Why didn't the government leave Silk Road open...

[Bizmark13]

...to allow people to withdraw their coins?

Once the government identified Ross Ulbricht and had control of the Silk Road servers, why didn't they keep the site open so that people could withdraw their bitcoins? They could have blocked the ability to trade (so as to not facilitate any drug deals) and instead only allow people to log onto their accounts at the site and withdraw their funds to their own Bitcoin addresses.

This is the part I'm talking about:

Funds held by users of the site, however, were not so well-protected. Before completing transactions on the Silk Road, users would load Bitcoins into an escrow account on the site. The agreed upon coins would only be transferred to the seller’s private wallet once the buyer had verified delivery of the goods. When the feds took over the Silk Road, there were over 26,000 Bitcoins in user accounts that were relatively easy to snatch up.

The FBI has transferred all 26,000-plus seized Bitcoins to its own personal wallet, but because Bitcoin transactions are tracked publicly, it didn’t take the internet long to find the FBI’s wallet address. Users have taken to transferring tiny fractions of a Bitcoin to the FBI with public comments attached decrying the war on drugs and the arrest of Ulbricht. Users have even helpfully tagged the wallet address as “Silkroad Seized Coins.” You can check out the comments as they come in by watching the blockchain for the FBI’s wallet.

Link: http://www.extremetech.com/computing/168139-fbi-unable-to-seize-600000-bitcoins-from-silk-road-operator

[futureofbitcoin]

... because buying and selling illegal stuff is illegal??? ... Those criminals are lucky they're not caught and put in jail. Or executed in another country.

[hua_hui]

Because the officials will say the bitcoin is involved in the ilegal trades and will be confiscated. I think no users will publicly claim the stuck fund from FBI or made some complain with the high risk of exposing their identity!

[Bizmark13]

OK, but those coins don't actually belong to the Government though. They belong to the users of Silk Road. If I bought some drugs and gave the dealer $5 and was caught, that $5 note as well as the wallet in my pocket that contains a few more dollar bills, some credit cards, my drivers license, etc. is still mine, is it not?

Also not all of the trading that was going on was illegal:

There were also legal goods and services for sale, such as apparel, art, books, cigarettes, erotica, jewellery, and writing services.

Link: http://en.wikipedia.org/wiki/Silk_Road_%28marketplace%29

[Natalia_AnatolioPAMM]

thanks god they didn't close bitcoin generally. in russia they wanna do it and drugs are the main reason

[pitham1]

...to allow people to withdraw their coins?

Once the government identified Ross Ulbricht and had control of the Silk Road servers, why didn't they keep the site open so that people could withdraw their bitcoins? They could have blocked the ability to trade (so as to not facilitate any drug deals) and instead only allow people to log onto their accounts at the site and withdraw their funds to their own Bitcoin addresses.

Funds used in criminal activity... why on earth would the US government allow criminals to take them back?

[calme]

Perhaps they should consider running a decentralized Silk Road with taxpayer money in order to keep bullets from flying around in the streets.

[pitham1]

Perhaps they should consider running a decentralized Silk Road with taxpayer money in order to keep bullets from flying around in the streets.

Legalizing drugs would be an easier solution.

[calme]

Perhaps they should consider running a decentralized Silk Road with taxpayer money in order to keep bullets from flying around in the streets.

Legalizing drugs would be an easier solution.

[franky1]

the reason is that you handed funds to a known blackmarket, so dont expect a refund.

lesson to learn, stick to legitimate product websites in future

[Bizmark13]

thanks god they didn't close bitcoin generally. in russia they wanna do it and drugs are the main reason

I don't think Bitcoin is something that can really be "closed". Although I gotta admit the fact that they chose to auction the coins instead of destroying them did give Bitcoin a certain sense of legitimacy.

...to allow people to withdraw their coins?

Once the government identified Ross Ulbricht and had control of the Silk Road servers, why didn't they keep the site open so that people could withdraw their bitcoins? They could have blocked the ability to trade (so as to not facilitate any drug deals) and instead only allow people to log onto their accounts at the site and withdraw their funds to their own Bitcoin addresses.

Funds used in criminal activity... why on earth would the US government allow criminals to take them back?

As I said before, not all of it was criminal. And I don't think people who were simply buying small amounts of drugs for personal use should have their funds confiscated - although I understand that's probably more of a personal moral opinion on my part.

Perhaps they should consider running a decentralized Silk Road with taxpayer money in order to keep bullets from flying around in the streets.

I posted a thread a while ago about decentralizing websites. It would work well for sites that regularly prune their content (e.g. online auction sites, imageboards, torrent lists) as well as sites that have low bandwidth and storage requirements (e.g. microblogs). A decentralized Silk Road would be perfect and definitely worthy of implementation. Unfortunately, my programming skills are nowhere near good enough to do it myself and not many other people seem interested in the idea.

the reason is that you handed funds to a known blackmarket, so dont expect a refund.

lesson to learn, stick to legitimate product websites in future

I never actually used Silk Road myself. And besides, I only really got into Bitcoin a few months after it was seized anyway.

[Ludi]

...to allow people to withdraw their coins?

Once the government identified Ross Ulbricht and had control of the Silk Road servers, why didn't they keep the site open so that people could withdraw their bitcoins? They could have blocked the ability to trade (so as to not facilitate any drug deals) and instead only allow people to log onto their accounts at the site and withdraw their funds to their own Bitcoin addresses.

How would they 'let' them do that? Surely they'd have to make an announcement and obviously that's not really possible without giving the game away. Besides, they likely saw all the money there as confiscatable seeing as it was being used for illegal activities so wasn't in their interest do do what you propose.

[Balls]

OK, but those coins don't actually belong to the Government though. They belong to the users of Silk Road. If I bought some drugs and gave the dealer $5 and was caught, that $5 note as well as the wallet in my pocket that contains a few more dollar bills, some credit cards, my drivers license, etc. is still mine, is it not?

No. It's the dealers money but seeing as he was caught with it it would likely be confiscated as profits of crime. The police obviously don't let criminals keep the money they make from illegal activities.

thanks god they didn't close bitcoin generally. in russia they wanna do it and drugs are the main reason

How would they close it 'generally'? And even if they did they would never be able to stop its use on the deep/darkweb. Banning bitcoin would just push it underground.

Perhaps they should consider running a decentralized Silk Road with taxpayer money in order to keep bullets from flying around in the streets.

Legalizing drugs would be an easier solution.

It would be, but the powers that be don't see it that way for several reasons. There's money to be made by keeping the war on drugs running, though any intelligent person knows you could end the war overnight by legalizing drugs. The cartels would have no power at all then.

[Lauda]

Why do you think that the government would help people? That is nonsense that many believe. The government doesn't work for the people, they just act like they do.
Why would they take less money for themselves than they could? Actually, why would anyone take $5 out of the stash instead of taking the whole stash of $50?

[fathur01]

By seizing the Silk road's coins, the government pocketed a lot of money from the eventual sale.

[deodecagone]

... they have been confiscated. Wording matters. You are free to claim your bitcoin back and expose your identify and activity within silkroad to the FBI.
You probably aren't going to do that. End of the useless discussion.

[redsn0w]

No one will denounce to the police station that the FBI seized his own bitcoin, are you serious  ? The blocked the site and all the operation because for their "rules" is illegal to sell drugs, weapon, etc...

[calme]

A decentralized Silk Road would be perfect and definitely worthy of implementation.

Agreed. It would make good business sense for one to begin working on such a site, keeping recent events in mind. And even if the U.S. legalizes all drugs, a decentralized exchange could still serve people from other countries. Also, even U.S. people could simply continue selling drugs on decentralized exchanges, rather than having to open storefronts or some unknown websites. The U.S. won't legalize all drugs anytime soon though, and the closest thing to it would probably be not outlawing nanotech-induced neurotransmitter manipulation.

Which money did the U.S. government steal exactly? Was it BTC that was placed in an escrow-like fashion for drugs that were awaiting delivery? Or was it simply BTC that potential customers were storing on the site for whatever reason? That is a huge distinction. In one case they are simply stealing from people who choose to do as they wish with their own bodies. But in the other case, it's literally guilty until proven innocent.

[Lauda]

A decentralized Silk Road would be perfect and definitely worthy of implementation.

Agreed. It would make good business sense for one to begin working on such a site, keeping recent events in mind. And even if the U.S. legalizes all drugs, a decentralized exchange could still serve people from other countries. Also, even U.S. people could simply continue selling drugs on decentralized exchanges, rather than having to open storefronts or some unknown websites. The U.S. won't legalize all drugs anytime soon though, and the closest thing to it would probably be not outlawing nanotech-induced neurotransmitter manipulation.

Which money did the U.S. government steal exactly? Was it BTC that was placed in an escrow-like fashion for drugs that were awaiting delivery? Or was it simply BTC that potential customers were storing on the site for whatever reason? That is a huge distinction. In one case they are simply stealing from people who choose to do as they wish with their own bodies. But in the other case, it's literally guilty until proven innocent.

Well this is actually expected. As a decentralized market for Bitcoin gets finalized (there are some in the works like OpenBazaar), illegal ones are sure to follow. As long as the market is open source or easily adjustable someone will make a (first) decentralized Silk Road or something similar. There is nothing stopping them.

Looks like they've taken everything that was on the website. This includes funds help by people on it I assume.

[calme]

... they have been confiscated. Wording matters. You are free to claim your bitcoin back and expose your identify and activity within silkroad to the FBI.
You probably aren't going to do that. End of the useless discussion.

They knew good and well that they'd end up keeping the money if they did it like that.