US Marshals Auctioning $20M Worth of Silk Road's Bitcoins 119
coondoggie writes: The U.S. Marshals office says it will auction off almost 50,000 bitcoins (about $20 million worth) seized from alleged Silk Road creator Ross Ulbricht. The auction, which is the second sale of Silk Road's bitcoin collection, will take place during a 6-hour period on Dec. 4 from 8:00 a.m. until 2:00 p.m. EST. Bids will be accepted by email from pre-registered bidders only, the U.S. Marshals office said. In June more than $17 million in bitcoins seized from the Silk Road take-down were auctioned off.
I wish they would just auction off the drugs (Score:4, Funny)
Do you know how hard it is to find quality MDMA?
It's fucking impossible. Unless you want shitty speed you need a really good connection, which I sadly can't find.
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Yeah but dinnertime would be a drag.
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The viability of Bitcoins is an inverse relationship between the ease of mining one versus obtaining quality Molly.
Payment methods (Score:5, Funny)
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I'd rather buy those Bitcoins with Dogecoins at a 1:1 ratio.
What a moron! (Score:1)
He had 20 mil worth of Bitcoins? He should have sold them all himself and then fled the country.
Re:What a moron! (Score:5, Insightful)
He had 20 mil worth of Bitcoins? He should have sold them all himself and then fled the country.
Unlike the US marshals, Dread Pirate Roberts has a sense of decency.
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Dread Pirate Roberts has a sense of decency.
I'd have a lot more sympathy for him if he'd stuck to drugs rather than attempting to hire hits(contract murders) through his own site.
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Oh, that made me laugh. I can set up a website to sell handguns to convicted felons and murderers with no paperwork. To top it off, it would be 100% legal.
You should read the law, it is amazing what you learn. For example, the working replica of an 1861 naval revolver requires no paperwork, no registration, can be sold online, and can be shipped to anywhere in the US.
And for the record, I sold gray area items on silk road. Things that you can legally sell, however CC merchant accounts, paypal, google pay, e
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So we should ban cars because sometimes crimes are committed in them.
Right?
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You make me laugh. Black powder revolvers are way too much of a PITA for criminals to want or use. Show me links to black powder pistol homicides after 2004...
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I think all guns can be assualt guns, if used to assault someone. For example, if I bean someone on the head with my black powder 1858 New Army, it becomes a Black Powder Assault Revolver. As opposed to shooting some SOB dead with it, then it's just a weapon.
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Reading comprehension fails you, I was not offering a definition for "assault rifle". Read again.
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Really? So you're claiming that you were instead sidestepping his question, and misleading everyone into thinking you were on about actually answering his valid point? You REALLY want to make that claim?
How can a rational human prefer to be thought a troll and a moron over just simply ignorant?
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I was making a joke, but the limited number of actually interconnected neurons between your ears might prevent you from processing such.
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I can set up a website to sell handguns to convicted felons and murderers with no paperwork.
Actually, no, you can't. Such a website would doubtless be construed as engaging in the business of selling firearms, which requires a Federal Firearms License. FFLs are mandated to you run background checks before the transfer of any firearm. Private sellers do not face this requirement but they're still forbidden to transfer a firearm to someone that they know to be a prohibited person.
Set up that website if you doubt me; I hear Club Fed is beautiful this time of the year....
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Under federal law, muzzleloaders aren't classed as firearms, so A) he wouldn't be in the business, and B) the prohibition on felons wouldn't apply.
State and local laws may vary.
Re:What a moron! (Score:4, Insightful)
The feds robbed the users of this popular eCommerce site, and pointed to archaic prohibition laws as a justification for their theft. The US government has been at war with its own citizens for far too long, and needs to be stripped of its power to harm peaceful people.
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It's a great source of business.
You can't just say "you're doing it wrong" without providing a better alternative.
Who else are they gonna rob? There are lots of US citizens.
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I had a few bitcoins stored there at the time. I am not a a US citizen, do not live in the US, nor did I purchase from anyone in the US. Yet suddenly the US government has my money. Regardless of what law they use to justify it, it certainly feels like theft.
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Don't feel picked on. Our federosaurus steals from Americans as readily as it does from foreigners.
But the case hasn't even started! (Score:5, Insightful)
So, his trial hasn't even started yet, but they're already auctioning off what they seized as part of the investigation.
There's sleazy, and then there's the U.S. Marshals.
Re:But the case hasn't even started! (Score:5, Insightful)
Bitcoins were deemed to be regulated as currency, and thus the remuneration the US government might owe the defendants can be delivered in US dollars, should the property not be found to be forfeit.
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Sounds right to me. That really is what that little phrase on every bill about being useful for all debts "public and private" really means. If I want to trade you X for Y, I can do that, but, if you owe me anything, even if its a good, I HAVE to be willing, by law, to accept payment in dollars instead....or else my claim that you owe me anything is forfeit.
The most common example is something like a restaurant. You come in and eat. Now that you have eaten, a debt has been created, and you owe. The restaura
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Then explain why every apartment complex will refuse cash and tell you to go get a money order to pay your rent?
Note: I have not lived in a rented apartment in years, this may have changed. When I did live in apartments they would NEVER accept cash.
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Then explain why every apartment complex will refuse cash and tell you to go get a money order to pay your rent?
Cash is not the only way to pay in U.S. Dollars.
Re:But the case hasn't even started! (Score:5, Informative)
If it were a debt you owed, they'd be legally obligated to take it. If payment is a condition of keeping your space, it's not.
Once they evict you, and send you a bill for past-due rent, they have to take cash.
Re:But the case hasn't even started! (Score:4, Insightful)
You know, I'm feeling a little wary of that +4 Informative I got.
I'm not a lawyer, and I could be misconstruing the law [cornell.edu], which says
It could be the concept of "legal tender" is way more complex than I'm giving it credit for. It's certainly the case that people have gotten in legal trouble for paying in nothing but pennies, for example.
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Could be. I know in Canada pennies are^Wwere only legal tender in groups of less than 25. (so you can't pay your income tax or parking tickets in pennies). I'm unsure if the US has a similar restriction?
Limitation
(2) A payment in coins referred to in subsection (1) is a legal tender for no more than the following amounts for the following denominations of coins:
(a) forty dollars if the denomination is two dollars or greater but does not exceed ten dollars;
(b) twenty-five dollars if the denomination is one dollar;
(c) ten dollars if the denomination is ten cents or greater but less than one dollar;
(d) five dollars if the denomination is five cents; and
(e) twenty-five cents if the denomination is one cent.
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http://www.snopes.com/business... [snopes.com]
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OMG, self-deprecation on the web. Seriously, kudos. (I am not being sarcastic.)
You're very right that the way the law uses certain words and expressions—"terms of art"—can be very different from expected. "Weapons of mass destruction" for example. :)
Good link provided in above comment: http://www.treasury.gov/resour... [treasury.gov]
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theres a story, an old one, about a lass who incurred a debt from a disreputable firm. law firm maybe. it changes
she couldnt afford to pay. so tries to escape it through various means.
after months of wrangling, she finally had no choice but to pay.
she finally saved up enough to pay it off.
being as ticked as she was, she put it all in pennies.
bags and bag and bags of pennies.
and when she tried to drop it off, they refused to acept it.
shes says "are you refusing to accept payment?"
they says "yes."
she says ok
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Actually this is an interesting question and you might need to talk to a lawyer for a real answer, as IANAL but, as I understand it US dollars must be accepted FOR DEBT. Rent, paid on time, is not debt as its for the upcoming month, then again, I would think it becomes debt after the first since most places have a built in grace period and it takes time to actually kick people out (and any landlord who kicks people out for being a day or two late will be spending a lot of months with empty apartments and ha
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That is exactly it. A check is a receipt, its unambiguous, there is record of it at both banks or in both ledgers of the same bank....its perfect for this. I mean hell, as a landlord I would rather not have to issue my own receipts because its much easier for me to remember that I never issued you an explicit receipt for anything than which ones and when.
and of course, just in the past year I know people who have had issues with the fact that they and others paid rent in cash a lot and money went missing. D
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Despite what the upper level post says, there is no Federal law that imposes a general requirement to accept Federal Reserve Notes in satisfaction of any debt. The legal tender for all debts wording on the face of those notes is derived from Title 31, United States Code, Section 5103 ("United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues. Foreign gold or silver coin
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State and local law may vary and require acceptance of Federal Reserve Notes in satisfaction of a debt. LEGAL tender does not in and of itself mean MANDATORY tender.
When it comes to debts, that's pretty much exactly what it means:
Legal tender is variously defined in different jurisdictions. Formally, it is anything which when offered in payment extinguishes the debt.
Legal Tender [wikipedia.org]
If someone who owes you a debt offers to pay the full value in legal tender (regardless of the original form of the debt), you can either take what they're offering or give up on collecting. In general the offer must be exact; if someone who owes you $5 hands you a $100 bill, that legally satisfies the debt but you are under no obligation to provide change.
This doesn't mean that all transaction must involve legal tender, or that you can be com
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Then explain why every apartment complex will refuse cash and tell you to go get a money order to pay your rent?
There are security issues with handling, storing and transporting tens or even hundreds of thousands of dollars worth of cash that the apartment complex would rather not deal with.
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This is the real answer. And more specifically, they don't trust their employees with access to thousands of dollars of cash.
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Its probably part of the lease contract. I know it was in mine.
And there's this:
I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?
The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."
This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.
http://www.treasury.gov/resour... [treasury.gov]
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That's not arbitrary; that's a firm and understandable rule. Arbitrary would be if my 10 million dollar donation got me a law in my favor and yours did not. :)
Just like the rule I learned in copyrights class: The Mouse always wins. That means that no matter what the law is or how it has always been interpreted, Disney gets what it wants.
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plus consider, not accepting cash often protects both you, the complex owner, and the actual persons in the lease office.
The latter is particularly important, because if they accepted cash a typical 500 unit complex would have between 250k and 1M $$ on hand on the first of every month.
And since their security is usually non existent, that would make leasing offices a VERY ATTRACTIVE target.
Accepting checks only, which are payable only to the person written on it unlike cash, completely eliminates that.
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"Then explain why every apartment complex will refuse cash and tell you to go get a money order to pay your rent?"
Basically because rent isn't a debt. It's a transaction. My local grocer doesn't accept credit cards (debut or cash or check only) and that is fine because shoppers aren't in debt to the grocery store.
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That really is what that little phrase on every bill about being useful for all debts "public and private" really means.
For some reason, this apparently doesn't apply to driving on roads, since Pennsylvania now has turnpike exits where you can only pay with E-ZPass.
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Exits 320 [paturnpike.com] and 352 [paturnpike.com].
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especially since storing the bitcoin keys can't really be seen as presenting any sort of hardship to them
I would have just guessed that Lockheed Services is charging them $400K/mo to store them.
I was going to say $40K/mo, but you know, the first rule of government contracting.
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Except that is not at all what is meant by that phrase.
Next time, try writing about something you know about.
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Regardless of whether bitcoins are currency, the government is forcing the defendants onto the bitcoin market. If they're found not guilty, and at the same time the price of a bitcoin doubles, theywere deprived of $20 million of income.
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Bitcoins were deemed to be regulated as currency, and thus the remuneration the US government might owe the defendants can be delivered in US dollars, should the property not be found to be forfeit.
At what exchange rate? If the 50,000 bitcoins were seized incorrectly then are they going to give him $20 million in cash?
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I'm pretty sure that's exactly what this auction is going to establish.
But the case hasn't even started! (Score:5, Informative)
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Re:But the case hasn't even started! (Score:4, Insightful)
I agree here. This is the actions of a police state. Its quite disturbing to see complete forfeiture of assets without a trial taking place. I know normally tycoons and other scum like Madhoff and Ken Lay deserve to be tarred and feathered and pilloried for their crimes against society and shareholders, but who exactly was DAMAGED by Silk Road? Did all of the buyers receive their goods? If so, what is the DAMAGE?
How does the government have standing to claim silk road DAMAGED all those buyers?
Why doesnt the government go after Jack Ma and Alibaba? (As in they block those transactions and forbid buying off that fraud-racket-exchange)? Alibaba sells stolen fraudulent broken junk that is masqueraded as legitimate (its basically a crime mall) but we let that go and shut down silk road and seize all assets? Doesnt make sense. Criminal rackets operate eyes wide shut but it seems the Fedzilla is only angry that they couldnt collect tax off these transactions in which case he should be sued for that money.
Total forfeiture seems out of the bounds of due process.
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I agree here. This is the actions of a police state. Its quite disturbing to see complete forfeiture of assets without a trial taking place. I know normally tycoons and other scum like Madhoff and Ken Lay deserve to be tarred and feathered and pilloried for their crimes against society and shareholders, but who exactly was DAMAGED by Silk Road? Did all of the buyers receive their goods? If so, what is the DAMAGE?
How does the government have standing to claim silk road DAMAGED all those buyers?
Why doesnt the government go after Jack Ma and Alibaba? (As in they block those transactions and forbid buying off that fraud-racket-exchange)? Alibaba sells stolen fraudulent broken junk that is masqueraded as legitimate (its basically a crime mall) but we let that go and shut down silk road and seize all assets? Doesnt make sense. Criminal rackets operate eyes wide shut but it seems the Fedzilla is only angry that they couldnt collect tax off these transactions in which case he should be sued for that money.
Total forfeiture seems out of the bounds of due process.
ere is what I see Mr. Ulbricht thinking: "Alright so I'm sitting on 20 million worth of BTC, based on what the prosecution has stated, those 20 million dollars are MI NE and do not actually belong to other people. If I let the the feds auction off those BTC and turn them into real money, then if I beat the case I will not have to go through the hassle of finding an exchange willing to handle this much money."
Basically, if Ullbrict can manage to beat the rap against him, then he's just used the US gov't as a
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Its quite disturbing to see complete forfeiture of assets without a trial taking place. I know normally tycoons and other scum like Madhoff and Ken Lay deserve to be tarred and feathered and pilloried for their crimes against society and shareholders, but who exactly was DAMAGED by Silk Road? Did all of the buyers receive their goods? If so, what is the DAMAGE?
1. The assets aren't forfeited(yet). They're being converted to USD with Ulbricht's consent. Doing so locks down the value now, and he might manage to keep some of it.
2. Who was damaged by the Silk Road? Well, allegedly Ulbricht tried to commission 6 murders on it [huffingtonpost.com].
3. The goods were illegal, even though I disagree with them being so. Well, except when the 'goods' are contract hits and such.
Jack Ma, being a Chinese Citizen, and Alibaba, a chinese company, would be rather hard to arrest them. Blocking
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They're auctioning them off because Ulbricht has explicitly denied that they're his. He's in a tough position - if he claims them as his own, he's acknowledging that he was running Silk Road.
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Ignore my post, I've got this completely wrong. Oh, for an edit or delete button.
Re:But the case hasn't even started! (Score:5, Insightful)
The trial against the bitcoins, US Government VS 50,000 Bitcoins, was decided already.
The bitcoins failed to hire a lawyer in their defense, and it's not like they couldn't afford one so there was no need to provide one for them.
Ah...the joys of civil forfeiture.
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This sale was agreed upon by both parties. The proceeds from the sales will be placed in a fund and will go to whomever proves themselves in court.
And then... (Score:3)
After the auction the Bitcoins will be confiscated as they were previously the proceeds from illegal drug transactions.
Pre-registered bidders (Score:3)
Name:
Address:
Email:
Photo (full face, left and right view):
What is your interest in acquiring seized Silk Road bitcoins:
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Yes, I can see where there could be risk to those who bid, either from the US Marshals (confiscation of property under seizure laws without trial) or from the drug lord.
---
Add to your sig: But they deceived themselves; they did not reckon...
Should be illegal (Score:1)
To auction off someones possessions without a conviction.
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Not if the guy they were taken from agrees.
BTC are on a steady decline in value, so they're being sold now. I assume if he is not proven guilt, he'll get the cash back.
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BTC are on a steady decline in value. They're also on a steady incline in value. Depends when you look.
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Civil forfeiture does not require a guilty verdict.
Another word for robbery (Score:5, Informative)
Civil Asset Forfeiture [youtube.com]
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The states that have completely unreasonable standards for when this can happen are:
Alabama, Alaska, Delaware, Illinois, Massachusetts, Missouri, Montana, Rhode Island, South Carolina, Wyoming, Georgia, North Dakota, South Dakota, and Washington.
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Conversely, how else can an inanimate carbon rod win the Worker of the Week Award?
I find the concept truly fascinating. And that people find it acceptable... No doubt about it, they see *five lights*
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According to CNN [cnn.com] and Forbes [forbes.com] North Carolina is the only state without civil forfeiture where the actual property owner must be convicted of a crime before the property can be seized.
Unfortunately as the Forbes article points out local law enforcement often gets a federal agent involved so they can use federal overreach to usurp the state's rights so ultimately it doesn't matter what the state law is.
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Yeah, but some standards are quite reasonable. Other states can still demand proof from the police seizing things, where the states I listed keeping things alleged to be involved in a crime essentially require an affirmative defense.
Here's my offer (Score:4, Funny)
Dear U.S. Marshals, I am prepared to offer TEN Dogecoins for each ONE Bitcoin.
I bid $10 (Score:1)
Basically it will be a bunch of people playing chicken to see who will be willing to take the least profit margin for winning.
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Essentially, they're just converting currencies. If they had seized a large pile of Yen, they could just convert it to US$, since there are highly liquid markets to do that. With Bitcoin, there isn't the liquidity to run a transaction of this size through any of the exchanges, so they're auctioning them off. Investors do similar things with stocks every day - if you're a mutual fund, and you want to sell 10k shares of AAPL (which trades about 50 million shares a day), you just sell it through an exchange
Can they be blockled/filtered? (Score:2)
It would be nice if this can be protested by making a list available of these BT, and all popular exchanges chooseing not to accept them. At the very least, it would devalue them.
So the US Marshalls are going to give the (Score:2)
drug dealers, assassins, money launderers, and other shady types who use Bitcoin a chance to buy back the bitcoins they used on Silk Road at a discount!
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Actually fairly unlikely. Give it a few more transactions.
Hey bah yah bah haba (Score:2)
Going once! Going twice! Sold to the man with the Facebook lapel pin for 40 Billion dollars!
- not intended to be offensive to auctioneers, but poking fun at the over inflation of everything "tech" -
Anonymous (Score:2)
I think it's high time Anonymous hijacked the auction and simply take the bitcoins. It would serve the Feds right to have happen to them, what they essentially did to Silk Road.
Since the money isn't "real", nothing of value was taken.
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Who says the money isn't "real?" Bitcoin clearly do have value.
How much more screw up can our government get? (Score:4, Interesting)
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They're not selling them on the exchanges precisely BECAUSE they want to avoid sharply pushing down the price of Bitcoin. $20M is about five days worth of volume on the USD/BTC exchanges. If you tried to dump that much volume into the exchanges, it would crush the price of Bitcoins vs. the US$.
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Including 144,336 Bitcoin found on computer hardware belonging to Ulbricht, the government has recovered 173,991 Bitcoins. A spokeswoman for the Marshals Service, Lynzey Donahue, said in an email that the agency anticipated selling the remaining Bitcoins "in the coming months," but that "no exact dates have been determined."
So, less than a third are going to be dumped on the market now, with other big chunks in the future. Anyone with insider knowledge of the dates of the auctions could sell before the auction date is announced, and buy back at a lower price after, when the influx lowers the price.
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If you've worked in IT for a while you should be able to put together a $150k check...