US Government's bitcoin bonanza: Learn the tricks of trade...

Discussion in 'General Discussion' started by stg58, Jan 19, 2014.

  1. stg58

    stg58 Monkey+++ Founding Member

    I am still sitting on the sidelines of the Bitcoin game...

    US prosecutors in Manhattan are sitting on a multimillion-dollar bitcoin gold mine. And it could get much bigger.

    Federal authorities hauled in 29,655 units of the digital currency - worth $27 million at current exchange rates - through an official forfeiture by Bitcoin this week.

    The bitcoins had belonged to Silk Road, an anonymous online black market that authorities say was a conduit for purchases of drugs and computer hacking services - even a place where assassins may have advertised. It was shuttered after an FBI raid in September, when agents took control of its server and arrested the man they say was its founder in San Francisco.

    No one stepped forward to claim these bitcoins, which were found in electronic "wallets" used to store the digital currency. An additional 144,336 bitcoins, worth more than $128 million today, were also discovered, but the government's claim on them is being disputed by Ross William Ulbricht, 29, who U.S. authorities say was the founder and main operator of Silk Road.

    They had been stashed on his laptop. It all puts authorities in an unusual position, given their concerns about the way in which bitcoins and other digital currencies are used by criminals to circumvent regulations intended to prevent money laundering.

    By trading in bitcoins, the government could give the currency some legitimacy. Bitcoin is essentially software code that defines units of value, which users can move back and forth among themselves. Unlike other virtual money transmitters, its value isn't pegged to a hard currency like the dollar or the euro; it is determined by the demand for bitcoins.

    The U.S. Marshals Service, which is in charge of liquidating such seized assets, will have to decide whether to sell the units on a Bitcoin exchange or find a private buyer, perhaps through an auction. A spokeswoman for Preet Bharara, the U.S. Attorney for New York's Southern District, said Friday that the government is still trying to decide what to do with the forfeited bitcoins.


    Theft of bitcoin means someone completed an unauthorized transfer of bitcoins out of the authorized user's wallet. Protection of the bitcoin wallet means protecting the private key used to unlock the wallet. Thefts happen when a thief gains access to the private keys of the bitcoin wallet.[124] Most large scale thefts occur at payment processors, exchanges or online wallet services that store private keys of many bitcoin users. The thief hacks an online wallet services by finding a bug in that website or spreading malware to computers holding the private keys.[125][126] When they have control of the website or its database, they gain access to private keys of many users and those users' bitcoin can now be stolen.

    Theft of bitcoins has happened on a regular basis. Generating and storing keys offline mitigates such risks, however.[127] In addition to theft, bitcoins can be lost. One user lost £4.0m when he inadvertently discarded a hard drive storing 7,500 bitcoins.[128]

    In late November 2013, as many as 96,000 bitcoins were stolen from the online drug website "Sheep Marketplace".[129] Users were able to track and trace the theft although the thief made efforts to launder transactions through a process called "tumbling".[130] Although the coins were successfully traced they have not yet been recovered.[131]

    Unauthorized mining
    In June 2011, Symantec warned about the possibility of botnets engaging in covert mining of bitcoins.[119] Some malware used the parallel processing capabilities of GPUs built into many modern video cards.[120] In mid-August 2011, Bitcoin mining botnets were detected again,[121] and less than three months later Bitcoin mining trojans infecting Mac OS X were also discovered.[122] In April 2013 electronic sports organization E-Sports Entertainment was accused of hijacking 14,000 computers to mine bitcoins; the case was settled in November with the organization fined US$1 million if it breaks the law within the following ten years or $325,000 if it does not.[123]

    Bitcoin - Wikipedia, the free encyclopedia

    US Government's bitcoin bonanza: Learn the tricks of trade - Money - DNA
  2. DarkLight

    DarkLight Live Long and Prosper - On Hiatus

    The government wants the money associated with the Bitcoins but in actuality, what they should do is publicly destroy the wallets. Now, no, I'm not saying that would be good for Bitcoin, quite the opposite. It would inflate the value of the existing Bitcoins to some degree but it would also take them permanently out of circulation.

    If .gov really wants to kill it they should be trying to permanently destroy, not hold onto, as many Bitcoins/wallets as they could get their grubby little paws on. They would have to nuke a LOT of wallets though to have a noticeable impact.
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