the market whenever they decide to pull the trigger.  Has anyone pondered what would happen to the bitcoin economy once the Ulbricht trial is over, and the coins are liquidated?

They won't sell them on the exchange.  It will be auctioned off like other forfeited property.  If you want to participate you will wire earnest money to the US treasury in advance.

You don't really think the sovereign nation of the United States is going to transfer >$200 million worth of coins to some place like BTC-e just so the operator can say "oops we got hacked" and retire the next day do you?

Yes, they will auction them off, as D&T describes. 

If the auction is well-advertised and transparent, I predict the bitcoins sell for *greater* than the prevailing market price at the time.  People on this forum worry about large sellers crashing the price.  But remember, large buyers wanting to get in have the opposite worry (rallying the price too high before they've established their position).  This auction would be a good opportunity for wealthy individuals or funds to establish a large position without slippage. 

[BitDreams]

IMO, if any government gets involved, its going to lose every positive factor that bitcoin advocates appreciate.

It will just become another currency.

They are all involved. Their rules are already in place and regulation is everywhere. What government did do in the United States was to clarify how it plans to react to it. There was one speaker (in those 6 hours of vids) that said, major criminals won't use Bitcoin because it is so traceable.

[cdog]

How did they seize all those coins? I thought part of the appeal of Bitcoin was that your coins couldnt be seized or frozen as long as nobody knows your wallet password...

[justusranvier]

I thought part of the appeal of Bitcoin was that your coins couldnt be seized or frozen as long as nobody knows your wallet password...

One you hand your coins over to somebody else to manage for you (deposit them in an account on some web site), they aren't your coins any more.

[Parazyd]

They can hold them, never release them.  BTC has an actual limit in quantity.  Having 144,000 of them is kind of like holding a hostage.

US Government does NOT like BTC remember.

The US Government doesn't miss business opportunities.

[BitchicksHusband]

How did they seize all those coins? I thought part of the appeal of Bitcoin was that your coins couldnt be seized or frozen as long as nobody knows your wallet password...

They arrested him with his computer on and his wallet open.  Since he was under surveillance, they probably timed the arrest for WHEN he had his wallet open.

[ajax3592]

I'd expect they will keep it for another year or so. 

[piramida]

If they sell the coins I think it would be the same as with any other stolen (oops, confiscated) property - via a private auction. So I doubt these coins would see the market right away. But definitely, some of it would, eventually.

They arrested him with his computer on and his wallet open.  Since he was under surveillance, they probably timed the arrest for WHEN he had his wallet open.

Which wallet allows a withdraw without a confirmation password / full decrypt? I think he might have cooperated on this one, otherwise seems unlikely. And really, having all wallets with 100k coins open and decrypted at the same time? He's Dread, not Dumb

[TERA]

The price will crash from 10,000 to 7,000 and take 3 weeks to recover.