A__ Posted June 13, 2014 Share Posted June 13, 2014 http://rt.com/usa/165692-bitcoin-silk-road-siezed/ It would be better for more 'law-abiding' Bitcoin holders if the confiscated coins were totally destroyed. This is certainly not a fair way to distribute the loot. And since the government basically stole it, why don't they just keep it? Curious. Link to comment Share on other sites More sharing options...
Kevin Beal Posted June 13, 2014 Share Posted June 13, 2014 (edited) This is just my theory. (Contains factual errors) They won't keep it because they never technically "seized" anything. The original owner (or a friend of his) could just take it back at any time if he has any copies of his keys lying around, which I'm certain he does if he's holding millions of dollars. He could transfer it into a mixing service and put it into another wallet. The only reason it hasn't been done yet (probably) is because it's risky. They'd have to do it right so it doesn't lead back to anyone and in a way that it isn't obvious that he (or a friend) suddenly has a bunch of money. They are auctioning it off because they know a spiteful bitcoiner could get away with it and they want at least some kind of compensation for their evil. Edited June 14, 2014 by Kevin Beal Link to comment Share on other sites More sharing options...
A__ Posted June 13, 2014 Author Share Posted June 13, 2014 Interesting, thanks for sharing the theory. That would be cool if it happened. Link to comment Share on other sites More sharing options...
ausppc Posted June 14, 2014 Share Posted June 14, 2014 ... why don't they just keep it? They're keeping the value but they want that value in a form that is more familiar to them. I'm curious how this kind of thing is accounted for... I can just picture a ledger entry somewhere that reads something like 'Seized items' but I can't think of any legitimate businesses that would have ledger entries like that. Goes to show it's good to be the king. Link to comment Share on other sites More sharing options...
ribuck Posted June 14, 2014 Share Posted June 14, 2014 Kevin, I invite you to retract your post, which is factually wrong on several counts. After the server was seized, the feds transferred the bitcoins to their own wallet. Therefore, your hypothetical "spiteful bitcoiner" could do nothing, nor could the people who previously had possession of the private keys for that stash. More interesting is the idea that the seized coins are "stolen money", and the community could blacklist those coins. I don't see that happening, however, as most bitcoiners strongly oppose to blacklisting (because they value the fungibility of bitcoins). This is certainly not a fair way to distribute the loot. And since the government basically stole it, why don't they just keep it? It's certainly not fair. Selling such large tranches keeps out all but the largest players, therefore the price received is likely to be well below market value. I wouldn't be surprised if the government does intend to keep much of it. Perhaps some of the bidders are front companies for the CIA or other three-letter agencies. Link to comment Share on other sites More sharing options...
Kevin Beal Posted June 14, 2014 Share Posted June 14, 2014 Kevin, I invite you to retract your post, which is factually wrong on several counts. After the server was seized, the feds transferred the bitcoins to their own wallet. Therefore, your hypothetical "spiteful bitcoiner" could do nothing, nor could the people who previously had possession of the private keys for that stash. I was not aware of that. Thank you for the correction! Link to comment Share on other sites More sharing options...
Brentb Posted June 15, 2014 Share Posted June 15, 2014 I'm guessing that they're just selling the coins this way to simplify the accounting. Would you rather have to deal with a ledger of 10 transactions of 3000 bitcoins or roughly 6 million transactions of variable bitcoin amounts that would result from selling on the open market? Between bankers, hedge fund managers, and silicon valley geeks, the price will probably get bid up to at least 90% of the market price. Especially considering that there are bitcoin ETFs coming to the stock market. Link to comment Share on other sites More sharing options...
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