FBI Stymied By Bitcoins

[Streak]

Guess they thought it would be all wine and roses and looted booty after they busted up Silk Road and arrested the Dread Pirate Roberts. Now they're finding out that they have no way to access the bitcoins they seized from the members of Silk Road or Roberts. There's a lot a money there and, unless they know how to decrypt the wallets they'll never get their grimy hands on it. LOL. Modern tech has finally come up with a way to stop the government from enriching themselves by seizing money. It may not be usable by its true owners, but the FBI and .gov are never going to see a penny of profit off of it.

Ignorant FBI Agents Realize They Can't Open Bitcoin Digital Currency Wallet | The Libertarian Republic

Most likely they want his wallets because they contain transaction information (who/how much) for transactions coming and going. With that information, combined with the database of the website, and who knows what else, they can begin to figure out who is making/buying the drugs.

The value of that money is all theoretical and fluctuates daily. If they were so concerned about the bitcoin stability they could just cause a few of the exchanges to go offline -- last time that happened Bitcoin tanked.

No, I doubt they care about the "value" of bitcoins and care more about getting to the makers/buyers of the drugs and access to the wallets would help make that easier.

 

[mrjarrell]

They always care about the value of things they seize. We've seen this in the past. They like policing for profit.

 

[IndyGunworks]

So, this is where wallet ended up?

not all will understand this, but I see what you did there. Repped.

 

[Stickfight]

Most likely they want his wallets because they contain transaction information (who/how much) for transactions coming and going. With that information, combined with the database of the website, and who knows what else, they can begin to figure out who is making/buying the drugs.[/QUOTE]

Most likely not, because they don't need access to the wallet to determine the transaction history.

 

[HeadlessRoland]

Federal judge has already recognized Bitcoin as a legitimate currency, thus enabling New York to subpoena every Bitcoin exchange service. It has its own ticker symbol (XBT). I think the hemhawing about 'recognizing value' is over, to anyone who wonders how the FBI can seize BTC: the same way the FBI seizes anything else. The problem will be converting it to federal reserve notes, since they can't decrypt it.

 

[Streak]

Guess they thought it would be all wine and roses and looted booty after they busted up Silk Road and arrested the Dread Pirate Roberts. Now they're finding out that they have no way to access the bitcoins they seized from the members of Silk Road or Roberts. There's a lot a money there and, unless they know how to decrypt the wallets they'll never get their grimy hands on it. LOL. Modern tech has finally come up with a way to stop the government from enriching themselves by seizing money. It may not be usable by its true owners, but the FBI and .gov are never going to see a penny of profit off of it.

Ignorant FBI Agents Realize They Can't Open Bitcoin Digital Currency Wallet | The Libertarian Republic

Yeah, this probably has next to nothing to do with "profit" and everything to do with the fact that the wallets contain transactions logs. Combine those with server/ISP logs and you can build up an idea of who is buying/making the drugs. The UK has already arrested a few Silk Road users. BTC is hard to convert to cash without crashing the market in the process...and generally if you wanted to crash the market all you'd have to do is DDOS a few exchanges for a few weeks. It's worked before.

So gonna lean on my brain and say that this is more about tracking and less about profiting off some thesis experiment.

 

[Stickfight]

Yeah, this probably has next to nothing to do with "profit" and everything to do with the fact that the wallets contain transactions logs.

What part of

Most likely not, because they don't need access to the wallet to determine the transaction history.

don't you get? You obviously don't know much about how they work. All bitcoin transactions are public, by design. The entire transaction log* to the seized wallet and every other bitcoin wallet are already publicly available to everyone including the FBI.

* next time you want to fool someone into thinking you know what you are talking about re: bitcoin, call it a "block chain"

 

[Streak]

What part of



don't you get? You obviously don't know much about how they work. All bitcoin transactions are public, by design. The entire transaction log* to the seized wallet and every other bitcoin wallet are already publicly available to everyone including the FBI.

* next time you want to fool someone into thinking you know what you are talking about re: bitcoin, call it a "block chain"

You assume I don't know anything about bitcoins. Understand that while the bitcoin logs are open for everyone to see, it becomes a lot more difficult to parse through the logs to figure out where addresses are going, especially if someone is half ways intelligent and using multiple sending addresses.

A one-time use address doesn't denote a standard behavior. Multiple addresses being used to buy from the same buyer, same amounts, and tying them to the same account on the Silk Road database would, however, establish a pattern that you could use to help figure out someone's identity.

Maybe I'm wrong about this, but something tells me that if you suddenly started cashing large amounts of bitcoins you'd crash the market and they'd lose their value...it's not really a stable market to begin with. Maybe they just have a dumbass investigator who doesn't understand bitcoins and thinks that a wallet's transaction logs provides more "proof" than the public one?

I can't swallow the "BITCOIN = MONIES" pill until I see it happen.

 

[Stickfight]

You assume I don't know anything about bitcoins. Understand that while the bitcoin logs are open for everyone to see, it becomes a lot more difficult to parse through the logs to figure out where addresses are going, especially if someone is half ways intelligent and using multiple sending addresses.

I am not assuming anything, I know you don't know much about them from reading your posts.

'Parsing' the block chain to find the transactions going to a wallet is easy. Transactions in the block chain to sent to Russ Ulbricht's wallet are right here and every single one that has ever gone to it is right there on that page. Access to the wallet cannot reveal additional transactions. I can see them all, you can see them all, the FBI can see them all, without accessing his wallet.

I have no idea what you could mean by 'someone using multiple addresses'. If you mean Russ, maybe he has 1000 wallets, I have no idea. But accessing the seized one cannot reveal any information about them isn't already public. If you mean Silk Road users who sent him payments, again, accessing his wallet cannot reveal any information about that that isn't already public.

Multiple addresses being used to buy from the same buyer, same amounts, and tying them to the same account on the Silk Road database would, however, establish a pattern that you could use to help figure out someone's identity.

Now you are talking about access to the Silk Road's site's database. You do understand that that is not the same thing as a bitcoin wallet? I have no idea what kind of user information he maintained in his site, but even if he linked real names to wallet addresses, matching that information to payments to his wallet would not require accessing the wallet. Because, as above, all transactions to the wallet are already public.

Maybe I'm wrong about this...Maybe they just have a dumbass investigator who doesn't understand bitcoins and thinks that a wallet's transaction logs provides more "proof" than the public one?

The only thing accessing the wallet can allow them to do is empty it. Either move the balance to another wallet they control, or sell it for another currency. There are ways to make it impossible to lock an owner out of his wallet, but it doesn't appear that Russ Ulbricht did that for this one. Given that, the FBI doesn't need to move the balance to keep him from spending out of it.

 

[Streak]

I am not assuming anything, I know you don't know much about them from reading your posts.

'Parsing' the block chain to find the transactions going to a wallet is easy. Transactions in the block chain to sent to Russ Ulbricht's wallet are right here and every single one that has ever gone to it is right there on that page. Access to the wallet cannot reveal additional transactions. I can see them all, you can see them all, the FBI can see them all, without accessing his wallet.

I have no idea what you could mean by 'someone using multiple addresses'. If you mean Russ, maybe he has 1000 wallets, I have no idea. But accessing the seized one cannot reveal any information about them isn't already public. If you mean Silk Road users who sent him payments, again, accessing his wallet cannot reveal any information about that that isn't already public.



Now you are talking about access to the Silk Road's site's database. You do understand that that is not the same thing as a bitcoin wallet? I have no idea what kind of user information he maintained in his site, but even if he linked real names to wallet addresses, matching that information to payments to his wallet would not require accessing the wallet. Because, as above, all transactions to the wallet are already public.




The only thing accessing the wallet can allow them to do is empty it. Either move the balance to another wallet they control, or sell it for another currency. There are ways to make it impossible to lock an owner out of his wallet, but it doesn't appear that Russ Ulbricht did that for this one. Given that, the FBI doesn't need to move the balance to keep him from spending out of it.

Yes, I'm fully aware the database is not the wallet. I wouldn't know if the FBI knew the transactions were public, I would trust they'd know enough about wallet files to know that's where you find the transactions. They have lots of brilliant people there, but I've learned a long time ago that managers don't often know technical details and are simply project management people who use phrases like LEAN events or Six Sigma. What I will say is that I highly doubt the FBI is interested in selling bitcoins. I also pointed out that selling large amounts of bit coins tends to tank the market making subsequent bitcoins worth less.

And no, I'm not a developer on the project and don't know/understand nearly what they do. I do, however, understand bitcoins and have used them myself. I think it's a fun experiment and I expect one of the other cryptocurrencies to eventually replace it unless zerocoin is made part of the main protocol and takes on popularity.

 

[s-works]

The whole point was to shut down Silk Road. Using seized funds would certainly be a nice bonus, but the takedown wasn't motivated by a lust for BTC.

Honestly, BTC is a joke. It astonishes me that so many people take it seriously. We'll see how well it's regarded in a few years.

Just a fad like twitter, facebook, and pockets...lol..pockets.

 

[Streak]

Just a fad like twitter, facebook, and pockets...lol..pockets.

I think cryptocurrency will be popular if nothing else as a replacement for **** like Paypal...so long as the exchanges are somewhat forgiving on the fees.