FBI Second round auction of 50,000 btc! Who is gonna win this?

[cuddaloreappu]

The U.S. Marshal’s Service on Monday announced a second series of auctions to sell off thousands of bitcoins related to the seizure of the online criminal bazaar known as the Silk Road. The first auction, which took place in June, sold off bitcoins belonging to Silk Road, while the new auction will sell those belonging to the site’s mastermind, Ross Ulbricht, better known as “Dread Pirate Roberts.”

In the second phase of the auction, scheduled to take place over six hours on December 4, the Marshals will sell off 20 blocks of bitcoins, in chunks of 2,000 or 3,000 at a time. To participate in the auction, bidders must pre-register and supply documentation by December 1.

This time around, the U.S. government is likely to fetch less money for each bitcoin than it did in the first round in June, when it sold 29,655 bitcoins for around $18 million to venture capitalist Tim Draper. At that time, each unit of the virtual currency fetched around $600, but more recently the price has hovered closer to $380

https://gigaom.com/2014/11/17/feds-to-auction-50000-bitcoins-from-dread-pirate-roberts/?utm_source=dlvr.it&utm_medium=twitter

[lyth0s]

How are they able to auction off his coins when he hasn't been convicted of anything yet?

[cuddaloreappu]

How are they able to auction off his coins when he hasn't been convicted of anything yet?

In the same way they did it previously with 30k btc..arrogant guys

[inBitweTrust]

How are they able to auction off his coins when he hasn't been convicted of anything yet?

In America inanimate objects are guilty until proven innocent and cannot defend themselves so they are stolen. You don't even need to be charged with a crime either because the bitcoins and cash can be charged with crimes directly.

You have the option of spending a lot of time and money after you win your innocence to try and reclaim the assets after the fact, many people don't bother though because its an uphill battle that you may not win anyways.  

https://www.youtube.com/watch?v=3kEpZWGgJks

[TinaK]

FBI is the biggest whale actually!

[bocobit]

I must have missed this, but how did the FBI get to Ross's bitcoins?  Did he voluntarily give them up?

[Beliathon]

How are they able to auction off his coins when he hasn't been convicted of anything yet?

America is a rotting, thoroughly corrupt military empire with a pay 2 play "justice" system. If you have any questions, don't ask them because you might get shot.

[var53]

I must have missed this, but how did the FBI get to Ross's bitcoins?  Did he voluntarily give them up?

I think so, I heard they did a deal with him that they could sell the bitcoins, but if he wins the trial he gets the money from the sale.

[inBitweTrust]

I must have missed this, but how did the FBI get to Ross's bitcoins?  Did he voluntarily give them up?

They were only able to steal 26,000 bitcoins from the silk road merchants and clients and than find and uncover one of his wallets holding 144,000 Bitcoins.
This was done with a multiple year investigation from the FBI and most likely other departments like the NSA to track down him , the server, and his passwords.

These funds were taken under a form of theft called "asset forfeiture" and than they used Parallel construction to lie to the court to cover up their illegal methods of finding and stealing these assets.

I think so, I heard they did a deal with him that they could sell the bitcoins, but if he wins the trial he gets the money from the sale.

Unfortunately, that is not how it works. If you win the trial you have the opportunity to try and prove the bitcoins were yours and legally obtained through an expensive and long court battle. Under asset forfeiture you are guilty until proven innocent and the state literally sues the inanimate objects themselves(I know it sounds like a joke but sadly isn't) This is the reason you must try and secure your bitcoins better with multisig paper wallets. Whether it is a hacker or a bunch of psychopaths in uniform your funds can be stolen with enough effort and a 0 day exploit placed on your computer..

[Dabs]

I must have missed this, but how did the FBI get to Ross's bitcoins?  Did he voluntarily give them up?

The FBI has a lot of $5 wrenches.

[cuddaloreappu]

I must have missed this, but how did the FBI get to Ross's bitcoins?  Did he voluntarily give them up?

The FBI has a lot of $5 wrenches.

That would be torture right!... how come torture is permitted

[deluxeCITY]

How are they able to auction off his coins when he hasn't been convicted of anything yet?

Ross has consented to the sale of of the ~144k of bitcoin under the stipulation that the proceeds from the sale would remain under dispute. It was reported that he agreed to have his bitcoin sold shortly after the FBI was able to take the bitcoin from his laptop, which was a year ago, however they have been working out the details ever since. They apparently have finally reached an agreement only recently

[Beliathon]

That would be torture right!... how come torture is permitted

"uhhh... national security.. protect the children.. 9/11... uhh.. there was no torture.. THIS INTERVIEW IS OVER."

[seriouscoin]

How are they able to auction off his coins when he hasn't been convicted of anything yet?

In America inanimate objects are guilty until proven innocent and cannot defend themselves so they are stolen. You don't even need to be charged with a crime either because the bitcoins and cash can be charged with crimes directly.

You have the option of spending a lot of time and money after you win your innocence to try and reclaim the assets after the fact, many people don't bother though because its an uphill battle that you may not win anyways.  

https://www.youtube.com/watch?v=3kEpZWGgJks

Shocking.....When will American ppl wake up?

[cbeast]

I must have missed this, but how did the FBI get to Ross's bitcoins?  Did he voluntarily give them up?

The FBI has a lot of $5 wrenches.

Someone needs to update this with decoy addresses, nLockTime, and multisig. It's just lowbrow levity.

[Beliathon]

How are they able to auction off his coins when he hasn't been convicted of anything yet?

In America inanimate objects are guilty until proven innocent and cannot defend themselves so they are stolen. You don't even need to be charged with a crime either because the bitcoins and cash can be charged with crimes directly.

You have the option of spending a lot of time and money after you win your innocence to try and reclaim the assets after the fact, many people don't bother though because its an uphill battle that you may not win anyways.  

https://www.youtube.com/watch?v=3kEpZWGgJks

Shocking.....When will American ppl wake up?

When they can't afford gas or they can't watch their football game.

[smoothie]

FBI THE FED is the biggest whale actually!

FTFY 

[Bitcoinpro]

whats the addresses again of these coins or the last auction

[RobertDJ]

I must have missed this, but how did the FBI get to Ross's bitcoins?  Did he voluntarily give them up?

The FBI has a lot of $5 wrenches.

Ross seemed to have had to learn about security from other people (meaning he had little/no prior knowledge about security) and was able to stay somewhat under the radar as a person holding massive amounts of bitcoin (for example he held 140k+ bitcoin on a computer that was not "cold") so he possibly employed a weak password and/or there was some vulnerability in his computer that would make any advisory somewhat easily be able to "figure out" what the password is

[sickpig]

I must have missed this, but how did the FBI get to Ross's bitcoins?  Did he voluntarily give them up?

I think so, I heard they did a deal with him that they could sell the bitcoins, but if he wins the trial he gets the money from the sale.

From the order: http://www.usmarshals.gov/assets/2014/dpr-bitcoins/order.pdf

Code:

WHEREAS, the Government and Ulbricht agree that, due to the volatile market for bitcoins, the Computer Hardware Bitcoins risk 
losing value during the pendency of the forfeiture proceedings;

WHEREAS, the Government and Ulbricht agree that the Computer Hardware Bitcoins are to be liquidated or sold by the Government 
before the conclusion of the forfeiture proceedings, with the net proceeds of the sale to be held as substitute res pending further order of this Court;

[BitCoinNutJob]

FBI is the biggest whale actually!

Not if they keep selling and they not anyway, roger ver and mark karpeles would be the biggest whales.  MK was reported as having 300k btc before mtgox catastrophe.

[Flashman]

Dafuq are "Computer Hardware Bitcoins" ?

[evok3d]

Just a few questions:

1. Why is it that FBI/USA is the one always chasing these things down and not any other agency from other countries - correct me if i am wrong?

2. Who is to say they did not run the entire operation as a way of getting large sums of BTC?

3. How are they allowed to sell and keep the money/btc for something that in no way belongs to them?

[calchuchesta]

Thats insane. The Winklevi will win.

[halorose]

Thats insane. The Winklevi will win.

who is the Winklevi?

[seriouscoin]

Just a few questions:

1. Why is it that FBI/USA is the one always chasing these things down and not any other agency from other countries - correct me if i am wrong?

2. Who is to say they did not run the entire operation as a way of getting large sums of BTC?

3. How are they allowed to sell and keep the money/btc for something that in no way belongs to them?

You must be new,

They have something called " civil forfeiture law" that allows them to basically rob anyone (seize your asset even you're not convicted of any crime)

Also all the drug raid's goal is to seize assets/money, they dont want actually narcotic drugs because its worth $0 (they have to burn it). Assets/money will be in their pure profits. They even call it "pennies from heaven"

[evok3d]

Also all the drug raid's goal is to seize assets/money, they dont want actually narcotic drugs because its worth $0 (they have to burn it). Assets/money will be in their pure profits. They even call it "pennies from heaven"

So really, its all a hunt to gain control of money so that others may not become as powerful and the drugs is just the reasoning, as is oil, gas, gold and other things of "value".

They have something called " civil forfeiture law" that allows them to basically rob anyone (seize your asset even you're not convicted of any crime)

That is very sad to hear. There was once a time where the people decided who ran a country and if they were not happy they would overtake such powers. They take the money on behalf of a country, yet the people receive 0% benefits from it even though their taxes/expenses pay for the people who go after these people.

Thank you for clearing that for me. Cheers!

[Piston Honda]

I'm gonna bid 

[ninjaskip]

FBI is the biggest whale actually!

Lol, sad but true.

[kolloh]

Wow, another big auction to flood the market with coins. 

[cryptworld]

whoever who wins it,it is going to pay a high overprice

[QuestionAuthority]

Also all the drug raid's goal is to seize assets/money, they dont want actually narcotic drugs because its worth $0 (they have to burn it). Assets/money will be in their pure profits. They even call it "pennies from heaven"

So really, its all a hunt to gain control of money so that others may not become as powerful and the drugs is just the reasoning, as is oil, gas, gold and other things of "value".

They have something called " civil forfeiture law" that allows them to basically rob anyone (seize your asset even you're not convicted of any crime)

That is very sad to hear. There was once a time where the people decided who ran a country and if they were not happy they would overtake such powers. They take the money on behalf of a country, yet the people receive 0% benefits from it even though their taxes/expenses pay for the people who go after these people.

Thank you for clearing that for me. Cheers!

Govt. auctions are great! A long time ago I got some drug dealers Porsche 911 turbo for pennies on the dollar at an Oakland County Sheriffs auction. God I loved that car.

[yeponlyone]

Just a few questions:

1. Why is it that FBI/USA is the one always chasing these things down and not any other agency from other countries - correct me if i am wrong?

2. Who is to say they did not run the entire operation as a way of getting large sums of BTC?

3. How are they allowed to sell and keep the money/btc for something that in no way belongs to them?

1. Not sure sorry

2. No one can say but we assume it was done as part of the operation to bust the Silk Road

3. It was forfeited to them (if gold is found in a drug dealer's house they also claim it) since it was part of the crime they say.

[Flashman]

Moral of the story, if you notice your neighbour seems to employ a lot of strange looking "armed guards", don't ask him to keep your tax refuge valuables in his basement.

[Puppet]

IM gonna win this. Im bidding 25K BTC

[pajak666]

I hope it will not be Draper again, I don't feel good when one person holds such big ammount of btc

[Eisenhower34]

I must have missed this, but how did the FBI get to Ross's bitcoins?  Did he voluntarily give them up?

I think so, I heard they did a deal with him that they could sell the bitcoins, but if he wins the trial he gets the money from the sale.

From the order: http://www.usmarshals.gov/assets/2014/dpr-bitcoins/order.pdf

Code:

WHEREAS, the Government and Ulbricht agree that, due to the volatile market for bitcoins, the Computer Hardware Bitcoins risk 
losing value during the pendency of the forfeiture proceedings;

WHEREAS, the Government and Ulbricht agree that the Computer Hardware Bitcoins are to be liquidated or sold by the Government 
before the conclusion of the forfeiture proceedings, with the net proceeds of the sale to be held as substitute res pending further order of this Court;

I am surprised that they are only selling a small portion of the coins and only after such a long time (and after the price has fallen so much).

It sounds like the government ripped Ross off because they will likely be able to sell the SR1 coins, which no one ever claimed ownership in at a higher price then this batch of coins

[Dabs]

Moral of the story, if you notice your neighbour seems to employ a lot of strange looking "armed guards", don't ask him to keep your tax refuge valuables in his basement.

Why not? I'd think that armed guards are actually a good thing. But maybe it would be better if they were not so easily noticed.

[bryant.coleman]

Thats insane. The Winklevi will win.

Winklevi bought their 100K coins when the exchange rate was 1BTC = $10. They won't be tempted now. I've heard that they are busy protecting their Bitcoin stash from robbers and hackers. 

[Kakmakr]

The thing is, many of these guys get arrested, and they cannot get hold of the stored BTC.
Then they have to defend themselves against a system funded by the citizens Tax money. ^Grin^

Only way out, is to surrender and make a deal and hope for the best outcome.

When the LAW man is finished with you, the TAX man jumps in and demand their share, so you F@#%ed anyway you look at it. ^LoL^

[bornil267645]

Well it certainly not going to be me. Well it would have been if I could auction for the BTC !!!

[NEM minnow]

I doubt one person will buy them all for market price again.  The last guy got burnt and has like 1/3 of his money. 

That said, these auctions are actually good for the ecosystem I think.  It gives some big players a change to dip into the Bitcoin coin system.  There are some super rich people that can't be bothered with buying a few Bitcoins at a time.  This is an easy way for them to pick up 10 million worth of Bitcoin at once and not stress about it. 

[NEM minnow]

Also all the drug raid's goal is to seize assets/money, they dont want actually narcotic drugs because its worth $0 (they have to burn it). Assets/money will be in their pure profits. They even call it "pennies from heaven"

So really, its all a hunt to gain control of money so that others may not become as powerful and the drugs is just the reasoning, as is oil, gas, gold and other things of "value".

They have something called " civil forfeiture law" that allows them to basically rob anyone (seize your asset even you're not convicted of any crime)

That is very sad to hear. There was once a time where the people decided who ran a country and if they were not happy they would overtake such powers. They take the money on behalf of a country, yet the people receive 0% benefits from it even though their taxes/expenses pay for the people who go after these people.

Thank you for clearing that for me. Cheers!

oh I am sure there are lots of drug busts that didn't involve that much money, but really usually when they find huge amount of drugs, they also find huge amounts of cash. 

And really, what do you expect them to do with the drugs?  Sell them?  So of course the burn it.

And really, what do you expect them to do with the money?  Just give it back to the people they are arresting?  If that is the policy, it encourages people to actually break the law. 

Look, I think it is stupid that they are raiding people and arresting them and taking their money away.  I want to see that changed.  But really it isn't just a scam to get lots of free money.  Those DEA agents really believe they are doing good by taking the drugs off the street. 

[Flashman]

Moral of the story, if you notice your neighbour seems to employ a lot of strange looking "armed guards", don't ask him to keep your tax refuge valuables in his basement.

Why not? I'd think that armed guards are actually a good thing. But maybe it would be better if they were not so easily noticed.

Well the implication was they were not official armed guards, but thugs, mooks, mobsters, i.e. the neighbor an organised crime kingpin, ergo, WHEN the police raid you're SOL for getting your stuff back.

[Dabs]

Moral of the story, if you notice your neighbour seems to employ a lot of strange looking "armed guards", don't ask him to keep your tax refuge valuables in his basement.

Why not? I'd think that armed guards are actually a good thing. But maybe it would be better if they were not so easily noticed.

Well the implication was they were not official armed guards, but thugs, mooks, mobsters, i.e. the neighbor an organised crime kingpin, ergo, WHEN the police raid you're SOL for getting your stuff back.

Usually, organized crime have police in their payroll. If not, that isn't very organized or is small fries. Or they might have insiders who will tip them about the raid that is going to happen, before it happens, so the big boss is no longer there. Just the poor unfortunate fall guys, who will probably duke it out fighting against the police and die in blazing glory. Suicide by cop.

[allthingsluxury]

Now that's a lot of BTC! 

[Eisenhower34]

I doubt one person will buy them all for market price again.  The last guy got burnt and has like 1/3 of his money. 

That said, these auctions are actually good for the ecosystem I think.  It gives some big players a change to dip into the Bitcoin coin system.  There are some super rich people that can't be bothered with buying a few Bitcoins at a time.  This is an easy way for them to pick up 10 million worth of Bitcoin at once and not stress about it. 

It is rumored that Draper is going to bid for the coins being sold in this auction as well. Also IIRC bitcoin was trading around $650 when the USMS announced that one person won the all of the coins in the auction and bitcoin is now trading at around $380 so he lost closer to 40% then 2/3 of his money. It is also not known how much of a discount he got from his winning bid.

I don't think he will bid on all of the lots this time around as the price has generally been falling recently and he could have instead have been buying on an exchange during the recent "slow motion" crash

[illymoka]

I must have missed this, but how did the FBI get to Ross's bitcoins?  Did he voluntarily give them up?

The FBI has a lot of $5 wrenches.

or it could be a $ 0.05 plastic bag put on his head to make him suffocate.

[Flashman]

It is rumored that Draper is going to bid for the coins being sold in this auction as well. Also IIRC bitcoin was trading around $650 when the USMS announced that one person won the all of the coins in the auction and bitcoin is now trading at around $380 so he lost closer to 40% then 2/3 of his money. It is also not known how much of a discount he got from his winning bid.

He ain't lost anything if he hasn't sold. What I heard is that he actually paid a bit over market for them. Considering that he could have paid a lot over market with even splitting it to 500btc orders, I think it was a theoretical win.

[Febo]

What noobs are they.
I am sure in few years time someone will get found guilty of bad managing of public founds.

[Flashman]

What noobs are they.
I am sure in few years time someone will get found guilty of bad managing of public founds.

I don't think they can be, if it's auctioned. IF they said $500 BTC each for them, first come first served.... then even though market was ~400, then they might be accused of it, when it's 1000+ a couple of years down the road. But auction avoids that methinks.

[jyakulis]

bah....noobs...they shoulda went long on those.

[Flashman]

Though FUD if they hodl, FUD if they sell, ain't nobody gonna be happy.

[NEM minnow]

I doubt one person will buy them all for market price again.  The last guy got burnt and has like 1/3 of his money. 

That said, these auctions are actually good for the ecosystem I think.  It gives some big players a change to dip into the Bitcoin coin system.  There are some super rich people that can't be bothered with buying a few Bitcoins at a time.  This is an easy way for them to pick up 10 million worth of Bitcoin at once and not stress about it. 

It is rumored that Draper is going to bid for the coins being sold in this auction as well. Also IIRC bitcoin was trading around $650 when the USMS announced that one person won the all of the coins in the auction and bitcoin is now trading at around $380 so he lost closer to 40% then 2/3 of his money. It is also not known how much of a discount he got from his winning bid.

I don't think he will bid on all of the lots this time around as the price has generally been falling recently and he could have instead have been buying on an exchange during the recent "slow motion" crash

I meant to say lost like 1/3 of his money.  My brain must have been foggy.  You are right on the numbers. 

I also didn't know that Draper might have got different prices on different lots. 

If he does go at this lot again, that will definitely make a lot of people take notice.

[minerpumpkin]

Well, Draper could just go ahead and severely lower the median price he paid for his Bitcoins If you really believe in Bitcoin and want to acquire a huge amount in a safe and legal way, this is the perfect opportunity. I'd be surprised if they sell below (marketValue - ~5% or so)

[Eisenhower34]

I doubt one person will buy them all for market price again.  The last guy got burnt and has like 1/3 of his money. 

That said, these auctions are actually good for the ecosystem I think.  It gives some big players a change to dip into the Bitcoin coin system.  There are some super rich people that can't be bothered with buying a few Bitcoins at a time.  This is an easy way for them to pick up 10 million worth of Bitcoin at once and not stress about it. 

It is rumored that Draper is going to bid for the coins being sold in this auction as well. Also IIRC bitcoin was trading around $650 when the USMS announced that one person won the all of the coins in the auction and bitcoin is now trading at around $380 so he lost closer to 40% then 2/3 of his money. It is also not known how much of a discount he got from his winning bid.

I don't think he will bid on all of the lots this time around as the price has generally been falling recently and he could have instead have been buying on an exchange during the recent "slow motion" crash

I meant to say lost like 1/3 of his money.  My brain must have been foggy.  You are right on the numbers. 

I also didn't know that Draper might have got different prices on different lots. 

If he does go at this lot again, that will definitely make a lot of people take notice.

Well he said that he intends to create some kind of company that will make bitcoin accessible to people in third world countries where bitcoin has traditionally not been accessible. IMO this likely means that he will operate some kind of exchange (maybe like coinbase but for third world countries). I would think that he intends to sell the coins at some kind of markup (and/or have a largish spread between the buy and sell price) and does not want to have his cost basis be public so he can avoid any kind of public outcry over profiting from selling his coins to people in third world countries at a large profit.

I agree that people will certainly notice if he does win any of the coins in this auction and it would probably start a number of rumors. 

[pitham1]

Draper might try to average out his holdings, after buying high last time. 

[LiteCoinGuy]

I doubt one person will buy them all for market price again.  The last guy got burnt and has like 1/3 of his money. 

the last guy was Tim Draper and he understands bitcoin and doesnt care about a price of 500 USD or 1000 USD because he understands the true potential. you do not 

[scarsbergholden]

Well, Draper could just go ahead and severely lower the median price he paid for his Bitcoins If you really believe in Bitcoin and want to acquire a huge amount in a safe and legal way, this is the perfect opportunity. I'd be surprised if they sell below (marketValue - ~5% or so)

Do you have any actual information as to what the bitcoin sold at from the last auction? (or is this just pure speculation)?

I would say that sales of large blocks when the sale must be done in large blocks would generally result in lower prices because smaller buyers cannot buy small chunks of the block which would help prop up the price