Feds Moving Quickly To Cash in on Seized Bitcoin, Now Worth $8.4 Million (arstechnica.com) 151
A federal judge in Utah has agreed to let the US government sell off a seized cache of over 513 bitcoins (BTC) and 512 Bitcoin Cash (BCH). At current prices, that would yield approximately $8.4 million for the bitcoins and nearly $1 million for the BCH. From a report: In a court filing, prosecutors noted that due to the volatility of the Bitcoin market, both coins risk losing value. Both the BTC and the BCH have already been transferred to government-controlled wallets. The new round of seized digital currency belonged to a Utah man named Aaron Shamo, whom prosecutors say led a multimillion-dollar ring of counterfeit pharmaceuticals, including oxycodone and alprazolam that were sold on Dark Web marketplaces. Shamo was arrested over a year ago -- his trial has not yet been scheduled. On Tuesday, US District Judge Dale Kimball allowed the sale to proceed. Once sold, the money would go to an account held at the Treasury Executive Office for Asset Forfeiture.
yup - hasn't even been found guilty yet (Score:5, Insightful)
America, land of the free, and you have RIGHTS... HA HA HA! Meanwhile we will steal your stuff and sell it, putting it into the government's pockets, before you are even convicted of the crime. What good do your guns do you now to defend against tyranny?
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America, land of the free, and you have RIGHTS... HA HA HA! Meanwhile we will steal your stuff and sell it, putting it into the government's pockets, before you are even convicted of the crime.
If they sell AND he's found innocent, AND Bitcoin rises in price to $1 Million US per Bitcoin.... he should get the full $513 Million back plus interest, OR sue their arses off.
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More likely scenario is that bitcoin crashes to nearly nothing by the time he's found innocent, so when he gets his $8 million back from the gov't (instead of worthless bitcoins) he will be a happy camper.
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He has a right to a speedy trial. It doesn't matter what he's accused of, they didn't give him a speedy trial instead they held him for a year without due process and the state holding people without due process is a MUCH bigger crime than shooting at random buildings.
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He has a right to a speedy trial. ... they didn't give him a speedy trial instead they held him for a year without due process...
Being held for a year while awaiting for the trial to be scheduled does not necessarily mean that his right to a speedy trial was violated. There are a variety of exclusions (ex. delays due to motions filed before the trial, which, I think, could come either party).
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Innocent until proven guilty, kind of stops right there. They are factually stealing assets from an innocent person and crime against the US constitution for which the victim now has the right to seize all US government property?
Re: yup - hasn't even been found guilty yet (Score:2)
What greater symbol of the courts' brutal power-drunk overreach than the habit of sentencing the condemned to multiple life sentences. It recalls the image of a deranged killer, shooting his victim's lifeless body over and over again, all the while maniacally cackling.
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If anything, they did him a favor. Sell it off before the value crashes. Then if he's innocent, he gets a lot more money than if it was kept in BTC/BCH.
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If it crashes and he's found innocent, and they bother to return his property at all, they'd just buy him new, cheaper bitcoins.
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If you accuse me of a crime and steal my house then sell it out from under me while I await trial I'm going to be pissed. I don't even care if the price went DOWN in the meantime and you give me more mone
Re: yup - hasn't even been found guilty yet (Score:2)
So basically they just ignore that part of the Constitution. Awesome.
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It's one of those subjective rights, like the right not to have cruel and unusual punishment or unreasonable searches.
Up here the Canadian Supreme Court recently set new guidelines, 30 months for Federal, 18 months for Provincial. 5 to 4 decision with the minority voting it was too short. Murderers are being released as well as many others. The real problem is austerity where the government hasn't been hiring Judges.
http://www.cbc.ca/news/politic... [www.cbc.ca]
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Especially considering that the moment we enter a guilty verdict (even a plea) that person's gainful employment prospect is effectively destroyed if it wasn't destroyed the moment we accused them.
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If we are declaring too many people criminals to be able to give them a trial within a couple weeks we are obviously labeling too many things as criminal and need to start relaxing our laws.
While it is true that we're labeling too many things criminal. (We got into this mess up here partially due to a right wing government doing the tough on crime thing without financing it). For the crimes that most people consider serious and that should be crimes such as murder, it often takes more then a few weeks to get the evidence together. I don't know what the limits should be but I do understand it takes time to gather and organize evidence.
It also depends on how you're spending your time waiting for
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True but that is or should be over before anyone is accused or arrested.
"There's also the defenses right to take as long as needed to formulate a defense."
Yes, but how does that delay the start of trial? That is a delay that can occur during the trial after the prosecution has proven they even have enough evidence for the case to go to trial.
"Up here, at least in theory, it is illegal to discriminate a
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"I don't know what the limits should be but I do understand it takes time to gather and organize evidence."
True but that is or should be over before anyone is accused or arrested.
Ideally, but things often don't work like that. Real world extreme example. Pig farmer suspected of killing prostitutes. Cops search his property and find possessions of a couple of missing women, circumstantial evidence, but enough to lay charges and continue the search. Suspected that he used wood chipper and/or pigs to dispose of the bodies. Takes years to go over the 40 acres or so looking for bone fragments/DNA etc and prosecution keeps asking for more time to get evidence together, which they keep add
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Yes, but so is an arrest. You can't just deprive someone of their freedom on suspicion. You need proof
"So you have years of evidence gathering, then a possibility of a chain of trials and meanwhile the need to keep this nutcase of the str
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My DUI example was bad as actually I just wanted to show where the defense wants to delay the trial to get their defense in order. Charges wouldn't be laid until the tests come in.
As for Pickton, at the point where they searched and found personal possessions of missing people and charged him, they charged him due to having enough evidence (much word of mouth, including at least one woman who escaped him) to probably get a conviction. The more evidence, especially bodies, the better chance of a conviction f
Re: yup - hasn't even been found guilty yet (Score:2)
In Soviet America, everyone has the right to a speedy trial.
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You could buy 9 million dollars, that's pretty valuable.
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And so it begins.
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I would like to see seized assets either be applied directly to the national debt or donated to charity. I would even be ok with the local police department deciding which 501c3 to donate it to but in no ways should they be allowed to directly benefit from either seized assets or fines.
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Why do you libs all hate the first responders?
Re: It seems utterly foreign to me (Score:4, Insightful)
I'm not a liberal. I don't hate the first responders. I just don't think the seized money belongs to them. It doesn't seem like "finders keepers" should apply when the are paid by tax dollars to do the finding. There is also a significant conflict of interest when they are allowed to keep what they find. Spending drug money on drug rehab programs or some other way that directly benefits society seems fairer.
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Don't tell me, tell all the jackoffs who voted for and support Donald Trump.
https://www.vox.com/policy-and... [vox.com]
https://www.theguardian.com/us... [theguardian.com]
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But they do make Justice Department policy, and the policy in the Trump administration is more civil forfeitures.
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Maybe we just think the people we trust to protect the innocent from criminals and the crimes of false arrest and prosecution shouldn't have a financial incentive to falsely arrest and prosecute people.
We have a tax system, whether you agree with the system as it stands or not it is our societies best effort to charge the public for public services in a fair manner. There should be precisely zero other ways we pay for public services.
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Don't tell me. I'm not seizing anyone's property.
Tell it to the Trump Administration.
http://www.foxnews.com/politic... [foxnews.com]
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I"m pretty far away from being a liberal, and I pretty much agree with the OP.
Allowing the entity that can arrest and charge you with something allowing them to seize valuable assets from you, seems quite dangerous if they are to directly benefit from them.
I mean, there is 100% incentive for them to try to charge someone just to get money. That is seriously dangerous. And it isn't like we've never seen a crooked cop or politician, right?
So, I would also lik
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Of course you're correct. I just find it funny when people who support the Trump administration complain about police seizures. The current administration has made it clear that they want to increase such seizures.
https://www.washingtonpost.com... [washingtonpost.com]
http://www.foxnews.com/politic... [foxnews.com]
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The part that's crazy to me is that the dude hasn't even had a trial yet and they are already liquidating his assets. Currently, he's innocent. They are selling off an innocent man's property. That's wrong.
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When has the government ever cared about right and wrong?
Re:It seems utterly foreign to me (Score:5, Insightful)
civil forfeiture is theft, plain and simple.
the idea that YOUR ASSETS are on trial, and you have no standing is absolutely fucking weapons grade bonkers.
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civil forfeiture is theft, plain and simple.
the idea that YOUR ASSETS are on trial, and you have no standing is absolutely fucking weapons grade bonkers.
On the other hand, it's probable that the guy bought/acquired the Bitcoins as a result of selling bogus drugs. If so, those assets were obtained unlawfully. However, if he's acquitted or he can prove they were obtained legally, he can petition to get his property back. One can argue about the wisdom of selling the Bitcoins now -- they could continue to increase in value -- but, in any event, the guy or Government won't lose money should their value decline or, more likely, Bitcoin crashes.
Aaron Shamo, whom prosecutors say led a multimillion-dollar ring of counterfeit pharmaceuticals, including oxycodone and alprazolam that were sold on Dark Web marketplaces.
Re:It seems utterly foreign to me (Score:5, Insightful)
they could continue to increase in value -- but, in any event, the guy or Government won't lose money
The 5th amendment demands just compensation for the taking of private property for use by the government.
ONE of the rights you have as owner of property is the right to control and direct the Timing of when and if you sell it or convert it into US fiat, based on your expectation of what the market price will be.
So if it DOES continue to increase in value sufficiently, then the guy could make the claim he intended to HODL the coins and be due $10 Billion US, the cash equivalent, if for some reason the government's unable to return his property in the same condition as they found it, or if it DECREASES in value, then the guy could claim he intended to sell and thus demand PROPERTY + Compensation for his loss caused by the government interfering with his rights to direct regarding the disposition of his property.
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if for some reason the government's unable to return his property in the same condition as they found it, or if it DECREASES in value, then the guy could claim he intended to sell and thus demand PROPERTY + Compensation for his loss caused by the government interfering with his rights to direct regarding the disposition of his property.
And if that's the gamble, I'm pretty sure they picked correctly.
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That and they've held him for a year without trial
In all these cases it is the defendant (and their lawyers) who must agree the right to a speedy trial be waived. It is usually in the defendant's own best interest.
In most cases prosecutors have all the cards and are prepared with ally they need when they finally press charges. They are more than willing to move to a trial immediately before the defense has time to gather all they need. The government usually spends months preparing these cases so they're certain that (right or wrong) they can get a conv
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That and they've held him for a year without trial
In all these cases it is the defendant (and their lawyers) who must agree the right to a speedy trial be waived.
No, not all of them and the courts support various ways to coerce the defendant into giving up their rights.
https://www.newyorker.com/maga... [newyorker.com]
June 23, 2011: People not ready, request 1 week.
August 24, 2011: People not ready, request 1 day.
November 4, 2011: People not ready, prosecutor on trial, request 2 weeks.
December 2, 2011: Prosecutor on trial, request January 3rd.
Bigger problem (Score:3)
The problem with this rationale is that it is the Prosecution who asserts that this is probably ill-gotten wealth, often using the successful acquisition of an indictment as proof of probable cause for seizure. Once they get a judge to agree, assets are seized.
In the US justice system, money improves outcomes for defendants. Now the defendant cannot use those assets to pay for a defense. This is fine if the assets ARE proceeds of crime, but what about when they aren't?
The defendant has not yet been prove
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In our system the accused are innocent until proven guilty. You've defined a system of assuming he is guilty until he manages to establish otherwise. In this case he has been held a year as an assumed innocent, that violates the six amendment so it really no longer matters if they co
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It seems pretty foreign to me that they can do whatever they please with the property of someone whose trial hasn't even been set yet.
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Seriously? They get to personally pocket the dosh?
I'm in a kind of uncanny valley, because it's so retarded it shouldn't be true, but some retarded things actually are.
Do they have to give it back if (unlikely, I know) he's found not guilty?
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Do they have to give it back if (unlikely, I know) he's found not guilty?
Nominally they do. But I have read a lot of cases where it has proved very hard to get your property back after a civil asset forfeiture action.
This happens a lot in smaller actions, not where millions of dollars are at stake. Somebody gets their door kicked in on suspicion of something or other, they often gather up all computers and files. Cars and other vehicles. It can take months if not years to get it back after the prosecution has been dropped and often it isn't in good shape when returned.
Civil
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Seriously? They get to personally pocket the dosh?
Sure, if you work at the Treasury and your name is Asset Forfeiture.
Once sold, the money would go to an account held at the Treasury Executive Office for Asset Forfeiture.
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>> Once sold, the money would go to an account held at the Treasury Executive Office for Asset Forfeiture.
Through a process called revenue sharing, a portion of these dollars (>80%) can flow back out of the treasury and into the state or local law enforcement agency that executed the seizure.
If that sounds fundamentally wrong and rife with the opportunity for abuse, congratulations. It appears you are paying attention.
Asset forfeiture (Score:2)
Typically, the organization that did the seizing gets to keep it. This motivates a lot of the roadside vehicle searches by sheriff's deputies and highway patrol officers. These guys often seize cash in the $5,000 - $10,000 range. This money stays in their local department, and because it is not from a budget line-item, they are generally allowed to spend it on whatever they want, like espresso machines and video-game consoles for the break room. The former owners of this money will struggle to get it bac
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What if it goes up? (Score:1, Interesting)
They're going to sell off seized assets before the trial has even been scheduled? What if the value goes up and he's acquitted? Will taxpayers be on the hook for the difference when he goes to collect his property?
Feds Cash In (Score:2)
"Feds Cash In BitCoin." A title like that, carried by enough outlets, just might ignite the "correction".
No Trial? (Score:5, Funny)
"Shamo was arrested over a year ago -- his trial has not yet been scheduled."
I'm glad the Framers added the right to speedy sale of BTC, but they could have also added one for trials.
Re:No Trial? (Score:5, Insightful)
I'm glad the Framers added the right to speedy sale of BTC, but they could have also added one for trials.
It could be his defense team requesting the delay.
Civil forfeiture is used for nearly every drug crime prosecuted (not convicted -- prosecuted). The process goes all the way back to the US prohibition on Alcohol. The chemical substance may have changed, but the process is the same: Property is seized during "drug" activity, the Police get the assets to buy equipment, facilities, or salaries.
It's one reason you never travel with a large amount of cash in the US. In some states, police can often just claim "we have probable cause that the cash is drug money" and seize it. Zero recourse.
Richard Thornburgh, Reagan's attorney general, said:
It's now possible for a drug dealer to serve time in a forfeiture-financed prison after being arrested by agents driving a forfeiture-provided automobile while working in a forfeiture-funded sting operation.
Many politicians love the idea - make the police self-funding by letting the Police keep seized assets, and then cut taxes.
What could possibly go wrong when the Police are financially motivated to seize property, and don't need to convict the owner to seize it?
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Indeed - bitcoin delayed is bitcoin denied
You know the old saying; "Better that ten innocent BTC owners have their assets seized by the government and liquidated by the Treasury without trial, rather than allowing even one citizen to stash away wealth in a crypto blockchain we can't touch."
Strat
Makes sense to me (Score:3, Interesting)
It makes sense that they'd try to convert this particular seized asset to cash ASAP. It's not mansions, paintings and a fleet of luxury cars...it's a highly volatile cryptocurrency. Turn it into cash, hold onto it until the trial and appeals are over, and you still have an asset worth something. If they wait and the bubble pops, they get nothing or a fraction of what they would get had they sold.
Re:Makes sense to me (Score:5, Insightful)
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The problem isn't that the police seized the assets and prevented the defendant from routing them to other forms and uses pending the trial.
The problem is that assets seized from a drug arrest can be auctioned and the proceeds given to the police department before there is a conviction that a crime even was committed.
This means you can be arrested on a drug charge, and before the test comes back about whether those pills in your pocket were ibuprofen or crack, the police have sold your car and bought a new
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This means you can be arrested on a drug charge, and before the test comes back about whether those pills in your pocket were ibuprofen or crack, the police have sold your car and bought a new set of hats for the whole department.
It's far worse.
They don't have to arrest you or charge you with any crime. They can (and often do) stop interstate motorists and seize cash/valuables, then send the motorists on their way with no arrests, no charges against the person(s) involved.
They've created this legal fiction from whole cloth that inanimate objects break laws all on their own and can be charged with violating laws as if they were sentient, self-determining/self-willed, and aware. It would be totally laughable on it's face if it didn't
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On the other hand, volatility works both ways. If they fail to make their case then they owe Aaron Shamo his seized property back, 513 BTC and 512 BCH, plus whatever profit they realized on it while it was in their keeping, since that profit would naturally have accrued to the owner if they hadn't interfered.
Selling now allows them to lock in the higher price in the event that they win, but also means that they stand to lose quite a bit if the price rises and they lose the case.
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since that profit would naturally have accrued to the owner if they hadn't interfered.
We don't know that the owner would have made the same choices. Wait till BTC crashes and re-buy 513 BTC / 512 BCH and return the same that was taken if he was proven innocent. Make a nice profit for the American people.
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We don't know that the owner would have made the same choices.
Doesn't matter. If they were able to turn a profit then it stands to reason that the owner could have done the same. Either way they are responsible for taking away that choice from someone they never proved guilty of any crime. Making their victim whole involves more than just the return of the original property; they have a responsibility to render the accused at least as well off as they might plausibly have become had the property never been seized.
On the other hand, you appear to be suggesting that the
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If they had seized US Dollars that could have been invested, they'll only return the same amount of US Dollars and probably without interest. By that theory, Bitcoin should be returned as-is, coin for coin - regardless of its relative value to some other standard.
it's not 10.000,00 lbs of ham... (Score:2)
What they should do is hold onto the seized assets. Return them to him if he is found not guilty, do what the law allows if he is found guilty.
and FURTHERMORE... (Score:2)
JESUS H FUCKING CHRIST ON A POGOSTICK YOU'VE ALL GONE GODDAMNED INSANE.
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What they should do is hold onto the seized assets. Return them to him if he is found not guilty, do what the law allows if he is found guilty.
You clearly do not understand civil forfeiture. There are only three states which require conviction for forfeiture. In 46 states, if there's enough evidence to go to trial, your property is forfeit -- win or lose. (Many states require enough evidence for a search warrant to forfeit property -- and that's all.).
If you are found innocent, your odds of seeing one red cent again are comical.
Unsurprisingly, politicians are split two ways over the issue, and we get to vote for a candidate:
* A candidate who will
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That would make sense if this were an asset they owned. But it isn't. It's still his property, merely in their possession. The government is merely holding his seized assets in escrow until the trial is concluded. If he's found guilty, they are free to do with them as they please, but not until then. Imagine you were arrested and the government seized your childhood home because you were allegedly conducting illegal activities out of it. Imagine if after you were later found innocent, the government handed
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If they wait and the bubble pops
How about waiting until the person is found guilty before selling off his assets?
Yeah this will work out great. (Score:2)
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On the other hand, if they tried to sell that much now they would single-handedly tank its value. Investors would panic, not knowing why so much is being sold.
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Transfer time? (Score:1)
...after a thirty-day delay due to high Bitcoin network fees.
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1) didn't password protect his wallet
or
2) told the government his wallet password.
I think we all know whose fault this is.
What they gotta do they gotta do (Score:2)
I can't say why this pops into my head while reading this article, but I am reminded of how the history of the federal bureaucracy includes times where they managed brothels in Nevada as an ongoing business after seizing them as part of tax enforcement action.
I guess it is because for some reason it doesn't seem that the Feds have any business trading Bitcoins either.
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Until recently, Utah (the state in TFA) requires "dealers in possession of a controlled substance must purchase and affix drug tax stamps to the controlled substance." (Story covering the repeal [taxrates.com])
Yes, some stamp collectors have been able to buy the stamps. Collectors that apply for them are given a complimentary and thorough in-home audit.
~5% drop. (Score:2)
A market order of that size (which is relatively small) will drop the price around 5%, that should put things in perspective for people but it won't.
Good thing this person: https://pineapplefund.org/ [pineapplefund.org] is altruistic because if they unloaded all of their bitcoin in a market order he would drop the price around 60%.
People are going to get crushed when the bottom fall out of this thing. It's not going to be pretty.
Volatile? (Score:1)
Dude lived around the corner from me (Score:1)
Not Guilty - then what? (Score:2)
Some Damned Foolish Thing In The Rockies (Score:1)
It'll be something dumb like this that sets of the big sell-off and crypto-crash.
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Liquidating the position before there is a trial seems unjustified.
They do it all the time. [wikipedia.org]
No, it's a tax (and fine for noncompliance) (Score:2)
The government sells the assets that were obtained by selling contraband. So it is actually like the government just sold a bunch of drugs.
No, somebody sold contraband, and the government collected taxes & fines.
Utah (the state in TFA) requires "dealers in possession of a controlled substance must purchase and affix drug tax stamps to the controlled substance."
There's literally a law requiring drug dealers to buy stamps from the state, and attach the stamps onto every packet of drugs sold.
As with most taxes, there are severe penalties for noncompliance.
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Ever consider the BTC may be stored in a US based exchange like coinbase who store over 98% of the assets "for their customers security"? [coinbase.com]
If the exchange is in the US, they'd no doubt have to turn over the BTC (or its cash equivalent) or face federal money laundering charges.
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they are raising awareness that BTC has real value.