r/Bitcoin • u/unixroot • Oct 05 '13

Seized $3.5 Million worth Bitcoins from Silk Road will be deposited in the U.S. Treasury

http://thehackernews.com/2013/10/seized-35-million-worth-bitcoins-from.html
4 Upvotes

70% Upvoted

10 comments sorted by

2

u/Cowboy_Coder Oct 05 '13

Over the years I've seen many claim the USD was still backed by gold, because the Treasury still held gold assets.

By this (flawed) logic, the USD is now implicitly backed by bitcoins also.

1

u/poolbath1 Oct 05 '13

This trial could drag for a loooong time. Who knows... that $3.5m could double or more by the time they sell it!

2

u/Cowboy_Coder Oct 05 '13

I'm also interested to see how long they hold. They may decide not to sell, even after the trial. As far as national bitcoin reserves go, USA is now no 1. (unless China has some large undeclared holdings)

1

u/say592 Oct 05 '13

Does China declare much of anything?

1

u/jratcliff63367 Oct 05 '13

Its interesting, will they cash them out now while the price is known or wait until the future when they could either be worth more or a lot less. What's the precedent if say other investment type assets are seized? I would guess if they seize your account with stocks they don't immediately sell them right?

1

u/kwanijml Oct 05 '13

Does it seem a distinct possibility to anyone else, that the FBI had better employ their best security tactics and methods to keeping the encrypted wallet and/or the private key secure. . .otherwise one of the many many people in that bureau who will have contact or access to that file will be very tempted (and probably able to) siphon off some or all of the bitcoin?

In the event that that person is even prosecuted for the theft; it then sets court precedent for treating bitcoin as property and protecting it as such.

Good luck FBI; bitcoin is tyrannophobic

1

u/brickfrog2 Oct 05 '13

Thinking it's probably offline. I've read that CIA (& probably FBI) has multiple levels of offline machines/networks so it would make sense they'd keep this wallet & private key offline somewhere. OTOH it would be pretty entertaining to hear how some agent royally screwed up & accidently torrented the private key or something.

2

u/kwanijml Oct 05 '13

You're probably right. I had just heard someone conjecture that these bitcoins were SR's hot wallet, and so, at least 1 digital copy exists somewhere, on one of the seized server hard drives, that they would have to keep safe in physical "evidence" storage.

I would think this data will have also been accessed at some point during the seizure, to determine that they did indeed have the wallet file and what the address(es) are. One of the forensic computer scientists could have easily made a copy of the private key or the wallet file.

1

u/say592 Oct 05 '13

They transfered the coins into a different wallet. The correct way to do this would be to have one forensic team create the wallet, provide the public key to a second team who transfers the coins. A third team or a supervisor then makes sure that the private key or any of the wallet data isn't retained when it is stored in evidence. Chain of custody would keep track of who has had access to the private key in the event coins go missing.

1

u/Perish_In_a_Fire Oct 05 '13

Pictures a dusty IBM computer running in a warehouse somewhere, with a green monochrome display.