Can the U.S. government sell seized bitcoins?

[DeathAndTaxes]

Now that bitcoin is called a currency by the government, can the sell btc's seized from raids?

Bitcoin is not called a currency by the government

And yes, seized things are regulary auctioned

Really? I was told that btc is consided a currency by the us government.

No FinCEN stated that virtual currencies are regulated as a method of money transmission then never indicated they are considered a currency under US law.  In the Senate hearing it even came up "what is Bitcoin?  A commodity? A currency?  Something else?" and the experts did not provide an answer and FinCEN indicated that decision is outside of FinCEN's "scope".

Part of the issue is most US laws & regulations define currency as the money of the United States or a foreign nation which Bitcoin obviously is not.  Remember these laws were written when nobody considered the possibility of a currency that is neither the money of the United States, nor issued by any foreign government.  

So bitcoins is just bitcoin? There is no classification for it?

Yes although FinCEN has indicated that the exchanging of virtual currency for real currency is money transmission and those entities are regulated as money service businesses.  However this doesn't really classify Bitcoin rather it says "we regulate money service businesses and this is one form of it, just like gift cards, prepaid accounts, check cashing, etc are other forms of money service businesses". FinCEN kinda sidestepped the classification by saying it doesn't matter if it is a currency or not we still regulate it.  In the hearing they pointblank said that the authority to classify Bitcoin as a curency, or commodity, or something else does not lie with them but they will regulate it anyways.   AFAIK no other governmental agency or legislative body in the US has made any kind of definitive classification.  

I am sure it will eventually happen.  Germany has classified Bitcoin as a private money, a financial instrument.  Governments like boxes so they will either put it into a box, or make a new box as the idea of something outside of a box is horrifying to legislators.

[emmocks]

They may wait to sell it cheaply under a crash, to try to undermine it.The profit is negligible, but then, so is that i guess..

[hromobiti]

Part of the issue is most US laws & regulations define currency as the money of the United States or a foreign nation which Bitcoin obviously is not.  Remember these laws were written when nobody considered the possibility of a currency that is neither the money of the United States, nor issued by any foreign government. 

What if some small foreign nation declare Bitcoin as native currency, the US Banks could buy/sell it and provide Bitcoin accounts I guess

[nahtnam]

Now that bitcoin is called a currency by the government, can the sell btc's seized from raids?

Bitcoin is not called a currency by the government

And yes, seized things are regulary auctioned

Really? I was told that btc is consided a currency by the us government.

No FinCEN stated that virtual currencies are regulated as a method of money transmission then never indicated they are considered a currency under US law.  In the Senate hearing it even came up "what is Bitcoin?  A commodity? A currency?  Something else?" and the experts did not provide an answer and FinCEN indicated that decision is outside of FinCEN's "scope".

Part of the issue is most US laws & regulations define currency as the money of the United States or a foreign nation which Bitcoin obviously is not.  Remember these laws were written when nobody considered the possibility of a currency that is neither the money of the United States, nor issued by any foreign government.  

So bitcoins is just bitcoin? There is no classification for it?

Yes although FinCEN has indicated that the exchanging of virtual currency for real currency is money transmission and those entities are regulated as money service businesses.  However this doesn't really classify Bitcoin rather it says "we regulate money service businesses and this is one form of it, just like gift cards, prepaid accounts, check cashing, etc are other forms of money service businesses". FinCEN kinda sidestepped the classification by saying it doesn't matter if it is a currency or not we still regulate it.  In the hearing they pointblank said that the authority to classify Bitcoin as a curency, or commodity, or something else does not lie with them but they will regulate it anyways.   AFAIK no other governmental agency or legislative body in the US has made any kind of definitive classification.  

I am sure it will eventually happen.  Germany has classified Bitcoin as a private money, a financial instrument.  Governments like boxes so they will either put it into a box, or make a new box as the idea of something outside of a box is horrifying to legislators.

You said that the government can regulate bitxoin... What exactly do they do?

[DeathAndTaxes]

You said that the government can regulate bitxoin... What exactly do they do?

I didn't say that. There is no "can" about it.

FinCEN has stated that exchanging virtual currency for real currency is a regulated activity so they already ARE regulating that activity.  As for what does that constitute?  Well that is a little off topic but generally speaking a money service business must:
a) register with FinCen
b) keep records on clients & transactions
c) implement an AML program
d) report suspicious transactions and other transactions over reporting threshold.

[nahtnam]

You said that the government can regulate bitxoin... What exactly do they do?

I didn't say that. There is no "can" about it.

FinCEN has stated that exchanging virtual currency for real currency is a regulated activity so they already ARE regulating that activity.  As for what does that constitute?  Well that is a little off topic but generally speaking a money service business must:
a) register with FinCen
b) keep records on clients & transactions
c) implement an AML program
d) report suspicious transactions and other transactions over reporting threshold.

AML? And of course pay taxes.

[Itun]

what if the persons wallet was encrypted and use did not give them the password?
Can they not only seize if they confiscate the pc/hardware? what if the back up was placed on to the cloud and a transaction was made on another pc?

They already moved them (so they have the keys).  Some are here:

http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX

The rest are here:

https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH

So, by moving the coins and consolidating them they have been shown to own them.

This may not be all of them but it is the BTC that the FBI has found so far.

Holy crap the FBI has a lot.

If they sell the btc at market price right now, it will surely pay them back for the expenses of the investigation.

[nahtnam]

what if the persons wallet was encrypted and use did not give them the password?
Can they not only seize if they confiscate the pc/hardware? what if the back up was placed on to the cloud and a transaction was made on another pc?

They already moved them (so they have the keys).  Some are here:

http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX

The rest are here:

https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH

So, by moving the coins and consolidating them they have been shown to own them.

This may not be all of them but it is the BTC that the FBI has found so far.

Holy crap the FBI has a lot.

If they sell the btc at market price right now, it will surely pay them back for the expenses of the investigation.

And then some... Probably the expenses for the whole year!

[Itun]

what if the persons wallet was encrypted and use did not give them the password?
Can they not only seize if they confiscate the pc/hardware? what if the back up was placed on to the cloud and a transaction was made on another pc?

They already moved them (so they have the keys).  Some are here:

http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX

The rest are here:

https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH

So, by moving the coins and consolidating them they have been shown to own them.

This may not be all of them but it is the BTC that the FBI has found so far.

Holy crap the FBI has a lot.

If they sell the btc at market price right now, it will surely pay them back for the expenses of the investigation.

And then some... Probably the expenses for the whole year!

I know.. seriously, FBI made bank busting Silk Road! 

The government should use the money to pay for its debts though, it has too much...

[nahtnam]

what if the persons wallet was encrypted and use did not give them the password?
Can they not only seize if they confiscate the pc/hardware? what if the back up was placed on to the cloud and a transaction was made on another pc?

They already moved them (so they have the keys).  Some are here:

http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX

The rest are here:

https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH

So, by moving the coins and consolidating them they have been shown to own them.

This may not be all of them but it is the BTC that the FBI has found so far.

Holy crap the FBI has a lot.

If they sell the btc at market price right now, it will surely pay them back for the expenses of the investigation.

And then some... Probably the expenses for the whole year!

I know.. seriously, FBI made bank busting Silk Road! 

The government should use the money to pay for its debts though, it has too much...

Ya but then again, if they sold all of it at the same time, btc would drop like crazy.

[Itun]

what if the persons wallet was encrypted and use did not give them the password?
Can they not only seize if they confiscate the pc/hardware? what if the back up was placed on to the cloud and a transaction was made on another pc?

They already moved them (so they have the keys).  Some are here:

http://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX

The rest are here:

https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH

So, by moving the coins and consolidating them they have been shown to own them.

This may not be all of them but it is the BTC that the FBI has found so far.

Holy crap the FBI has a lot.

If they sell the btc at market price right now, it will surely pay them back for the expenses of the investigation.

And then some... Probably the expenses for the whole year!

I know.. seriously, FBI made bank busting Silk Road! 

The government should use the money to pay for its debts though, it has too much...

Ya but then again, if they sold all of it at the same time, btc would drop like crazy.

Yeah, that's true..

They should sell large amounts, a bit cheaper than market price, to big companies interested in investing in them.

[BurtW]

They will just auction them off to the highest bidder.  It will be a very large purchase so start saving now and when the auction happens is a few years you will be ready to jump in with a bid!

[OC19850520]

I know.. seriously, FBI made bank busting Silk Road! 

The government should use the money to pay for its debts though, it has too much...

Seriously, this would be biggest waste of the Bitcoins to pay very small fraction of debts...

[nahtnam]

I know.. seriously, FBI made bank busting Silk Road! 

The government should use the money to pay for its debts though, it has too much...

Seriously, this would be biggest waste of the Bitcoins to pay very small fraction of debts...

Why? They owe a lot of money and they have a lot of money in bitcoins. If they sell all that they have, they would get millions paid off.

[totemITnow]

They will just auction them off to the highest bidder.  It will be a very large purchase so start saving now and when the auction happens is a few years you will be ready to jump in with a bid!

Why not split the BTC and sell separately, small buyers would be allowed to buy...

[nahtnam]

They will just auction them off to the highest bidder.  It will be a very large purchase so start saving now and when the auction happens is a few years you will be ready to jump in with a bid!

Why not split the BTC and sell separately, small buyers would be allowed to buy...

Im pretty sure they would also do that.

[Gator-hex]

Bitcoin is not called a currency by the government

In the Texas case S.E.C vs Trendon Shavers (Pirateat40), his defense was that it wasn't really money, the S.E.C proves it was commodity based money and that he was spending it on goods and services!

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539730583#.Un-nYiejN3U

[nahtnam]

Bitcoin is not called a currency by the government

In the Texas case S.E.C vs Trendon Shavers (Pirateat40) the government has to prove it was money and that he could use it to buy things.

http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539730583#.Un-nYiejN3U

Well even if they considered it like gold, it would be enough since gold can be traded.

[Gator-hex]

The USA taxes barter trades (commodity swaps), this means, Bitcoin had to be legally recognized in the USA courts!

They can sell the proceeds of crime. They would have to brute force the password on the wallet first though.

Although they have another law for that, if you don't hand over you password when requested by a court, you get more jail time. God help those who are genuinely forgetful!

[po1992one]

Although they have another law for that, if you don't hand over you password when requested by a court, you get more jail time. God help those who are genuinely forgetful!

Whats the difference between 10 years if you give password and say 15 years if you dont ? You will be out in 2/3 of jailtime anyway if your not problematic, so why give your Bitcoins to gov !