Ulbricht Admits Seized Bitcoins Are His and Wants Them Back

An anonymous reader writes with the latest news about the aftermath of the Silk Road shutdown "From the article: 'Ulbricht ... said in a notarised December 11 statement that he believes the virtual currency should be returned to him because Bitcoins are "not subject to seizure" by federal law. Ulbricht, 29, now admits the Bitcoin fortune is his — even though he's previously denied any wrongdoing regarding Silk Road and claimed through his lawyer that the feds arrested the wrong guy.' So not only has he now confirmed his link to the site, and confirmed the money is his, but also means that a few precedents will be set. Is it seizable? Is it just 'copying data?'" Relatedly, three alleged moderators of Silk Road were indicted on Friday.

Arrogance

[anagama]

The foolish arrogance of geeks is sometimes astounding.

Re:The master owns everything, including your *LIF

[DaveV1.0]

he believes the virtual currency should be returned to him because Bitcoins are "not subject to seizure" by federal law.

See the bolded part?
Both you and Ulbricht don't get it. What you believe has no bearing on reality.

Ulbricht isn't claiming that the government violated the constitution. He is claiming Bitcoins aren't property and thus can't be seized under federal law. That is for a judge to decide, but lawyers don't think he will prevail because intangible property is still property and federal law allows for the seizure property that are the products, or purchased with the products, of federal criminal acts.

Unless you were at Waco, you don't know what happened at Waco.

Re:The master owns everything, including your *LIF

[Anonymous Coward]

I can bold random words too. It makes my stuff much more important.

There is no federal law that makes it illegal to seize bitcoins. It is an asset just like any other. The fact that it is electronic has nothing to do with it at all

Re:The master owns everything, including your *LIF

[Noryungi]

Yeah, let's tone down the hysteria a notch now, shall we?

Mr Ulbricht admitted to committing a crime, by facilitating the buying and selling of drugs on the Internet. Wrong move, but let us set this aside for a moment.

Bitcoins can be considered (and, indeed, are presented everywhere) as a currency. Hence, they can be considered as an ill-gotten gain.

While I am not a lawyer, I am pretty much certain that every country under the sun has got a law in its books that says, essentially: "Thou shall not profit from illegal activities" or some such.

This is prefectly constitutional, it respects the 4th amendment of the Constitution of the USA, and I am pretty sure it has been challenged many times in front of the Supreme Court, and upheld every time.

Since Bitcoin is a currency, and that said currency has been obtained from an illegal activity, it represents a profit from an illegal activity, and, therefore, can be and should be seized by the Federal Bureau of Investigations, a branch of the Department of Justice of the Government of the United States of America. The same thing would happen if, say, he had been paid in Euros or Yens (or any other currency, really) instead of Bitcoins.

If Mr Ulbricht is cleared of all charges - good luck with that since he pretty much admitted committing or facilitating an illegal activity - then, of course, the Bitcoins he has stashed should be returned to him by the FBI, probably with a little note attached saying: "Sorry! Here is your crypto currency" (again, good luck with that).

Should drug selling and buying be considered legal? Why not, you may have some arguments for the legalisation of drugs (See: Marijuana, legal use of), but, in the mean-time, it remains an illegal activity.

Hence, I believe Mr Ulbricht (a) will never see ''his'' Bitcoins again, (b) is about to learn a thing or two about the US legal process and (c) spend quite a number of years in a Federal Correctional Facility (or Prison). Whis is as it should be, since the guy comes off as a complete amateur.

And, while I agree that the ATF has badly bungled the whole Waco fiasco, I have zero compassion for religious nuts.

Re:Unequal treatment

[anagama]

There is no crown. In the US, the Feds seize first, worry about proof later. Civil forfeiture is big business, "policing for profit":

http://www.ij.org/policing-for-profit-the-abuse-of-civil-asset-forfeiture-4 [ij.org]

Americans are supposed to be innocent until proven guilty, but civil forfeiture turns that principle on its head. With civil forfeiture, your property is guilty until you prove it innocent.

Re:The master owns everything, including your *LIF

[Jherek Carnelian]

Unless you were at Waco, you don't know what happened at Waco.

Bullshit. Even the US government doesn't deny that children were burned to death. They do deny their culpability, but it isn't terribly hard to see that as misdirection.

Even if the footage (which I watched on live TV at the time) of the tank pushing in the walls and the fire starting not to long afterwards was misleading, the government were the ones with all the resources and time necessary to handle the situation in a safer way. They decided that their time was worth more than the risk to the children and that's the best possible light you can put on the government's actions, all other interpretations are much less favorable.

Most don't understand the legal argument

[Zontar_Thing_From_Ve]

Most people who have responded seem to not understand the legal argument here. Yes, this is risky to his case and basically he can't explain how he got the coins without hurting his own case. However, that's not the point. My guess is that he and his attorneys know that he is going to lose in court and go to jail. They are trying a novel argument that likely won't work that the government doesn't have the right to seize the coins no matter how acquired specifically because of their electronic nature. This is basically a low percentage "hail Mary" type play (to use an American football reference - look it up in Wikipedia if you don't understand it) to try to at least get him some income (and get his lawyers paid now) for when he gets out of jail. It's trying to turn the best case scenario into "Yeah, you're going to jail, but you'll still be rich when you get out". The unpleasant alternative is to say nothing, let the government keep the coins, and proceed with his weak defense that probably won't work anyway, in which case he goes to jail for a long time penniless. He's going to jail - the only question is whether this highly unlikely argument to keep the coins actually works and he at least gets to leave prison as a rich man. Anything can happen in a US courtroom, but I don't think this is going to be successful.

Re:Still an idiot

[geekoid]

"The demand is tantamount to the drug lord demanding the feds return the hundred million dollars that could only have come from selling 100 kilos of cocaine many times over."
no, there are many ways to make money. The feds need to prove the money came from selling drugs on the black market.

"He hasn't got any possible legal pretense to justifying having the money"
how do you know? Maybe he made it selling bitcoin high and buying them low.

"No jury in the world is going to buy that this guy made tens of millions of dollars day trading bitcoin without a paper trail."
Unless they have evidence he was doing something illegal, then it shouldn't even be in court.

My post in no way endorses whether or not any crime was committed, only pointing out for a legal prospective you seem to be full of shit.

Re:The master owns everything, including your *LIF

[Jherek Carnelian]

Hundreds of guns, several agents shot and possibly dead. Agreed the ATF was heavy handed, but it was quite understandable in that situation.

No, it is not understandable. It would be understandable if they were just regular people. But they weren't - they have been given an enormous amount of power with that comes an enormously higher standard of behavior. Giving them a pass because the situation was emotionally difficult is like giving someone a pass for vehicular homicide because they were drunk.