Secret Service Agent Sentenced In Scheme Related To Silk Road Investigation(justice.gov)
justice.gov
Secret Service Agent Sentenced In Scheme Related To Silk Road Investigation
https://www.justice.gov/usao-ndca/pr/former-secret-service-agent-sentenced-scheme-related-silk-road-investigation
124 comments
It will be newsworthy even 5000 years from now just as some things from 5000 years ago are news worthy today. Power. Corruption and all.
Personally, I would be surprised to read about well-documented theft committed by ancient Pharaohs in tomorrow's newspapers.
I'm reminded of the 3750 year old customer complaint letter: https://en.wikipedia.org/wiki/Complaint_tablet_to_Ea-nasir
That's so good. That offers such an insight into lives from long ago. It's weird how I suddenly felt so attached to the business frustrations of the ancient babylonians!
Apologies, I've stolen it myself https://news.ycombinator.com/item?id=15669759
Apologies, I've stolen it myself https://news.ycombinator.com/item?id=15669759
The sad thing is none of the customer complaints of today will ever last as long as that did due to the lack of long term storage devices.
We really need a long term storage solution for our data as a society or risk having another period of dark ages in the future.
We really need a long term storage solution for our data as a society or risk having another period of dark ages in the future.
I'd like to!
Can Pharaoh steal anything? Wouldn't that be more of a personalised tax at the time? Compared to killing servants so they can help the Pharaoh in the afterlife, theft is kind of meh...
Let me explain: people who have a chance to steal (or another word) will do so. Of course will I get caught, chances of that, possible stealing...will be calculated.
Some steal little, some steal as much as the can. Some will get caught, others will get medals
Some steal little, some steal as much as the can. Some will get caught, others will get medals
Isn't it simply theft and punishment. Not sure how newsworthy are 5000 year old thefts.
Hmmm...someone in ancient Egypt--via state connections--had the chance to steal xx kg ok gold simply by using his position and did it...
The empty tombs and records of people supposed to be guarding them would suggest it happened quite a lot...
[deleted]
Agreed about the clickbait title - he didn't steal from the Silk Road wallet:
"Bridges was arrested and taken into custody on charges related to the theft of approximately 1,600 bitcoin from a digital wallet belonging to the U.S. government"
>he didn't steal from the Silk Road wallet
The authors are simplifying, at the time he stole the coins they belonged to the Silk Road. Later the U.S. seized all bitcoins belonging to the Silk Road. Bridges lied about the coins and never gave the coins back to the govt, hence the theft.
The authors are simplifying, at the time he stole the coins they belonged to the Silk Road. Later the U.S. seized all bitcoins belonging to the Silk Road. Bridges lied about the coins and never gave the coins back to the govt, hence the theft.
This is a new crime.
The original crimes he plead guilty to in 2015 and was sentenced (money laundering, obstruction of justice). This new crime he plead guilty to a few months ago and was sentenced this week (money laundering).
The new crime is that after he had plead guilty in the 2015 case he was out on bond awaiting sentencing. During that time he took a backup of the Bitcoin private key for the 1,600 Bitcoin the USG had seized from him and moved them to an offshore account.
The USG went to sell or move the Bitcoin they had seized from Bridges and found all of the addresses empty
He was caught (again) and plead guilty (again) - and this time handed over all of his keys and hardware wallet and returned the 1,000 (on a hardware wallet) + 600 (in a market account) coins
As an aside - the obstruction of justice charge is insane. In his first theft, he transferred some coins to a personal MtGox account. He later learned that the USG was investigating MtGox and knew that eventually they would discover his MtGox account if it was seized. So he transferred his MtGox coin out and then sent them a seizure notice so that they would be tipped off to the investigation.
It had its intended affect - the DOJ called off its investigation into MtGox (this was mentioned in sentencing memo)
Ars do a good summary of the new charges and some of the other aspects of the case:
https://arstechnica.com/tech-policy/2016/07/corrupt-agent-wh...
edit: To add, we don't get many technical details of this case because of the plea - but i'm curious to know for certain how they traced the second theft back to Bridges and how they found his new Bitfinex account. It isn't hard to believe they always suspected he had taken them, and then worked backwards looking at his movement etc. - but for now we can mostly only speculate
Here is what we do know. A day before he was supposed to hand himself in, he was raided and they found id documents, offshore corporate records, a new passport, citizenship applications for his wife for a third country, a macbook with serial number filed off, etc. Its likely they subpoenaed bitcoin markets for those offshore entity names. It also looked like he was going to run:
http://ia601308.us.archive.org/17/items/gov.uscourts.cand.28...
The original crimes he plead guilty to in 2015 and was sentenced (money laundering, obstruction of justice). This new crime he plead guilty to a few months ago and was sentenced this week (money laundering).
The new crime is that after he had plead guilty in the 2015 case he was out on bond awaiting sentencing. During that time he took a backup of the Bitcoin private key for the 1,600 Bitcoin the USG had seized from him and moved them to an offshore account.
The USG went to sell or move the Bitcoin they had seized from Bridges and found all of the addresses empty
He was caught (again) and plead guilty (again) - and this time handed over all of his keys and hardware wallet and returned the 1,000 (on a hardware wallet) + 600 (in a market account) coins
As an aside - the obstruction of justice charge is insane. In his first theft, he transferred some coins to a personal MtGox account. He later learned that the USG was investigating MtGox and knew that eventually they would discover his MtGox account if it was seized. So he transferred his MtGox coin out and then sent them a seizure notice so that they would be tipped off to the investigation.
It had its intended affect - the DOJ called off its investigation into MtGox (this was mentioned in sentencing memo)
Ars do a good summary of the new charges and some of the other aspects of the case:
https://arstechnica.com/tech-policy/2016/07/corrupt-agent-wh...
edit: To add, we don't get many technical details of this case because of the plea - but i'm curious to know for certain how they traced the second theft back to Bridges and how they found his new Bitfinex account. It isn't hard to believe they always suspected he had taken them, and then worked backwards looking at his movement etc. - but for now we can mostly only speculate
Here is what we do know. A day before he was supposed to hand himself in, he was raided and they found id documents, offshore corporate records, a new passport, citizenship applications for his wife for a third country, a macbook with serial number filed off, etc. Its likely they subpoenaed bitcoin markets for those offshore entity names. It also looked like he was going to run:
http://ia601308.us.archive.org/17/items/gov.uscourts.cand.28...
24 Months for this is crazy. He stole 10.4 million dollars of goods. He tipped off about another case coming against MtGox and knowingly continued these activities after being caught.
I think this just shows the weakness of out sentencing guidelines. People with a thousand dollars of drugs get decades and this guy gets 2 years tacked on?
I think this just shows the weakness of out sentencing guidelines. People with a thousand dollars of drugs get decades and this guy gets 2 years tacked on?
The problem here is the decades...
24 Months for this is crazy
No it isn't. It's USA, snatch a chain (not trivial considering the trauma to the people but still...) while having a gun and you may get 99 years (Texas). Steal millions or billions and get a sentence of months.
No it isn't. It's USA, snatch a chain (not trivial considering the trauma to the people but still...) while having a gun and you may get 99 years (Texas). Steal millions or billions and get a sentence of months.
It looks ridiculous on paper, but it does make sense in the grand scheme of things.
Aggravated assault/battery gone wrong has permanent consequences. Whether it's a $3 chain, a $3k necklace or a $30k car, when I steal it at gunpoint, an error in execution can result in loss of life. Life is not replaceable. There is no justice to be had, even if I'm caught.
An embezzlement or scam gone wrong results in a few more digits than intended getting shuffled around and an insurance claim gets filed; if it falls through maybe a company goes under, a retirement fund/livelihood is ruined but in the end, all the players victimized are free to try living again in some capacity and/or try to seek restitution. That's what justice is supposed to entail.
Knowing crime is a predictable behavior, we are much better off as a society guiding determined criminals towards the lesser consequences of white collar crime.
Would you rather someone open a $300k HELOC in your name or potentially kill you for the $20 in your wallet?
Aggravated assault/battery gone wrong has permanent consequences. Whether it's a $3 chain, a $3k necklace or a $30k car, when I steal it at gunpoint, an error in execution can result in loss of life. Life is not replaceable. There is no justice to be had, even if I'm caught.
An embezzlement or scam gone wrong results in a few more digits than intended getting shuffled around and an insurance claim gets filed; if it falls through maybe a company goes under, a retirement fund/livelihood is ruined but in the end, all the players victimized are free to try living again in some capacity and/or try to seek restitution. That's what justice is supposed to entail.
Knowing crime is a predictable behavior, we are much better off as a society guiding determined criminals towards the lesser consequences of white collar crime.
Would you rather someone open a $300k HELOC in your name or potentially kill you for the $20 in your wallet?
Yes, I would rather be mugged and have someone take $20 from my wallet than have someone take my entire retirement. Perhaps for you "a few digits" off your retirement isn't a huge issue because you can just send more money in, but that isn't true for the majority of the population.
The reason for these harsh sentences isn't because they were "risking someone else's life", if it were we would have similar penalties for drunk driving.
The basis for these disparities are clearly classism, racism and political fear mongering.
The reason for these harsh sentences isn't because they were "risking someone else's life", if it were we would have similar penalties for drunk driving.
The basis for these disparities are clearly classism, racism and political fear mongering.
Not everybody survives muggings, carjackings or home invasions, even when they comply. It's a choice between paying $20 to play Russian Roulette with a twitchy felon on the side of the road, or being scammed out of $300k and walking away. If you only look at the financial outcomes, of course it's an easy choice to make.
I only have so many working years left. Not enough to recover from such a scenario. But I'd still choose to be old and destitute than risk orphaning my children for want of $20. Keyword being risk-- I'm aware most muggings do not end violently.
A loss of your retirement funds could just as easily happen due to general economic instability. Medical bills. Bain Capital. But you get to try to pick up the pieces however you can...because however your loss was incurred, it didn't actually kill you.
The basis for these disparities has more to do with criminal intent than you're admitting...and everybody wanting tougher DUI laws until they get charged with one.
I only have so many working years left. Not enough to recover from such a scenario. But I'd still choose to be old and destitute than risk orphaning my children for want of $20. Keyword being risk-- I'm aware most muggings do not end violently.
A loss of your retirement funds could just as easily happen due to general economic instability. Medical bills. Bain Capital. But you get to try to pick up the pieces however you can...because however your loss was incurred, it didn't actually kill you.
The basis for these disparities has more to do with criminal intent than you're admitting...and everybody wanting tougher DUI laws until they get charged with one.
> Not everybody survives muggings, carjackings or home invasions, even when they comply. It's a choice between paying $20 to play Russian Roulette with a twitchy felon on the side of the road, or being scammed out of $300k and walking away. If you only look at the financial outcomes, of course it's an easy choice to make.
That is pretty obvious and condescending to say. Obviously everyone has a different risk preference. I was responding to a question (which was attempting to be rhetorical), not trying to tell you what your risk preference should be.
> The basis for these disparities has more to do with criminal intent...
If the basis for the disparities is criminal intent, then we wouldn't have seen the 2 year sentence for stealing 10 million dollars that is under discussion.
A mugging for $20 has less criminal intent than a $10MM white collar crime and muggings kill far fewer people every year than drunk drivers.
Disparities in punishments are highly driven by political fear mongering, classism and racism. (though this has somewhat lessened in recent years)
That is pretty obvious and condescending to say. Obviously everyone has a different risk preference. I was responding to a question (which was attempting to be rhetorical), not trying to tell you what your risk preference should be.
> The basis for these disparities has more to do with criminal intent...
If the basis for the disparities is criminal intent, then we wouldn't have seen the 2 year sentence for stealing 10 million dollars that is under discussion.
A mugging for $20 has less criminal intent than a $10MM white collar crime and muggings kill far fewer people every year than drunk drivers.
Disparities in punishments are highly driven by political fear mongering, classism and racism. (though this has somewhat lessened in recent years)
It simply reflects social priorities. If physical violence were tolerated as commonplace and had few deterrents then a lot of people would feel much more unsafe all the time.
I wonder if you have ever lived day to day in a place where a few wrong words to virtually anyone would get you beaten with zero consequences to the attacker. I have and I absolutely don't miss it vs. living today in a place with virtually absolute physical safety but a more wild west financial industry.
I wonder if you have ever lived day to day in a place where a few wrong words to virtually anyone would get you beaten with zero consequences to the attacker. I have and I absolutely don't miss it vs. living today in a place with virtually absolute physical safety but a more wild west financial industry.
My apologies, your response made it seem like you were ignoring key factors in the question.
> If the basis for the disparities is criminal intent, then we wouldn't have seen the 2 year sentence for stealing 10 million dollars that is under discussion.
Look at your state's sentencing guidelines for larceny. To use California's as an example, it doesn't matter if I steal $20 (petty larceny) or $20M (grand theft). Either way, it's the same crime, differing only in scale, and the sentencing guidelines proscribe probation to 3 years in prison, depending on the severity. Thus, a 2 year sentence for stealing 10 million dollars is an expected outcome. That is the punishment for larceny with criminal intent. Not having criminal intent gets its own category (receiving of stolen property) and sentencing of up to 1 year. 2 years is a long time to be institutionalized; it's not a trivial sentence. We often lose sight of that.
If I choose to muck things up by bringing a weapon into the mix and turning it into aggravated assault or robbery, the sentencing changes drastically. Nobody wants aggravated crime in their neighborhood, but we can tolerate a Madoff or Shkreli on the streets, even if their net damage is worse. This isn't about race or class, it's about what type of offender is less likely to be an immediate danger to our health and safety. Can a violent offender be rehabilitated? We don't know, and nobody wants to find out. So we lock them up for 99 years and revisit the matter once they're senile.
> A mugging for $20 has less criminal intent than a $10MM white collar crime and muggings kill far fewer people every year than drunk drivers.
You're comparing three different things. Theft is theft. If you intend to steal anything, it's criminal intent. Threatening your victim or pointing a gun at them demonstrates even more criminal intent. Drunk drivers have no intent, they are drunk.
As destructive as drunk driving is, I meant what I said about everybody wanting more restrictive sentences until they find themselves on the wrong end of these laws. It doesn't take much to get charged with DUI, and even if nobody got hurt it's still career-ending. You did something you shouldn't have, there were no victims, but your life is now radically altered for the worse. It boils down to a tragically negligent decision, not criminal intent, which is why in the best of cases you end up on probation with misdemeanor charges and losing your job, in other cases Joe Sixpack hitting a pedestrian gets sentenced for manslaughter and the guy who deliberately drove into protesters is facing murder charges. There are distinct differences in intent and consequences for our actions. We sentence in line with them.
I'd agree that the sentencing for DUI fatalities is lighter than it should be (as it lets politicians and debutantes off the hook when they get caught themselves), and policing of the drug wars has proven to be very clearly class- and race-driven, but I'm not seeing how disparities in sentencing guidelines are inherently discriminatory towards any demographic. The message is clear: shoplift if you must, but don't you dare stick a gun in the cashier's face. This applies to everyone.
> If the basis for the disparities is criminal intent, then we wouldn't have seen the 2 year sentence for stealing 10 million dollars that is under discussion.
Look at your state's sentencing guidelines for larceny. To use California's as an example, it doesn't matter if I steal $20 (petty larceny) or $20M (grand theft). Either way, it's the same crime, differing only in scale, and the sentencing guidelines proscribe probation to 3 years in prison, depending on the severity. Thus, a 2 year sentence for stealing 10 million dollars is an expected outcome. That is the punishment for larceny with criminal intent. Not having criminal intent gets its own category (receiving of stolen property) and sentencing of up to 1 year. 2 years is a long time to be institutionalized; it's not a trivial sentence. We often lose sight of that.
If I choose to muck things up by bringing a weapon into the mix and turning it into aggravated assault or robbery, the sentencing changes drastically. Nobody wants aggravated crime in their neighborhood, but we can tolerate a Madoff or Shkreli on the streets, even if their net damage is worse. This isn't about race or class, it's about what type of offender is less likely to be an immediate danger to our health and safety. Can a violent offender be rehabilitated? We don't know, and nobody wants to find out. So we lock them up for 99 years and revisit the matter once they're senile.
> A mugging for $20 has less criminal intent than a $10MM white collar crime and muggings kill far fewer people every year than drunk drivers.
You're comparing three different things. Theft is theft. If you intend to steal anything, it's criminal intent. Threatening your victim or pointing a gun at them demonstrates even more criminal intent. Drunk drivers have no intent, they are drunk.
As destructive as drunk driving is, I meant what I said about everybody wanting more restrictive sentences until they find themselves on the wrong end of these laws. It doesn't take much to get charged with DUI, and even if nobody got hurt it's still career-ending. You did something you shouldn't have, there were no victims, but your life is now radically altered for the worse. It boils down to a tragically negligent decision, not criminal intent, which is why in the best of cases you end up on probation with misdemeanor charges and losing your job, in other cases Joe Sixpack hitting a pedestrian gets sentenced for manslaughter and the guy who deliberately drove into protesters is facing murder charges. There are distinct differences in intent and consequences for our actions. We sentence in line with them.
I'd agree that the sentencing for DUI fatalities is lighter than it should be (as it lets politicians and debutantes off the hook when they get caught themselves), and policing of the drug wars has proven to be very clearly class- and race-driven, but I'm not seeing how disparities in sentencing guidelines are inherently discriminatory towards any demographic. The message is clear: shoplift if you must, but don't you dare stick a gun in the cashier's face. This applies to everyone.
> Yes, I would rather be mugged and have someone take $20 from my wallet than have someone take my entire retirement.
It's funny because I would make the exact opposite choice than you. Of course it isn't about just losing a $20 from my wallet, its about having a gun put on you.
I'd rather lose my retirement than have anyone I know be robbed at gunpoint. And I believe there are a lot of people agree with me which is why the law is like that in Texas.
It's funny because I would make the exact opposite choice than you. Of course it isn't about just losing a $20 from my wallet, its about having a gun put on you.
I'd rather lose my retirement than have anyone I know be robbed at gunpoint. And I believe there are a lot of people agree with me which is why the law is like that in Texas.
The law is not like that in texas because people are concerned with the risk of injury or death. If it were there would be a much harsher penalty for a first time DWI than:
"After your first DWI offense in Texas, you may be fined up to $2,000 and spend between three and 180 days in jail."
These differences in penalties are not due a rational fear of the associated risks.
"After your first DWI offense in Texas, you may be fined up to $2,000 and spend between three and 180 days in jail."
These differences in penalties are not due a rational fear of the associated risks.
a retirement fund/livelihood is ruined but in the end, all the players victimized are free to try living again in some capacity and/or try to seek restitution. That's what justice is supposed to entail.
Before or after the heart attack for losing everything? Rent is due tomorrow and restitution 4 years later doesn't help much
Before or after the heart attack for losing everything? Rent is due tomorrow and restitution 4 years later doesn't help much
False choice. Why can't both be locked up forever?
Yes, but I believe armed robbery is something very different as you intend or at least calculate the risk in to use your gun.
This was "only" theft and lying to police.
No one was physically threatened.
No one was physically threatened.
> a macbook with serial number filed off
This really tickled me for some reason. Does he know something that we don't?
This really tickled me for some reason. Does he know something that we don't?
That serial numbers are traceable to where and by who the device was bought? Nope, pretty sure everybody knows that. What this agent probably didn't know was that laptops aren't bikes and the serial number is available in more places. In OSX you can see it by simply going to the Apple menu > About this Mac.
I don't know how old the agent's MacBook was, but since at least 2012 most components have their own individual serial numbers that are associated with the computer. So even if someone too clever by half starts swapping the logic board your Apple computer will call home and get flagged if the numbers don't match.
He was convicted of stealing confiscated property. Maybe this computer was confiscated as well, maybe he stole it, and maybe it already had its serial number filed off.
How is that hardcoded into the device? It's not just on the drive somewhere. Is it changeable? Not something I'd really thought about before but maybe there's some way of changing it.
The serial number is burned into the motherboard. At least in the case of Lenovo laptops I've dealt with, it seems to be possible to modify. When we send machines for repair, if they replace the motherboard it comes back with the same serial number we sent in. In some cases, we've been sent systems without serial numbers and they refuse to boot.
My 2010 MBP came without a serial number burned into it. It was causing trouble when I tried to use things like Facetime from the Mac because apparently the protocol depends on this serial number. I had to download a utility and burn it to CD, boot the CD and flash a serial number of my choice. I was tempted to go with 0000000001...
I've had that after a repair (2007 MBP logic board replacement). Facetime refused to work without a serial number.
Usually its on the logic board.
Usually it's quite literally burned into a ROM chip.
[deleted]
>A day before he was supposed to hand himself in, he was raided
If you're fleeing the country to evade imprisonment, why would you wait until the day before you're to be taken into custody to do it?
If you're fleeing the country to evade imprisonment, why would you wait until the day before you're to be taken into custody to do it?
It's mostly the stupid criminals who make the news. Otherwise they would get away and for reasons of ongoing investigations, there would be no news.
[deleted]
Offshore account? As in transfer his wallet credentials to some safe offshore vault?
This word sounds scarier than what it means in 2017, especially in the context of crypto-currencies. An HTTP request to a BTC wallet server in any foreign country could be an 'transfering to an offshore account'. No banks are storing BTC for you AFAIK, no money would be transferred via Swift or other formal means.
And it wouldn't make sense for someone about to go to jail for BTC related crimes to be mailing an encrypted thumb drive to a safe deposit box in a foreign country...
And it wouldn't make sense for someone about to go to jail for BTC related crimes to be mailing an encrypted thumb drive to a safe deposit box in a foreign country...
In this case the BTC wasn't his to begin with so he had zero rights to do anything with it.
He spent the bitcoins to a new UTXO that the Feds didn't have access to. Since these "accounts" exist on the block chain, which is replicated on computers all over the world, I guess every account is an offshore account.
What's most fascinating to me is that the sentencing for bitcoin theft lends credence to its legitimacy as a currency.
Bitcoin is taxed the same as personal property, so when you sell it for a profit you have to pay capital gains taxes. That leads me to believe that there is already legal recognition of a virtual currency as property, but not necessarily currency.
yeah, honestly i don't get it. I thought the feds had already explicitly declared that bitcoin wasn't valid currency. How can you do "money laundering" by taking something that isn't a currency and moving its location, and at no point converting it into something that is recognized as currency?
> I thought the feds had already explicitly declared that bitcoin wasn't valid currency.
No, they didn't. You are probably confusing a determination of what category it falls into in tax law as having a broader meaning that it does.
> How can you do "money laundering" by taking something that isn't a currency and moving its location, and at no point converting it into something that is recognized as currency?
The US “money laundering” statute concerns primarily “monetary instruments”, whose definition includes (among other things) “investment securities”. Nothing has to be or be converted to currency. See 18 U.S.C. § 1956.
No, they didn't. You are probably confusing a determination of what category it falls into in tax law as having a broader meaning that it does.
> How can you do "money laundering" by taking something that isn't a currency and moving its location, and at no point converting it into something that is recognized as currency?
The US “money laundering” statute concerns primarily “monetary instruments”, whose definition includes (among other things) “investment securities”. Nothing has to be or be converted to currency. See 18 U.S.C. § 1956.
For those who want to read more about the Silk Road story, including everything in this post, check out the book "American Kingpin" [0].
It's a great read and a real page turner. It tells you about Ulbricht, his accomplices, everyone chasing him, etc. Reads like a novel.
[0]: https://www.goodreads.com/book/show/31920777-american-kingpi...
It's a great read and a real page turner. It tells you about Ulbricht, his accomplices, everyone chasing him, etc. Reads like a novel.
[0]: https://www.goodreads.com/book/show/31920777-american-kingpi...
Having just finished this book about 2 months ago, I tend to agree. My only gripe is that the book is about 20% too long. There is a lot of what I call "fluffing", like when I had a book report with a simple topic and a high word-count minimum
Yeah if the book is too lengthy, the author also authored a series of articles for Wired (I believe) a couple years back that are pretty in depth and a great read and serve as the basis for the book. I highly recommend them.
Is this it? https://www.wired.com/2015/04/silk-road-1/
It's not written by him but it contains this:
>This article includes reporting by Nick Bilton, whose book on the Silk Road case will appear in 2016
It's not written by him but it contains this:
>This article includes reporting by Nick Bilton, whose book on the Silk Road case will appear in 2016
I would be very curious to know why he thought he would get away with this. Did he erroneously believe Bitcoin is anonymous? Have there been any interviews with the agent or those around him?
Call me cynical, but I don't believe it's uncommon for them to take forfeit money after an arrest. This time the only difference was that Bitcoin transactions could be publicly seen, as opposed to cash/wire transfer, and the agent wasn't aware of that.
> the agent wasn't aware of that
If thats the case, it's interesting that he wasn't aware of the fundamentals of the technology that enabled the people he was investigating.
If thats the case, it's interesting that he wasn't aware of the fundamentals of the technology that enabled the people he was investigating.
I personally know few quite technical people who even own some Bitcoins and tried to confront me in recent discussion when I stated that all BTC transactions can be publicly seen. They knew that BTC doesn't provide complete anonymity, but thought of it more like wire transfer, where you can only see transactions from some "authorized center", exchange or something, not that anyone can see them. So I guess this detail is easy to miss or misinterpret.
Is it? Criminals are often just dumb.
Well, you'd expect that the agents investigating those crimes would not be.
I'd expect agents to be organized and well versed in the goals and procedures of departments, not smarter or better at any random thing than any other human.
That normally wouldn't go directly to the agent though, right? So that's completely different.
I believe he was saying it's not uncommon for law enforcement officers to steal forfeitures from the state.
If you're the one accounting for an arrested individual's belongings, it's very easy to falsify documents.
If you're the one accounting for an arrested individual's belongings, it's very easy to falsify documents.
Bitcoin provides strong anonymity as long as you never tell anyone that wallet dcfb49fb16e688a46841c05b07b1ee40 is yours and never withdraw any money. "X is true if both Y and Z" is a UX problem waiting to happen. It's too subtle for people who check their smartphones every seven minutes, Y and/or Z will be lost in hearsay transmission.
Pseudoanonymity. There’s an important difference.
If you digress into talking about important distinctions using weird long words, people are especially likely to forget the Y&Z conditions.
Did you mean pseudoanonymity or pseudonymity, BTW? I can see the case for either/both, but the MSB is that is something hinges on distinctions as subtle as that, then it's too complex for 2017's general audience. UX accident waiting to happen.
Did you mean pseudoanonymity or pseudonymity, BTW? I can see the case for either/both, but the MSB is that is something hinges on distinctions as subtle as that, then it's too complex for 2017's general audience. UX accident waiting to happen.
It’s not a nitpicking point. Bitcoin doesn’t provide any anonymity at all. It explicitly breaks anonymity and great lengths have to be taken to recover it. Pseudonymity is a fundamentally different property.
Pseudonymity, actually.
I've seen cases thrown out for ALL of the reasons that Ross Ulbricht's lawyers brought up.
Such as when the government withholds evidence to allow the defense to properly mount a defense.
Such as when the investigators of the case were part of a corrupt money laundering and extortion scheme, where they steal money intended for the government and concoct schemes to make the defendant look worse to a jury even if they can't charge him with those things, but those things are also used in sentencing rationale.
Such as when those exact investigators can't be brought in as witnesses because they botched the whole investigation for multiple field offices and government agencies.
Ross had zero wins in his motions, in his sentencing, in his appeals.
Amazingly discretionary how all of this is.
Such as when the government withholds evidence to allow the defense to properly mount a defense.
Such as when the investigators of the case were part of a corrupt money laundering and extortion scheme, where they steal money intended for the government and concoct schemes to make the defendant look worse to a jury even if they can't charge him with those things, but those things are also used in sentencing rationale.
Such as when those exact investigators can't be brought in as witnesses because they botched the whole investigation for multiple field offices and government agencies.
Ross had zero wins in his motions, in his sentencing, in his appeals.
Amazingly discretionary how all of this is.
Because none of this changed the fact that Ross, and Ross alone, ran the Silk Road. He did the things that he was accused of. Other criminals being criminals around him doesn't change that fact.
Yes, I too read the judge and appeals judges responses
So we should trust the government with encryption back doors, right?
Right?
Right?
(Almost) everyone has a price. Show a suitcase containing $5 mil to a border agent making $90k a year, and he'll let you pass 10 tons of cocaine...and maybe even ask his wife to sleep with you (if you request it). Humans and all...
Border Agents make 90K a year?
I'd think more like 60K.
CBP officers are public servants so their salary is public information: https://www.cbp.gov/careers/frontline-careers/cbpo/pay-benef...
$90K for a non-entry level CBP officer is reasonable.
$90K for a non-entry level CBP officer is reasonable.
Someone should do a movie out of this. One of the most amazing histories i have ever heard and it's not over yet.
stealing bitcoins is like stealing a bag of money with a gps chip. its hard to spend the money without everyone knowing where it was spent
Excuse my ignorance, couldn't have he moved the bitcoins to offline storage, or is that the thing of the past? I am so out of the loop with bitcoin.
Nope, hardware & paper wallets are the preferred method of storage. Keeping crypto with exchanges is generally frowned upon by long-term holders.
Hardware and Paper wallets are offline storage
> As part of his plea, Bridges agreed to turn over the stolen bitcoin to U.S. agents.
He likely got less time for agreeing to turn over his private key. That might have been a bad decision depending on how many years he would have gotten otherwise. Those 1,600 bitcoin are worth over $10 million at the moment.
He likely got less time for agreeing to turn over his private key. That might have been a bad decision depending on how many years he would have gotten otherwise. Those 1,600 bitcoin are worth over $10 million at the moment.
Surely, that can't be how it works though, can it? If he refused to release the key and got say 10 years of prison, he wouldn't be free to spend them after getting out of prison - after all, they are still considered stolen property. Serving the prison sentence wouldn't magically make them his.
That is the justification for the much maligned forfeiture laws. Without them, or some other lawsuit, yes they are his.
Ok, so just for example - if I steal your car, hide it so no one can find it, go to prison for a year or two, get out.....the car is mine? Or a phone, or money, or pretty much literally anything else? A stolen property remains stolen until it's returned to its owner, it doesn't transfer ownership just because the thief served time.
No, it does not magically transfer ownership, but for what crime would you be prosecuted? You've already done time for stealing the car.
The judge will almost certainly order the return of the car (or a cash restitution) as part of the sentencing. If you don't return the car or don't pay the restitution you are in contempt of court.
More so, "possession of stolen property" is also a crime. The car doesn't magically become unstolen just because the theft went to jail.
More so, "possession of stolen property" is also a crime. The car doesn't magically become unstolen just because the theft went to jail.
For not returning the stolen car and using a stolen item? That's not illegal in the US? (European here)
Are you not stealing it again at that point? I'd guess that you would be charged for a similar crime, just at a different date.
What? No. Possessing stolen property is a crime.
This has absolutely nothing to do with civil forfeiture.
Civil forfeiture is when the getaway car is seized when you are robbing a bank.
Restitution is when you are ordered by a court to repay the victim for their losses that your criminal behavior caused. This case involved restitution, if he didn't comply with giving up the private keys he would be ordered to pay restitution.
Civil forfeiture doesn't impact restitution.
This has absolutely nothing to do with civil forfeiture.
Civil forfeiture is when the getaway car is seized when you are robbing a bank.
Restitution is when you are ordered by a court to repay the victim for their losses that your criminal behavior caused. This case involved restitution, if he didn't comply with giving up the private keys he would be ordered to pay restitution.
Civil forfeiture doesn't impact restitution.
No, but if he managed to get the coins into an offline wallet he could in theory move to Cambodia, cash out his coins and live the rest of his life in exile.
Or if he was careful about it he could tumble his coins, and then withdraw a small amount of cash every month or so for the rest of his life while still living in the US.
Or if he was careful about it he could tumble his coins, and then withdraw a small amount of cash every month or so for the rest of his life while still living in the US.
And just hope the government just doesn't notice the coins leaving the wallet?
Nah, it was in his best interest to turn over the private keys. You also don't get less time for turning over stolen property, you are ordered by the court do that no matter what.
If he said "I lost the private key," he would have been ordered to pay restitution in cash. That means his assets (including his house) would be seized, when he gets out of jail his wages would be garnished forever, any inheritance he ever tried to claim would be seized, if he won the lottery that would be seized, his tax returns would be seized, etc. He would never be allowed to build any wealth at all until that restitution was paid, and it never would be because who makes enough money in their lifetime to pay a $10M restitution?
The coins are now completely worthless to him because those addresses will be watched forever, if any coins ever moved from that wallet, he would automatically go to jail. $10 million you can never spend or give away is not useful.
If he said "I lost the private key," he would have been ordered to pay restitution in cash. That means his assets (including his house) would be seized, when he gets out of jail his wages would be garnished forever, any inheritance he ever tried to claim would be seized, if he won the lottery that would be seized, his tax returns would be seized, etc. He would never be allowed to build any wealth at all until that restitution was paid, and it never would be because who makes enough money in their lifetime to pay a $10M restitution?
The coins are now completely worthless to him because those addresses will be watched forever, if any coins ever moved from that wallet, he would automatically go to jail. $10 million you can never spend or give away is not useful.
Offline storage just means having a physical copy of the wallet keys stored somewhere safe and no digital copies (or a hardware wallet that is equally well-hidden) that can be accessed by the network. The record of any nefarious transaction will always exist on the blockchain for all to see.
To get away with it, he would have had to deny all knowledge of the keys -- which he could potentially do with offline storage, at the expense of opening himself to perjury if he ever got busted -- but, importantly, never spend the contents in a way that could be linked back to him by following the metadata "paper trail". That last one is pretty difficult to achieve, especially when so many coins are involved and they're already "hot". A mixer could help obfuscate the trail -- especially if there were steps involving exchanging to other cryptocurrencies or fiats, but then trust becomes a real issue -- but given the current exchange rate, it would probably be worthwhile for the Feds to do some blockchain forensics to keep track of it all.
I don't think he would have ever got away with it.
To get away with it, he would have had to deny all knowledge of the keys -- which he could potentially do with offline storage, at the expense of opening himself to perjury if he ever got busted -- but, importantly, never spend the contents in a way that could be linked back to him by following the metadata "paper trail". That last one is pretty difficult to achieve, especially when so many coins are involved and they're already "hot". A mixer could help obfuscate the trail -- especially if there were steps involving exchanging to other cryptocurrencies or fiats, but then trust becomes a real issue -- but given the current exchange rate, it would probably be worthwhile for the Feds to do some blockchain forensics to keep track of it all.
I don't think he would have ever got away with it.
I agree that there is no way he would have gotten away. I think all discussion of storage and mixing is moot. Even if it were cash -- if something is missing from US Govt. owned storage, and they look at who had access, and one of them is a known criminal who had done other similar crimes in the recent past -- that is pretty much game over in the first move.
The confusion for many people stems from how security is achieved for blockchains.
Most systems have an identifier and a password, and sometimes 2FA.
For bitcoin, all you have is a 256 bit key. The key points to a 160 bit address (through hashing), and allows signing transaction from that address.
This is true security by statistical obscurity, as you can generate as many keys as you want by brute force, and all of them will match and give you control of a valid address, with a non-zero chance of it being an existing address with a balance. The chance is so low that it is completely acceptable though, at around one in 2^154.
This means the bitcoins people own aren't materialized, you can't delete, download or store them. They are simply a positive balance recorded on the blockchain for an address they control.
There is no cold storage for the coins, as they are always publicly available on the chain, and anyone with a valid key to that address can spend them. The only way to lock them down is to move them to an address that only you control.
When people talk about cold storage, they're talking about the private key. You can generate and store a key on a secured machine / device, allowing you to generate signed transactions for the corresponding address. You then copy that transaction to a internet enabled machine in a secure way, and broadcast the transaction to the network.
Most systems have an identifier and a password, and sometimes 2FA.
For bitcoin, all you have is a 256 bit key. The key points to a 160 bit address (through hashing), and allows signing transaction from that address.
This is true security by statistical obscurity, as you can generate as many keys as you want by brute force, and all of them will match and give you control of a valid address, with a non-zero chance of it being an existing address with a balance. The chance is so low that it is completely acceptable though, at around one in 2^154.
This means the bitcoins people own aren't materialized, you can't delete, download or store them. They are simply a positive balance recorded on the blockchain for an address they control.
There is no cold storage for the coins, as they are always publicly available on the chain, and anyone with a valid key to that address can spend them. The only way to lock them down is to move them to an address that only you control.
When people talk about cold storage, they're talking about the private key. You can generate and store a key on a secured machine / device, allowing you to generate signed transactions for the corresponding address. You then copy that transaction to a internet enabled machine in a secure way, and broadcast the transaction to the network.
You should realize that every agent on the case or any case of money laundering have total and anabated control of money flow. They are a part of the system. Guys who caught are just stupidest of the bunch.
I read "American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road" and seeing how these agents committed these crimes and their jail sentence and then sentence that Ulbricht received seems a bit unjust to me.
This could be a movie.
[removed my joke]...
It's not a bonus, it's theft. It's still theft even if you take it from a criminal.
Whoosh! A good example of why jokes are discouraged on HN.
Swishhh
Then the government taking a criminal's drug money would also be theft?
Also, he took it from a government wallet, not directly from a criminal.
Edit: Just to clarify, I was just pointing out that the comment I replied to is tangential(1- he didn't steal from a criminal. 2- 'someone' can 'seize' a criminal's money without it being theft.).
He obviously stole -this isn't even a case of trying to steal; he stole, and got caught- and I don't get how he can get away with such a small punishment for stealing $10M+.
Edit: Just to clarify, I was just pointing out that the comment I replied to is tangential(1- he didn't steal from a criminal. 2- 'someone' can 'seize' a criminal's money without it being theft.).
He obviously stole -this isn't even a case of trying to steal; he stole, and got caught- and I don't get how he can get away with such a small punishment for stealing $10M+.
No. I mean, "theft" means "we made a law making it theft". By definition, government seizures are not theft.
I don't have a dog in this fight but surely neither the government nor anyone else gets to define what ordinary English words mean.
Of course they do. What do you call: "Taking a person's life with your own hands?"
- For a white westerner: Crime, Murder, etc
- For the government/military: war, being a hero, etc
- For "brown" people in the wrong countries: Terrorism
- For a white westerner: Crime, Murder, etc
- For the government/military: war, being a hero, etc
- For "brown" people in the wrong countries: Terrorism
If one of the agents pockets the criminal's drug money, then yes, its theft.
Depends on your definition of theft. Some people consider taxation a theft.
- Bridges, how much BTC did we confiscate from Silk Road?
> - 1,600
> - 1,000 you say?
> - Yes, sir - exactly 800 bitcoins
Taxable
[deleted]
The submission title is clickbait, and does not reflect the article's contents. A better title would be "Secret Service Agent receives additional 24 month sentence for theft of 1,600 Silk Road Bitcoins".
If you're interested in the background for the case, WIRED has a good article from March 2015 [1], as well as a link to the pair's criminal charges [2] .
[0] https://www.justice.gov/opa/pr/former-secret-service-agent-s...
[1] https://www.wired.com/2015/03/dea-agent-charged-acting-paid-...
[2] https://www.scribd.com/document/260409270/Force-Bridges-Crim...