FBI Seized 144,000 Bitcoins ($28.5 Million) From Silk Road Bust 162
SonicSpike writes "An FBI official notes that the bureau has located and seized a collection of 144,000 bitcoins, the largest seizure of that cryptocurrency ever, worth close to $28.5 million at current exchange rates. It believes that the stash belonged to Ross Ulbricht, the 29-year-old who allegedly created and managed the Silk Road, the popular anonymous drug-selling site that was taken offline by the Department of Justice after Ulbricht was arrested earlier this month and charged with engaging in a drug trafficking and money laundering conspiracy as well as computer hacking and attempted murder-for-hire. The FBI official wouldn't say how the agency had determined that the Bitcoin 'wallet' — a collection of Bitcoins at a single address in the Bitcoin network — belonged to Ulbricht, but it was sure they were his. 'This is his wallet,' said the FBI official. 'We seized this from DPR,' the official added, referring to the pseudonym 'the Dread Pirate Roberts,' which prosecutors say Ulbricht allegedly used while running the Silk Road."
Re:Well (Score:5, Informative)
Why convert them to cash? They can't freeze the account as they could with a bank, but if they have the account credentials they can simply transfer all the bitcoins to a new holding account to which they have the only credentials.
Re:Here is my question.... (Score:5, Informative)
Your bitcoins aren't in your "wallet" file - they're in an account in the bitcoin block chain "bank". The file simply contains your credentials to be able to transfer those coins. You can back up those credentials, in fact it's strongly recommended since if you lose them (say to a hard drive crash) the coins in the account become permanently unspendable. And anybody with a copy of those credentials can indeed spend the money in the account. I would imagine though that a seizure involves gaining access to the credentials and transferring those bitcoins into an exclusively FBI controlled account to avoid just such a scenario.
By the same token, if you securely encrypt your credentials and refuse to give them the key despite any threats they may bring, they can't meaningfully seize those assets. Of course that "sharing" may come involuntarily via surveillance software surreptitiously installed on your computer.
Re:Well (Score:5, Informative)
...but if they have the account credentials they can simply transfer all the bitcoins to a new holding account to which they have the only credentials.
Which is exactly what the article suggests they've done:
"The FBI official pointed me towards this Bitcoin address, which according to the public Bitcoin transaction record known as the “blockchain” received transfers of close to 144,000 in just the last 24 hours. “They finished moving them at 3am this morning,” said the official."
Re:Was the FBI's seizure illegal? (Score:2, Informative)
Here is one of the transactions. [blockchain.info]
You can see that the fee paid was 0.
You can see their account here. [blockchain.info]
Why speculate when the evidence is all public and easy to find?