How? Sounds like his address / public key is known but only he (if anyone) as the private key. What steps from an authority, besides an exogenous threat like being charged again is any balance moves, could they take?
I think the explanation is simple: the person who wrote the article doesn't seem to understand how bitcoin works.
For all the police knows, the encrypted secret key could be backed up in a gazillion places (cloud, tape, paper wallet, hidden CD-ROM, USB key buried in garden, memorized 12 word seed, etc...).
For a properly prepared Bitcoin owner, there is no such thing as "preventing someone from accessing their Bitcoin" other than holding them in a jail cell with no internet access for the rest of their natural lives.
My suspicion is that he was not properly prepared and only had that single copy of the key. Usually when police raids you they take all your physical storage media. IF he were properly prepared, he could just leave the country, and access the money from there. Maybe he doesn't do it because he fears the police take his backup away, no idea.
So most likely, both police and him are in a situation where collaboration by both is needed to get access to the bitcoins.
They will also monitor the wallet and the moment it's accessed in any way more indictments follow. The money officially belong to the authorities now so touching them is theft. He can't claim it was hacked, there's no reasonable way to hack a wallet, and if there was there are far more valuable wallets to target.
He'll also never be able to report it if he's ever robbed of that money.
Depends. He might be able to sell the keys to a third party (who those authorities have no access to), for a discount in say cash or something where the transaction isn’t logged, and then be obviously not touching it when transactions or moves occurs - perhaps in court talking to a judge, or something similar.
It’s hard to separate something like that from someone finding an old key/seed backup or the like, which I don’t think anyone would consider a proper prosecution.
There is also a plausible scenario like a gov’t or court appointee actually getting or cracking the password somehow and stealing it themselves, like what happened with a significant Bitcoin balance related to Silk Road that got seized and then stolen from under the gov’ts nose by a secret service agent.
Germany has recently passed a law which allows the government to seize property where the source of the money is not clear. This was done originally to prevent arabic clans from buying rental properties around the country, but I can imagine it applying to whatever money he's got from that sale as well.
I'm wondering if we're starting to see a shift towards more closed off/nationalized internet actually - with COVID, borders closing, fights over 'fake news' and how to do something about it (with approaches as varied as Poland, US, China, Australia), it seems like globalization is unravelling in a bunch of angry yelling between Governments.
> He might be able to sell the keys to a third party
He might but it would certainly be illegal. The keys are to a wallet he does not own legally anymore, it belongs to the authorities.
And selling the wallet might be difficult when every buyer could have made a deal with the authorities. His best bet is to go far from the reach of German authorities and hope nobody broadcasts his location and the fact that he has access to $60M that he can't report stolen.
Sure. It remains unclear that anything is preventing him from going to a different country without extradition once his sentence is completed and withdrawing the coins there.
Depends. They could have erased his pc, and have access to an encrypted file, in the hope that he has no backups of the keys anywhere. Of course that wouldn't work with either basic precautions or "memory" or "paper" wallets.
TLDR: either the prosecutor is stupid, or they lie. I'm not sure which is worse.
Or they look at how often normal people actually back things up?
Or they got a court order (or whatever the term of art is) saying, effectively “memo to all banks: this person owes us XYZ in Bitcoin, he’s paying that back out of future bank balances”?
Exactly. They have seized nothing, apparently. The author over at the verge apparently doesn‘t get it either. The only way this would make any sense is if we were looking at a multi-sig wallet where police has seized one out of two necessary keys, where the second one is a brain wallet or hidden somewhere.
The owner could hold and hope for another fork to happen if it ever does and spend on the fork side.
If they were determined and willing to break the law they'll probably wait to do a crypto swap. Trading BTC for another crypto that is easier to hide behind in the future.
The usual arguments I get is none of this matters because the individual won't be able to spend the crypto into anything of value. Government will monitor the wallet and then monitor any assets, securities, etc the German man has.
Nobody knows what the future will look like though and what happens if any country comes out supporting crypto as their default day to day currency? German man moves, becomes citizen, denounces his German citizenship to not need to report anything and is able to exchange crypto for assets and securities.
For $60M today and what might be +$100M when the time comes I'm sure there will be a path of spending 90%, keeping 10% and living a life of very little worry.
> Who can argue with amazing arguments like "Bitcoin is the
> money of the future because it will allow a fraudster to keep
> the proceeds of his crimes!"
The benefits outweigh the costs. Fiat currency is used for plenty of bad things, like funding wars and proxy wars. It would be a net gain if, for instance, fraudsters were a little more able to steal from gullible people but governments couldn't fight as many wars. Gullibility can, with proper education, be fixed, after all.
this is actually good for bitcoin. just proves that no powerful government can touch money stored in bitcoin. Finally an alternative to digging gold bars in the woods :)
I am not German, but in North America, a Judge can rule you in contempt of court and held in custody until you comply with the terms of the judical order. There is no "oh, you ran out the clock, ok off you go you scamp!".
Yes, but they do tend to avoid doing so if you’ve, for instance, plausibly lost the ability to do what the order demands you do - like forgotten the password or lost the keys, and there is no evidence you have backups.
Additionally, ‘knowledge’ such as a password has been pretty consistently ruled as protected by the 5th amendment and in theory someone couldn’t be held in contempt for refusing to divulge it here in the US. However, if someone is already convicted or seizure of something is blocked by that knowledge (that may also be incriminating if someone has it?), that is less tested and probably not protected.
Even if you haven’t, it is very, very rare (and usually requires high profile political pressure) for being held over contempt to happen for very long.
This is "seizure" in the sense that the ill gotten contents of the wallet now legally belong to the government, not in any kind of "digital possession, who can own a number", philosophical discussion.
The government can't liquidate the asset without the private key, but it is their asset now. If the original fraudster (or anyone else) accessed the assets it would be some variant of theft.
60 millions can buy a lot of friends in jurisdictions without extradition treaties. Maybe not the friends one wants to have but he didn't earn those money in a legal way, so he probably won't bother. Even if he has to give away most of them he'll still be well off.
Stupid question: Could the state (or a large group of states) not effectively impose restrictions on bitcoin wallets? Say, I, the federal agency of crypto, publish a list of "legal" (i.e., with owners know to me and subject to my rules) wallets today and demand that everyone that accepts bitcoinust verify that the transaction comes from such a legal wallet (except for everything happening before today). Accepting anything else is a criminal act (like money laundering). Registering existing wallets, dealing with multiple jurisdictions, mining, and creating new wallets are technical details.
I think two things could happen: Either, Bitcoin collapses and vanishes into the darknet, because no one can buy anything legally with it. Or, if enough owners agree and register, it becomes fully transparent for the state, effectively making it useless for criminal payments.
Doing something similar with cocaine, marijuana, LSD did definitely reduce the degree of commerce happening with them - but has definitely not caused them to go away. You’re presuming no money laundering for instance, or that one state entity controls enough of the endpoints that it would work well enough it could actually be enforced.
Not impossible (I guess), but practically not possible either.
Still have a few hundred or so bitcoins from playing around with it a decade ago. It was just a toy. We were just sending them around to each other just to watch the tech work. Hell we gave them to a sites like bittap so other people could jump in and give it a test. My key was entropy based so I doubt I'll ever open my wallet, but it's no loss to me. I'd probably would have sold at $200 bucks and got a car or something.
No, it doesn't. 160 bits of key space to search. Unless you come up with some quantum breakthrough, it's impossible tp do in our universe in reasonable time.
