US cops make 'first ever' Bitcoin seizure following house raid American cops have made their first ever seizure of Bitcoin after raiding the house of an alleged drug dealer. The Drug Enforcement Administration seized a haul of 11.02 Bitcoins (worth $814.22 at today's rates) from an address in South Carolina on April 12. They were in the possession of a man suspected of dealing drugs using …
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I'm just curious - do these things exist on a server somewhere and the owner has some form of code to retrieve them/prove ownership?
Can he just have them transfered to another person from his mobile while sitting in the back of the copcar? Could law enforcement have saved a trip down the road and just served notice on bitcoin (the company) to freeze this guy's account?
I mean, it's not like they'd be sitting on the table, or down the back of the sofa to be physically seized.
Nope it's purely a P2P managed currency, so it can't be revoked centrally.
The Police would either have to be sure
- He doesn't have a backup of the wallet keychain elsewhere (they could never be sure)
- Be able to break his wallet password and transfer for the funds to a wallet they own.
I'd imagine if you were into organised crime you'd have your digital wallet in a few places and someone else would be able to move that currency out of there pronto if anything happend.
Can he just have them transfered to another person from his mobile while sitting in the back of the copcar?
Really? Who is going to still have their mobile if they are handcuffed (behind their back) and in the backseat of a cop car on the way to the crossbar hotel?
No, they are a tradeable commodity just like rice, beans, gold or dollars. The attribute that sets them apart from rice etc. is the ability to transfer them from one person to another without any physical contact.
I imagine the cops sold him some 'stuff' in exchange for some bitcoins, when he accepted physical delivery of the aforementioned 'stuff' they nicked him.
It does make one difference: Once the case of over and offender sentenced there will still be the issue of what to do with the coins (assuming they have the wallet password). Potentially they could be treated as siezed assets and turned into funding for the department, either via exchange into dollars or selling at auction. It's possible the police department may wish to do that, but they could also face pressure from above by administrators or politicians who do not wish to 'legitimise' bitcoin as a currency, and will instead order the wallet be simply deleted.
Once criminals move in to to take over the slack operation the security should improve, these people ain't stupid;
The police can then resume operation "destroy competition on your behalf to make drug profit worthwhile otherwise it would be just cost of production instead of the cost of a nationwide police force to take out rivals" and if you survive that move into bribes, politics, extreme violence.
This story has been going around for a little while now, and I still can make no sense of it. Did they raid his house and take his bitcoins, or did they "sting" him on Silk Road and keep the BTC he sent? Or both somehow? It seems like all we really know is the DEA included "11 bitcoins" in a published list of seized assets and everything else speculation.
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