Millions of dollars worth of Bitcoins seized from the owners of Silk Road

Ross Ulbricht, the alleged owner of Online Drug Marketplace Silk Road was arrested last year. When he was arrested, authorities claim he was logged into the website as his online alias Dread Pirate Roberts, also known as DPR.; Mr Ulbricht still denies this allegation. At the time of the arrest, a number of Bitcoins were seized, which amounted to around $28m.

When taken to court to face the charges levied against him, Mr Ulbricht denied involvement in any of the charges; U.S. District Judge Kevin N. Fox denied bail due to the seriousness of the charges.

When the site was shut down, all the Bitcoins in the sites wallet were also seized; prosecutors say these coins were used to help facilitate money laundering through the site. US prosecutor Preet Bharara said "We continue our efforts to take the profit out of crime and signal to those who would turn to the dark web for illicit activity that they have chosen the wrong path, these Bitcoins were forfeited not because they are Bitcoins, but because they were, as the court found, the proceeds of crimes"

Silk Road used Bitcoins as the way to pay for online services due to the easiness to hide the users executing the transactions. After the arrest, an additional 144,336 Bitcoins were seized that now amount to almost $130m, these were taken from a wallet that was stored on Mr Ulbrichts own computer not within silk road. There is no registry of Bitcoin wallets, so it is now down to the court to decide if the coins will be considered as being part of the proceeds from Silk Road.

Source: BBC | Image courtesy of Silk Road

 

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I wouldn't think TOR would be untraceable.... I mean, each link knows the link before and the link after... So authorities would need to essentially work their way back from the end of the chain to find the beginning. Doesn't sound "impossible".... just sounds rather time consuming.

Ironic for those who know something about drug trafficking. The U.S. Govt in one form or another is THE largest drug cartel...and has been for many many years. Now back to our regularly sponsored propaganda.

one would think that a drug lord would have "worse case scenarios" plans in place for his money. I am pretty sure that there are tons of off shore services available

I apologize for my bitcoin ignorance, but how exactly do they seize bitcoins...which are digital? How do they gain access to the digital wallet?

Bitcoins exist on a physical storage medium like a hard drive. They aren't stored on "the cloud" or anything like that. If you lose a hard drive with your Bitcoins on it, you lose your Bitcoins.

Lord Method Man said,
Bitcoins exist on a physical storage medium like a hard drive.

Can they be replicated / backed up? Example: If i have 1 bitcoin, can I have it stored on my computers hard drive and backed up on a USB?

The cryptographic (private) key can be stored in as many places as you want, infact it`s become commonplace for people to store the info on external storage so no one can easily access it or even and/on paper.

2 things here: those Bitcoins exist in the entire Bitcoin network, not on his own personal computer. Bitcoins are stored in the blockchain, so everyone that is part of the Bitcoin network has a copy of the ledger that states that those 144k bitcoins are his.
Which means: unless the feds that took the wallet went forward and transferred those coins to another wallet owned by them, anybody else with knowledge of the private key can do so and leave the feds with 0 coins (a friend or business partner could be saving his ass right now).

The magic of bitcoins is that you cannot seize them, you can only seize a copy of a private key that gives you "shared" access to a piece of the pie.

"After the arrest, an additional 144,336 Bitcoins were seized that now amount to almost $130m, these were taken from a wallet that was stored on Mr Ulbrichts own computer"

Ouch, silly. He should have taken his money and quit that game long before the authorities caught up with him. Fail.

With that they will buy a lot of drugs for themselves, they've just been using their authority to cut out the middlemen. Good job!

Edited by Phouchg, Jan 17 2014, 5:45pm :

that is an awesome photoshop job courtesy of the taxpayers BTW. look at the drop shadow and background art.

your money at work.

I'd say yes and no. It depends, I guess, because it doesn't clearly obey the laws of classical currencies. That incident could be called destruction of "capital". The bitcoin money base is shrunk, someone lost his money and the world keeps moving without the currency itself being too much affected. Just like the dollar and the euro in the 2008-2010 crisis, their value didn't get altered much, yet a capital distruction occured.
After all, the bitcoin has an FX exchange market, trading against the $ and the major currencies - that is as far as I've heard.

So every time bitcoins are seized they will never be readded to the pool, doesn't this technically make every other bitcoin more valuable?

SierraSonic said,
So every time bitcoins are seized they will never be readded to the pool, doesn't this technically make every other bitcoin more valuable?

yes lol

Almost 1% of the total number of bit coins are more or less "frozen". That's quite a bit (I'm assuming the total bitcoins is 20 millions, im going off my memory here)