Feds About To Auction Off Silk Road's $28 Million Bitcoins

[Karloff]

Feds About To Auction Off Silk Road's $28 Million Bitcoins

29,655 Bitcoins will be sold, but Ulbricht might be able to hang onto his private stash.

Ross William Ulbricht, aka Dread Pirate Roberts the operator of Silk Road, was caught out last year when the FBI arrested him and seized control of his website. That seizure included a substantial wallet full of Bitcoin, and now the Manhattan U.S. Attorney's Office has announced the forfeiture of Silk Road's entire stash, which will be sold at auction. How big is that wallet? About $28 million big, or 29,655 Bitcoin.

"We have not yet determined exactly how the Bitcoins will be converted and liquidated," says Manhattan U.S. Attorney Office spokesperson Jim Margolin [http://www.forbes.com/sites/kashmirhill/2014/01/16/the-feds-are-ready-to-sell-the-silk-road-bitcoin-kind-of/?utm_source=kwestin&utm_medium=twitter]. The U.S. Marshals service will probably have the honor, and all proceeds will end up in the U.S. Treasury at some future date. However this stash pales in comparison to the 144,000 Bitcoin wallet taken from Ulbricht, which he claims is his personal property.

Ulbricht has filed a claim contesting that his wallet has nothing to do with the Silk Road. Since the only reason the Feds can auction off Silk Road's stash is because it's the proceeds of illegal activity, if Ulbricht is successful he may be able to keep his Bitcoin. However anyone else involved in the Silk Road debacle is out of luck, even if their Bitcoin wasn't used to buy narcotics and Trojans. Any Bitcoin in the Silk Road wallet, however it got there, is assumed to have been used to facilitate money laundering.

"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," says Manhattan U.S. Attorney Preet Bharara [http://www.justice.gov/usao/nys/pressreleases/January14/SilkRoadForfeiture.php].

Source: Ars Technica [http://arstechnica.com/tech-policy/2014/01/feds-ready-to-auction-off-25-million-in-silk-road-bitcoin/]


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[The World Famous]

Journalism 101: Explain who you're talking about.
Even if it's just a sentence at the end that says "Silk Road is this and that" that'd be awesome, because then I would know why I should care about Ross William Ulbricht.

 

[Risenfire]

Journalism 101: Explain who you're talking about.
Even if it's just a sentence at the end that says "Silk Road is this and that" that'd be awesome, because then I would know why I should care about Ross William Ulbricht.

I too am a little confused as to what this is about, other than the government auction of bitcoins...research time...

several minutes later..
ok so looks like silk road was an anonymous online market place for about anything you could every want/need, but couldn't get legally. drugs, murder for hire, ect. Ross apparently founded and ran the site.

personally, I doubt the 144,000 bitcoins that were his "personal property" were not related to his business.

 

[razer17]

You know, Silk Road was just a market place. And you could sell whatever you wanted on there, not just illegal stuff (granted, most of it was illegal). So unless they link up each bitcoin with a specific purchase, how do they know that they were used in an illegal sale?

 

[The World Famous]

Journalism 101: Explain who you're talking about.
Even if it's just a sentence at the end that says "Silk Road is this and that" that'd be awesome, because then I would know why I should care about Ross William Ulbricht.

I too am a little confused as to what this is about, other than the government auction of bitcoins...research time...

several minutes later..
ok so looks like silk road was an anonymous online market place for about anything you could every want/need, but couldn't get legally. drugs, murder for hire, ect. Ross apparently founded and ran the site.

personally, I doubt the 144,000 bitcoins that were his "personal property" were not related to his business.

I have now gained more information from the comments section than from the article itself. That's a bad sign.

 

[Albino Boo]

You know, Silk Road was just a market place. And you could sell whatever you wanted on there, not just illegal stuff (granted, most of it was illegal). So unless they link up each bitcoin with a specific purchase, how do they know that they were used in an illegal sale?

The court has been supplied with sufficient evidence that silk road was engaged in illegal activity, i.e. the listings for crack,meth etc. At which point the burden of proof shifts to silk road to prove what money was obtained legally and seeing silk road deliberty did not keep records, for obvious reasons, then all monies and assets can be taken. Reputable business have to keep records for 7 years for tax reasons.

 

[Seydaman]

Oh, Silk Road the drug selling website.

I thought you were talking about the MMO and I was really confused.

Interesting.

 

[razer17]

You know, Silk Road was just a market place. And you could sell whatever you wanted on there, not just illegal stuff (granted, most of it was illegal). So unless they link up each bitcoin with a specific purchase, how do they know that they were used in an illegal sale?

The court has been supplied with sufficient evidence that silk road was engaged in illegal activity, i.e. the listings for crack,meth etc. At which point the burden of proof shifts to silk road to prove what money was obtained legally and seeing silk road deliberty did not keep records, for obvious reasons, then all monies and assets can be taken. Reputable business have to keep records for 7 years for tax reasons.

Well, obviously this is not a reputable business. I thought the money they kept (and that was then confiscated) was the escrow accounts, since Silk Road used an escrow system of some sort. So it doesn't belong to Silk Road as such, but to whoever was trying to buy something.

Then again, although you can sell legal things on there, I'm guessing 99.5% of it wasn't legal, and I doubt anyone who was just trying to buy some heroin is going to go and ask the Feds for their cash back.

 

[Albino Boo]

You know, Silk Road was just a market place. And you could sell whatever you wanted on there, not just illegal stuff (granted, most of it was illegal). So unless they link up each bitcoin with a specific purchase, how do they know that they were used in an illegal sale?

The court has been supplied with sufficient evidence that silk road was engaged in illegal activity, i.e. the listings for crack,meth etc. At which point the burden of proof shifts to silk road to prove what money was obtained legally and seeing silk road deliberty did not keep records, for obvious reasons, then all monies and assets can be taken. Reputable business have to keep records for 7 years for tax reasons.

Well, obviously this is not a reputable business. I thought the money they kept (and that was then confiscated) was the escrow accounts, since Silk Road used an escrow system of some sort. So it doesn't belong to Silk Road as such, but to whoever was trying to buy something.

Then again, although you can sell legal things on there, I'm guessing 99.5% of it wasn't legal, and I doubt anyone who was just trying to buy some heroin is going to go and ask the Feds for their cash back.

The article states that its money in silk roads wallet, so I guess its profits of the trade that was still in the business when it closed down. Also, unless the escrow was held by a 3rd party, it counts as an asset of the company.

 

[Deathfish15]

Oh, Silk Road the drug selling website.

I thought you were talking about the MMO and I was really confused.

Interesting.

Same thought I had. Here in my mind I was like "wait a second, an MMO was used as a free-range marketplace for drug selling while using digital currency exchange to real currency?". Really had me questioning why people choose Silk Road over 2nd Life for that.....