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Author Topic: BurtW arrested (update: charges dropped!)  (Read 74654 times)
MegaFall
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April 04, 2015, 06:36:26 PM
 #481

If you are selling bitcoins on LBC, even only part-time, you absolutely *must* get registered as an MSB and implement AML / KYC policies.

Yeah and the problem with that is we all have money like this laying around right?:

It doesn't cost any money to get registered with FINCEN.

Depending on your state you may not need a state licensure. Getting registered with FINCEN and implementing an effective AML / KYC policy is not particularly expensive, if you do it yourself, but it may be time consuming.

If you pay a compliance company to do your AML / KYC policy for you, it may cost a grand or so. But, you can also do it yourself, if you want to invest some time into research, effectively accomplishing it for free.

I am just giving advice to keep any future would-be BTC sellers from having all their assets seized by the feds incase they decide to go after you like they did Burt.

FINCEN does give a 6 month grace period before you are required to register, it says so on their website. But if you are selling BTC long term and doing any somewhat significant volume of local transactions you should probably register as an MSB and follow AML / KYC policies. Unless you want to take the risk. It's up to you.

I'm just saying, if you are doing really low volume, it probably won't matter. But if one day they decide to prosecute BTC sellers in your state like they have in FL and CO, this could very well happen to anyone. But you can prevent it by being registered as an MSB with FINCEN (which is free) and implementing an AML / KYC policy. For your AML policy, you probably won't be able to do transactions over 3k unless they provide ID and proof of residence. It would probably be a good idea not to do any transactions over 3k, period.

If they mention using the BTC for anything illegal, it's a good idea to assume the customer is an undercover federal agent and you must terminate the transaction immediately.


Yeah... Doesn't matter to me any more. I'm moving to New Zealand. I'm done with this hell hole of a country.
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April 04, 2015, 06:43:34 PM
 #482

If you are selling bitcoins on LBC, even only part-time, you absolutely *must* get registered as an MSB and implement AML / KYC policies.

Um, sorry, "no" - please see my last post, above... and/or please ENUMERATE exactly and *precisely* what this "Hey Just Get A License" non-argument response, SPECIFICALLY *Means*...?

What's the "license" exactly?
What does it cost?
Where are the exact forms to fill out?
With *exactly* WHAT agency, where?
Of the Fed or State (or even local) government?

LOOK, unless and until *somebody* around here can specifically and EXACTLY do this, in some detail, I personally don't wanna even HEAR one more instance of this goddamn stupid "Hey Just Get A License, Man" argument response.

Puh-leeze.

That ain't hardly what ANY of this is about. Wake Up.

KEVLARR

P.S. Just posted this and *then* saw your post above... my point stands, i.e. it's not about the Federal FinCEN paperwork, based on what I wrote above and Burt's case involving LOCAL STATE LAWS, this "Get A License" answer is IMHO still an insufficient non-answer...
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April 04, 2015, 06:45:09 PM
 #483

My favorite part of reading about civil asset forfeiture has got to be the case names.  You just can't read or better yet say out loud:

"United States v. $405,089.23"

without a slight smile on your face (through the tears of course).  Try it.

https://www.fed-soc.org/publications/detail/supreme-court-rules-that-civil-forfeiture-is-not-punishment-for-double-jeopardy-purposes


Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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April 04, 2015, 06:47:28 PM
 #484

I'm just saying, if you are doing really low volume, it probably won't matter. But if one day they decide to prosecute BTC sellers in your state like they have in FL and CO, this could very well happen to anyone. But you can prevent it by being registered as an MSB with FINCEN (which is free) and implementing an AML / KYC policy. For your AML policy, you probably won't be able to do transactions over 3k unless they provide ID and proof of residence. It would probably be a good idea not to do any transactions over 3k, period.

If they mention using the BTC for anything illegal, it's a good idea to assume the customer is an undercover federal agent and you must terminate the transaction immediately.
I have heard it said that free legal advice is worth exactly what you pay for it.

Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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April 04, 2015, 07:16:20 PM
 #485

In this corner:  A guy who has had to hire five different law firms, still has the better ones on retainer - including a law firm that specializes in and has handled actual civil asset forfeiture cases for many years - and has paid almost $200,000 in legal fees.  A guy who is living this.

And in the other corner:  Quickseller, a guy with a humble opinion.

IMO civil forfeiture need to be addressed at a federal level, not a local one.
Let's see where would you start?  The executive branch that makes billions of extra dollars from this?  The do nothing but what their corporate masters want them to do Congressional branch?  Or your best idea yet: the "fox guarding the hen house" Judicial branch who also directly profits from this practice?
It should be at a congressional level. (even though I believe the practice to be unconstitutional, I think a constitutional amendment would be in order prohibiting civil forfeiture except in cases when a person has been convicted of a crime, and it can be proven that the assets being seized were acquired as a result of the specific crime the person committed - for example if someone robs a bank and steals $20,000 in cash and then goes out and buys a $20,000 car two days later, and is later convicted of robbing the bank then the car can be seized -- this constitutional amendment would prevent any kind of ambiguity).

I do agree that addressing this at a federal/constitutional level would no doubt be a very high bar to reach, however doing so would stop civil forfeiture across the entire country. Addressing it at a local level means having to go through the same process 50 times for each of the 50 states, plus thousands more at the city/local level. Did you get the law changed in the town you work in? If so, then great, but what happens when you work in a neighboring town where the law still allows equitable sharing?
I would not doubt that there will eventually be a supreme court case ruling civil forfeiture unconstitutional in the future,

"Take it to the supreme court by God!".  Just two of the many, many, times this has already been done that I found in quick search:
http://www.slate.com/articles/news_and_politics/jurisprudence/2014/02/kaley_v_united_states_terrible_supreme_court_decision_lets_the_government.html
http://www.businessinsider.com/supreme-court-ruling-on-civil-forfeiture-2014-11
Quote
Fifth Amendment's stipulation that you can't "be deprived of life, liberty, or property, without due process of law."

The Supreme Court has ruled otherwise. That court has issued a number of rulings upholding civil forfeiture, including one in 1996 that said seizure of an innocent person's property didn't violate due process. In that case, a Michigan woman named Tina Bennis fought the seizure of her car after her husband was caught having sex with a prostitute in it.
I also saw those cases. I am not sure of the exact details of these cases, however I do not agree with the court's legal conclusion. The court now has different justices then it did on each of those cases. Those cases is also why I think a constitutional amendment is in order to prevent law enforcement from finding loopholes in case law.

however the fact that, in the 81% of cases when no crime is charged, the government will usually return the property when the forfeiture is disputed,
Even if true (where is your source) this would mean that in 20%, oops sorry 19%, of the cases where the seizure is disputed the government keeps the property anyway, right?
source - however I was actually incorrect, it is 41%, not 81% - either way your point is still valid - it would be valid even if the percentage is 100% because people still need to bear the expense of disputing the forfeiture and often do not receive everything back from the government (they settle for less then 100%).
Quote
But in 41 percent of cases — 4,455 — where there was a challenge, the government agreed to return money. The appeals process took more than a year in 40 percent of those cases and often required owners of the cash to sign agreements not to sue police over the seizures.
I understand that most of the time that the government returns money to it's rightful owner that they only give back some percentage (I think I remember reading this most likely in the WSJ, however I do not currently have a source and may be incorrect on this) of the funds. In the 59% (or 19%, or whatever too high of a percentage) of the other cases, the courts must decide (I do not have stats on how often people win these cases).

The point that I was trying to make is that there are not a lot of opportunities for the court system to hear these kinds of cases.

Another important fact is (source):
Quote
While other metropolitan areas get most of their civil forfeiture assets through a smaller number of big-dollar seizures, Philadelphia hauls in the dough through thousands of small-dollar seizures. In 2010 the city filed some 8,000 forfeiture cases with an average take of $550.
It looks like that some jurisdictions target smallish seizures in order to make it not worthwhile to try to fight in court - $500 may not be very much to a single person, however $500 thousands of times really adds up to a lot of money.
 
 Let me tell you what actual attorneys that deals with this shit all the time actually told me:

If I am totally acquitted of all criminal charges the government will probably drop the civil asset forfeiture suit (which is a totally separate case from the criminal case).  However, due to the supreme court you put your trust in rulings, they can pursue the civil asset forfeiture case even in light of a total acquittal of all criminal charges.  How can this be?  Because in the criminal case I am I trial but in the civil case I am not on trial, the seized property is on trial.  Also, while you are getting a source for your 81% figure please also find out how many of those people that "won" got all of their seized property back.
I believe this. There really are no checks and balances to prevent this kind of abuse.

I don't think very many people that "won" got all their money back, I imagine that very few (I guesstimate close to 0) got all their money back, and after accounting for legal costs it is probably even lower. I hope that my previous post does not come across as advocating for civil forfeiture, because that is not my stance.
along with the fact that challenging such laws are very expensive
No shit Sherlock.  Now what you might not know, not having this happen to you, is that the prosecutors in these cases will drag them out as long as they possibly can in the hopes of totally bankrupting the victim through their attorney's fees.
There becomes a point where it is no longer economical to continue to pursue a case to get your money back. This is just another reason why the appellate and supreme court does not hear more of these cases.
and suits would need to be brought by people who, by definition have a lot to lose by not settling (the government often makes settlement offers when suits are filed) and do not have a lot left means that few people are going to have standing to petition the supreme court to hear their case.
and who know they will lose anyway, just like all of those before them.
I don't think everyone who challenges a civil forfeiture suit in court looses. If you can present credible information saying this is true, then I would seriously lose faith in our court system and our country.
 
The Washington Post published an in depth article late last year about civil forfeiture (I believe the linked article is the one, but they have written about it several times) which has since caused a lot of public debate about the issue. The Wall Street Journal has also published a number of articles critical of civil forfeiture. This is interesting because the Post is traditionally a very liberal publication while the WSJ is a very conservative publication.
cool
This shows that the opposition is bipartisan.
I would not be surprised if the issue of civil forfeiture is a major issue in the 2016 (US) election.
That would be nice, not holding my breath.

I had never even heard of civil forfeiture before the Washington Post had published it's story about how much money governments are making from it and how much it is abused. I imaging that the same is true for a lot of people. I think there has been more public debate over the use of civil forfeiture over the last several months, and I really have not heard many people arguing to keep it in place.
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April 04, 2015, 07:18:57 PM
 #486

My favorite part of reading about civil asset forfeiture has got to be the case names.  You just can't read or better yet say out loud:

"United States v. $405,089.23"

without a slight smile on your face (through the tears of course).  Try it.

https://www.fed-soc.org/publications/detail/supreme-court-rules-that-civil-forfeiture-is-not-punishment-for-double-jeopardy-purposes



That would be awesomely hilarious if were not so sad.Our government believes that ownership of property is only subject to their whims. People like us deisre to actually own our currency and they prosecute us for essentially exercising what should be part of our inalienable rights. I wish all the best for you and your family Burt.

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April 04, 2015, 07:26:19 PM
 #487

I'm just saying, if you are doing really low volume, it probably won't matter. But if one day they decide to prosecute BTC sellers in your state like they have in FL and CO, this could very well happen to anyone. But you can prevent it by being registered as an MSB with FINCEN (which is free) and implementing an AML / KYC policy. For your AML policy, you probably won't be able to do transactions over 3k unless they provide ID and proof of residence. It would probably be a good idea not to do any transactions over 3k, period.

If they mention using the BTC for anything illegal, it's a good idea to assume the customer is an undercover federal agent and you must terminate the transaction immediately.
I have heard it said that free legal advice is worth exactly what you pay for it.

Well Burt, I'm just going off what I have learned in my personal time selling BTC. In fact, I'm just repeating what many other seasoned traders have said already, and what the company I used to work for has told me.

There are sellers who process millions of $ worth of BTC transactions through their bank accounts, have been investigated by the FBI, and cleared. They are all registered with FINCEN and implement AML / KYC policy.

The feds can, theoretically, arrest anyone who sells BTC without being registered as an MSB. I hold no illusions that they can pretty much do whatever they want if they feel like it. It happened to you, it could happen to anyone.  And I know full well what their motivations are (greed, among other things.)

I was just stating the obvious that it is possible to mitigate (but not necessarily completely eliminate) your risk by following certain guidelines. Hopefully, it will be helpful to someone. They will figure this out on their own anyway.

That being said, I very much hope you prevail in your fight against government over-reach. I truly wish you the best of luck.
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April 04, 2015, 08:13:29 PM
 #488

Quickseller:

Your idea of a constitutional amendment is a good one and is an avenue that I had not though of.  Thanks.

One thing to clear up:

I think a constitutional amendment would be in order prohibiting civil forfeiture except in cases when a person has been convicted of a crime, and it can be proven that the assets being seized were acquired as a result of the specific crime the person committed - for example if someone robs a bank and steals $20,000 in cash and then goes out and buys a $20,000 car two days later, and is later convicted of robbing the bank then the car can be seized
You exactly describe the distinction between a criminal asset forfeiture which is the "that makes sense" to the average not in law enforcement person kind of forfeiture and civil asset forfeiture which is the "WTF?" no need to go to all the trouble of actually convicting anyone of a crime at all kind of forfeiture we are talking about.  So to be concise:

We both believe that most reasonable people would support a constitutional amendment to end all forms of civil asset forfeiture while leaving criminal asset forfeiture intact as a way to punish those that are convicted of certain crimes and/or as a way to get money back to the victims of these crimes.

Thanks for your great posts.

Our family was terrorized by Homeland Security.  Read all about it here:  http://www.jmwagner.com/ and http://www.burtw.com/  Any donations to help us recover from the $300,000 in legal fees and forced donations to the Federal Asset Forfeiture slush fund are greatly appreciated!
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April 04, 2015, 09:09:27 PM
 #489

Last Week Tonight with John Oliver: Civil Forfeiture (HBO)

So fuckin' funny, yet so fuckin' sad. 9 days later after that video was uploaded on YouTube, this: http://www.jmwagner.com/
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April 04, 2015, 09:19:11 PM
 #490

Quickseller:

Your idea of a constitutional amendment is a good one and is an avenue that I had not though of.  Thanks.

One thing to clear up:

I think a constitutional amendment would be in order prohibiting civil forfeiture except in cases when a person has been convicted of a crime, and it can be proven that the assets being seized were acquired as a result of the specific crime the person committed - for example if someone robs a bank and steals $20,000 in cash and then goes out and buys a $20,000 car two days later, and is later convicted of robbing the bank then the car can be seized
You exactly describe the distinction between a criminal asset forfeiture which is the "that makes sense" to the average not in law enforcement person kind of forfeiture and civil asset forfeiture which is the "WTF?" no need to go to all the trouble of actually convicting anyone of a crime at all kind of forfeiture we are talking about.  So to be concise:

We both believe that most reasonable people would support a constitutional amendment to end all forms of civil asset forfeiture while leaving criminal asset forfeiture intact as a way to punish those that are convicted of certain crimes and/or as a way to get money back to the victims of these crimes.

Thanks for your great posts.
Correct, although I would prefer to shift the burden of proof to be greater then simply the preponderance of the evidence in criminal asset forfeiture cases.

One quote from Cornell law library that I find interesting/comical about civil asset forfeiture is:
Quote
Unlike criminal forfeiture, civil forfeiture proceeds against the property, not the person. In theory, civil actions are remedial, not punitive like criminal proceedings. By acting civilly, the government seeks to remedy a harm, through the fiction of the property's "guilt."
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April 04, 2015, 09:44:45 PM
 #491

Remember:

Under civil forfeiture law, your property is GUILTY until you prove it innocent!!

If Mugabe tried this in Zimbabwe we would fall around laughing at them.   

Its like the old witch hunters putting the witches cat on trial as well.  They are applying medieval jurisprudence to 21st century problems.

We must make money worse as a commodity if we wish to make it better as a medium of exchange
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April 04, 2015, 10:12:55 PM
 #492

Last Week Tonight with John Oliver: Civil Forfeiture (HBO)

So fuckin' funny, yet so fuckin' sad. 9 days later after that video was uploaded on YouTube, this: http://www.jmwagner.com/
Most of the examples in his segment would not have happened had people not been ignorant about their rights. It appears that most of the examples generally started as a "routine" traffic stop, then people would answer questions that the answers to are none of the police officer's business. Then to top that off, they consented to searches that the police had no right* to conduct (*by consenting the police were given such right).

If those people knew their rights well enough not to answer questions when a police officer asks if they have money in their car, and to not to consent to a search then the police would never had even known about the money that they stole, let alone seize it.

I am a taxpaying (which is rare under the Obama administration), law abiding citizen with nothing to hide, however when I am asked questions by the police (other then those pertaining to my identity), then I tell them whose business it is not. When I am asked if my property can be searched, I tell them that I do not consent and that they will need a warrant if they want to search my property.

Looking back, I believe I was probably the victim of a police officer who tried to abuse civil forfeiture laws against me. In mid 2009, while I was driving to work I was stopped because the police officer thought I was speeding (~7 MPH over the speed limit). When he first approached my car, one of the first things he asked me was if I had any drugs or weapons in my car - pause for a minute, at the time I was only ~2-3 years out of high school, with no criminal record, never suspected of a crime, not even a conviction for speeding yet he somehow concluded that question might result in a positive answer. He later took my drivers license back to his police car, wrote me a ticket, gave me back my license and the ticket, then confirmed my previous response about drugs and weapons and asked to search my car. I told him I would not consent, he asked why, I told him I don't need a reason and that he would need a warrant, he agreed that I don't need a reason, but said that if I have nothing to hide then I might as well let him search my car, I cited the fourth amendment, he said that I might as well either give him a reason or let him search my car, I told him I do not consent, he asked again, I simply repeated that I do not consent, then he let me go. At the time I thought that he was trying to get me to say that I did not have time (hence get me to admit to the speeding), however looking back I would say that it is safe to speculate that he was hoping to find a slushee machine in my trunk.
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April 04, 2015, 10:26:26 PM
 #493

Most of the examples in his segment would not have happened had people not been ignorant about their rights.

Thats a bit hard on people generally. The cops have been trained specifically on techniques to get you to unwittingly waive your rights.

Your experience was probably exceptional, as there are many cases of people who refused the search, and were forced to wait for hours while K-9 units arrived on the scene. Most people would give in before that happened, thinking that the constitution would protect them.

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April 04, 2015, 10:29:27 PM
 #494

Most of the examples in his segment would not have happened had people not been ignorant about their rights.

Thats a bit hard on people generally. The cops have been trained specifically on techniques to get you to unwittingly waive your rights.

You're experience was probably exceptional, as there are many cases of people who refused the search, and were forced to wait for hours while K-9 units arrived on the scene. Most people would give in before that happened, thinking that the constitution would protect them.
If you ask if you are free to go, and they do not have probable cause to continue to detain you then they have to let you go. https://www.youtube.com/watch?v=2d7-0TDsxnw
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April 04, 2015, 10:36:32 PM
 #495

Aside (from the above): I wonder if the purpose of placing Burt in the fed pen for a couple days was their way of extracting from him some private keys

Or perhaps to make sure he did not have a chance to move any bitcoins, or give someone the keys to do so.

EDIT: I see that it was the reasons indeed, according to his wife.

Academic interest in bitcoin only. Not owner, not trader, very skeptical of its longterm success.
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April 05, 2015, 08:32:28 AM
 #496

May I ask you BurtW?Have you given all of your BTC to police?If yes why?They can't prove whether you had 1BTC or 1000BTC?You could have gave them one private key which contained 1BTC but it had many ingoing and outgoing transaction of large sums of BTC and you could have claimed that this is all of your BTC.How would they prove that you had more?

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April 05, 2015, 08:35:24 AM
 #497

May I ask you BurtW?Have you given all of your BTC to police?

Do you think he would openly admit it if he did have more?
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April 05, 2015, 08:39:08 AM
 #498

May I ask you BurtW?Have you given all of your BTC to police?

Do you think he would openly admit it if he did have more?

Haha was just going to say this myself. Also, from what I read the police confiscated any computers, usbs and even recordable media they had in the house so they likely have direct access to most of his coins that way. I suppose what is interesting about bitcoin is you could have password-protected back-ups with a friend or family and get them to transfer the coins to a secure wallet if you get into trouble.

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fonenumba
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April 05, 2015, 08:43:35 AM
 #499

May I ask you BurtW?Have you given all of your BTC to police?

Do you think he would openly admit it if he did have more?

Haha was just going to say this myself. Also, from what I read the police confiscated any computers, usbs and even recordable media they had in the house so they likely have direct access to most of his coins that way. I suppose what is interesting about bitcoin is you could have password-protected back-ups with a friend or family and get them to transfer the coins to a secure wallet if you get into trouble.
It is possible that he had multiple bip-39 wallets with different passphraises, although his wife had testified that the police had stolen over 700 BTC so I would somewhat doubt that he would have more bitcoin secured by a different passphraise.

It would obviously be a horrible idea to publicly admit this either way.
yakuza699
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April 05, 2015, 08:46:48 AM
 #500

Haha was just going to say this myself. Also, from what I read the police confiscated any computers, usbs and even recordable media they had in the house so they likely have direct access to most of his coins that way. I suppose what is interesting about bitcoin is you could have password-protected back-ups with a friend or family and get them to transfer the coins to a secure wallet if you get into trouble.
Well I should have thought of it.Another way would be to print out the private key and hide it somewhere, somewhere that no one would know.Maybe even hide a private key in the blockchain itself.
The police had stolen over 700 BTC
Exactly that word.

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