2013-12-23 NYPost - Feds stole my $33 million bitcoin booty - SilkRoad's DPR

[cr1776]

From the New York Post:
http://nypost.com/2013/12/23/government-robbed-me-of-33m-in-bitcoins-silk-road-pirate/

The Internet “pirate” accused of running the notorious illegal-drug-peddling Web site Silk Road claims that the feds are the real buccaneers — robbing him to the tune of $33.6 million worth of the encrypted, virtual currency bitcoin.

Ross Ulbricht — who was arrested in October for allegedly masterminding the mysterious “deep Web” site — recently filed legal papers in Manhattan federal court admitting he “has an interest as owner” of the more than 173,000 bitcoins the government seized through forfeiture from Silk Road.

...

[TraderTimm]

Indirectly he's delaying his own verdict by doing this, I suppose. Unless they just throw it out and get on with the main issue at hand. Like everyone else, I want to know how they go about auctioning them off -- if they even do it, that is. There may be growing incentive to hold on to them for other reasons...

[Bitco]

This is rather unusual.  When the feds seize alleged drug money, claiming that it's yours usually isn't a good strategy.

Anyone have a copy of the actual filing?

[kjlimo]

Well at least we'll get more judges talking about bitcoins...

[hilariousandco]

This is rather unusual.  When the feds seize alleged drug money, claiming that it's yours usually isn't a good strategy.

Ha, that's what I thought.

[LiteCoinGuy]

of course he will get his money back.....NOT 

[cr1776]

I agree, the odds of a Federal Judge giving him the bitcoins back is very, very, low. I think he is fighting for himself and crypto-currencies too. Questions are:

1. Will they force him to disclose any private keys he hasn't disclosed?
2. How will the classify bitcoin?
3. What will become of it? Auction? Ignored?

...

[hilariousandco]

I agree, the odds of a Federal Judge giving him the bitcoins back is very, very, low. I think he is fighting for himself and crypto-currencies too. Questions are:

1. Will they force him to disclose any private keys he hasn't disclosed?
2. How will the classify bitcoin?
3. What will become of it? Auction? Ignored?

...

1) How will they force him? They might try give him a longer sentence perhaps, but I don't think they're gonna torture them out of him.
2) I think they classify them as assets or just seized funds.
3) The feds have said they're gonna liquidate them. How, I do not know, but I hope they don't dump them all at market at once.

[jzcjca00]

Reminds me if what O.J. said right after his trial, "So can I get my gloves back now?"

[bryant.coleman]

This is stupidity, isn't it? If he claims that the coins are his own, then he is indirectly admitting that he ran SR 1.0 as an owner. Else, if the Feds ask him how he came to the possession of so many coins, what will be his answer?

[rebuilder]

Maybe the evidence against him is strong enough that his best bet is to try to recover the Bitcoins to pay for the best defense he can get. Admit guilt, try to get the lowest possible sentence. Might make sense if the situation were desperate and no decent bargain was on the table for an outright confession. And it certainly does look like a pretty desperate situation for Ulbricht...

[bryant.coleman]

Maybe the evidence against him is strong enough that his best bet is to try to recover the Bitcoins to pay for the best defense he can get. Admit guilt, try to get the lowest possible sentence. Might make sense if the situation were desperate and no decent bargain was on the table for an outright confession. And it certainly does look like a pretty desperate situation for Ulbricht...

1. Even if he claims that the BTCs are his own, he will not get them as they are currently seized as a part of the investigation. Plus, it was accumulated through illegal activities.

2. The lowest possible sentence here seems to be life without parole. Then why bother with a confession?

[hilariousandco]

Maybe the evidence against him is strong enough that his best bet is to try to recover the Bitcoins to pay for the best defense he can get. Admit guilt, try to get the lowest possible sentence. Might make sense if the situation were desperate and no decent bargain was on the table for an outright confession. And it certainly does look like a pretty desperate situation for Ulbricht...

1. Even if he claims that the BTCs are his own, he will not get them as they are currently seized as a part of the investigation. Plus, it was accumulated through illegal activities.

2. The lowest possible sentence here seems to be life without parole. Then why bother with a confession?

I'm sure there must be some logic/reasoning as to why he's filing a suit to reclaim them. When does his trial start?

[rebuilder]

Maybe the evidence against him is strong enough that his best bet is to try to recover the Bitcoins to pay for the best defense he can get. Admit guilt, try to get the lowest possible sentence. Might make sense if the situation were desperate and no decent bargain was on the table for an outright confession. And it certainly does look like a pretty desperate situation for Ulbricht...

1. Even if he claims that the BTCs are his own, he will not get them as they are currently seized as a part of the investigation. Plus, it was accumulated through illegal activities.

2. The lowest possible sentence here seems to be life without parole. Then why bother with a confession?

He's contending the coins weren't legally subject to seizure. If that seems like a very thin straw to hang on to, maybe that's all he's got right now.

[cdog]

They are encrypted in a wallet which Im sure he has backed up and waiting for his release, why would he admit to owning them? It cant help his criminal case. Im baffled...

[hilariousandco]

They are encrypted in a wallet which Im sure he has backed up and waiting for his release, why would he admit to owning them? It cant help his criminal case. Im baffled...

Are you sure they're safe and encrypted? If he had back-ups why would he bother suing? I'm sure the Feds cracked them and they've been transferred into the Feds wallet, but I could be wrong.

[bryant.coleman]

Are you sure they're safe and encrypted? If he had back-ups why would he bother suing? I'm sure the Feds cracked them and they've been transferred into the Feds wallet, but I could be wrong.

The coins were transferred to a different wallet a few hours after Ullbricht was arrested. So I think that the FBI is in possession of the private keys / passwords.

[hilariousandco]

Are you sure they're safe and encrypted? If he had back-ups why would he bother suing? I'm sure the Feds cracked them and they've been transferred into the Feds wallet, but I could be wrong.

The coins were transferred to a different wallet a few hours after Ullbricht was arrested. So I think that the FBI is in possession of the private keys / passwords.

I think there was two sets. The ones they got from seizing SR, and his own personal stash from commissions.

[bryant.coleman]

I think there was two sets. The ones they got from seizing SR, and his own personal stash from commissions.

Is it so? I thought that the FBI seized some 140,000 BTCs, all of which were held in a single online wallet.

[ArticMine]

There are two addresses:

https://blockchain.info/address/1FfmbHfnpaZjKFvyi1okTjJJusN455paPH with 144,341.52165741 BTC allegedly DPR's personal stash

and

https://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX with 29,658.53150978 BTC allegedly the SikRoad operating wallet(s).

Both are under the control of the US Government.