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U.S. Government Sold $216M of Seized Silk Road Bitcoin This Month (coindesk.com)
53 points by wslh on April 1, 2023 | hide | past | favorite | 51 comments



> With respect to the 51,351.89785803 Bitcoin forfeited in the Ulbricht case before Judge Schofield, the Government has begun liquidating (selling) it. On March 14, 2023, the Government sold 9,861.1707894 BTC (of the 51,351.89785803 BTC) for a total of $215,738,154.98.

How and where would a sale like this take place? An auction? Is there any public information about this sale?


The Marshals Service auctions seized property. https://jlopp.github.io/us-marshals-bitcoin-auctions/ Here's an example of a previous one: https://www.usmarshals.gov/what-we-do/asset-forfeiture/sale-...


I've seen bitcoin for sale on GSA auctions before. But $200 million seems like a lot for a single auction


What’s amazing is the BTC price didn’t hiccup at all and continues its 2023 bull run. That proves the markets are deep and liquid, and selling 0.04% of the market cap OTC doesn’t cause a blip.


I think it's irresponsible and unnecessary to suggest that the USD/BTC conversion is anything but highly variable. This market is highly fickle, prone to hype, fud, and fomo. There is also still a large international regulatory risk associated with BTC when considered as an asset.

I doubly find discussions viewing BTC primarily as an asset class to miss the point of BTC. Maybe the point of BTC has changed in the last 10 years, and I'm behind the curve on this one.


> I doubly find discussions viewing BTC primarily as an asset class to miss the point of BTC. Maybe the point of BTC has changed in the last 10 years, and I'm behind the curve on this one.

If the price of bitcoin goes up, it's good, because it's a value store and/or a good investment! If you think it's for anonymous payments, you're missing the point.

If the price of bitcoin goes down, it's not a problem, because it's a method of anonymous payments. If you think it's an investment or value store, you're missing the point.


> because it's a method of anonymous payments

Clarification: Bitcoin is not anonymous. It would be better to call it pseudonomous.

The blockchain remembers transactions and transactions on the main chain are public. Once an investigator gets access to a BTC wallet, they can understand where all of the inflows and outflows went. Even without access to the wallet, some of that can be pieced together from public blockchain data (assuming a single wallet is used).

My understanding is that other cryptocurrencies like Monero are far closer to anonymous.

Also worth mentioning that cash is anonymous (to the extent that your counterparties don’t track every bill’s serial number).

BTC’s value prop over cash is that it can be sent across distance/borders faster than cash can travel and ownership can be maintained with as little as knowledge of a few words.


I believe the price of Bitcoin is completely fixed by the exchanges themselves, so it doesn’t surprise me.


Given there are thousands of spot markets I find it absurdly unlikely that a cartel could fix the price let alone keep such a conspiracy secret.


Allegedly whales set the price on Binance and arbitrage bots equalize the price on every other exchange.


And this is based on what information? Sounds very theoretical


I only know of Coinbase. It doesn’t really matter how many exchanges there are, its about the capital, any way you spin it they have more capital then their customers so they set the supply and demand. When they lose a lot of customers, they just burn cash to drive the price up. That’s why they keep failing.


I think the fact you “only know of coinbase” proves you know very little about what you are talking about, and have formed an erroneous conspiracy theory based on inadequate knowledge.


I don’t want to be antagonistic, but I have heard of many exchanges as I perused these forums through the years. FTX, Mt. Gox, Binance. So what probably should have said was, “It’s the only exchange I know that is still operating that I as a PNC bank customer can use, that I know of.”


Literally impossible.


Not with Tether around.


But many exchanges have been caught doing this already. FTX for example was clearly price fixing by using there own coins to prop up bitcoin.


It's the opposite, FTX was selling customer BTC to prop up their own coins.

This is also a clear example of how difficult it is to prop up a coin, even relatively illiquid ones like the FTX coins. FTX could sort of prop up their own coins, but not really. They couldn't move prices high enough to keep lenders from recalling capital, and they couldn't support prices at all when there was a confidence crisis before the collapse.


So you believe that globally, all of the thousands of exchanges in various jurisdictions all over the world are colluding, including Fidelity and every other regulated US exchange? What about bitcoin-only companies that don't do any business in altcoins? How are they managing to prop up the price?

It's reasonable to believe the market price is crazy. But it's crazy to believe the market's mere existence is a huge conspiracy theory 15 years in the making. Just call the buyers irrational if you must.

And don't forget FTX was an offshore shitcoin casino that held exactly 0 bitcoin when it collapsed. It's a stretch comparing that to regulated US exchanges.


Over these thousands of exchanges relatively little fiat money actually flows. If the real value of BTC over the total market is $x and I’m Coinbase and I have > $x amount of real cash, I now can completely fix the price and the competition just becomes more parties to scam.


> Over these thousands of exchanges relatively little fiat money actually flows.

citation needed

So you believe Fidelity and Coinbase have been lying in their corporate disclosures for the past 10 years, along with thousands of other companies all over the world, just so they could throw hundreds of billions of dollars of their own money into a black hole, to prop up a trillion-dollar asset class for 10 years running... why? Just for fun?

Do you also believe the Nasdaq doesn't actually exist?


Yes I believe the exchanges lie, if you think they don’t you obviously don’t follow the news.


You'd have a more successful time arguing they were propping up Ethereum.

Even then, what about the dozens if not hundreds of other places to trade for BTC...?

And, to save you and others telling you, some time: exchanges are not the only markets. DEX is a huge factor.


[flagged]


> He was never prosecuted for causing harm or bodily injury and no victim was named at trial.

didn't he pay for a would-have-been hit to get somebody killed but it was actually an FBI agent (aka he got set up and fell for the trap)?

> Ross was not convicted of selling drugs or illegal items himself, but was held responsible for what others sold on the site.

isn't that arguably worse? he helped people in a lot of countries break the law (created a place where illegal sales can be facilitated)

it isn't like he moderated them off the platform. it was almost exclusively the entire purpose of the platform.

Judge : Unfortunately for you, the line you crossed was real and the plants you brought with you were illegal, so your bail is twenty thousand dollars.

https://www.imdb.com/title/tt0221027/characters/nm0528147


>didn't he pay for a would-have-been hit to get somebody killed but it was actually an FBI agent (aka he got set up and fell for the trap)?

I don't know, did he?

The government dropped those charges, and then when his defense team tried to present evidence defending him from those allegations (note that two federal agents eventually went to jail for their corruption during this case) the judge wouldn't allow them to present their evidence.

Basically, he never got a chance to defend himself from that allegation. Yet it was used at his sentencing to show he deserved life in prison (for non-violent crimes).


> for non-violent crimes

I get that a lot of people like to smoke weed and maybe do mushrooms at Coachella, but not all drugs are the same.

Silkroad and other darknet markets sell everything from date rape drugs to fentanyl. Framing it as facilitating a harmless or victimless crime is disingenuous. Not to mention the ancillary services that often pop up like counterfeit documents, money laundering services, guides and tools for scamming people, and other crap.


Silk Road had rules against selling certain things, which included tools for fraud.

Drugs shouldn't be illegal. Prohibition has always failed.

Regardless, he didn't commit violence. The distinction between violent and non-violent crime is a meaningful one, and I strongly oppose his life sentencing.


> The distinction between violent and non-violent crime is a meaningful one

Consider someone who knowingly brokered a sale of baby formula that they knew was tainted with rat poison and killed dozens of children, would you consider that a non-violent crime that deserves leniency in sentencing?


Silk Road would not allow such a product


> isn't that arguably worse? he helped people in a lot of countries break the law (created a place where illegal sales can be facilitated)

The logic is not sound.

1. If someone started selling drugs using someones GitHub/GitLab issue tracker, would the project owner be accountable? I understand that Ross was likely well aware about the drug sales on his website, but saying someone is facilitating the activities because they own the place is not a great argument in isolation.

2. What is illigal is very different different from country to country. A majority of the sales on Silk Road was marihuana, which is now legal in a 21 US states and decriminalized in 10 others. There are countries where it has never been illigal. Personal posession of AR-15 is legal in the USA, but illigal in a lot of other countries. Suffice to say that it is pretty subjective.


He was never prosecuted for it. AFAIK they didn't even really bring it up.


Isn't that a common theme for certain kinds of criminals? I remember reading that organized crime bosses are often prosecuted for tax fraud rather than the violent crimes they're also (presumed) guilty of.


It was a major factor in sentencing, which is the issue at stake here.


I guess I have to look into it more, because I didn't think you could be sentenced for something you weren't convicted of.


He wasn’t sentenced for it, but rather it was mentioned as the reason for the maximum punishment being doled out for the nonviolent crimes he was convicted of. Which, yes, is still extremely suspect because he never got his day in court to address that allegation, and I think his appeals are based more on altering that prejudicial sentencing rather than the conviction itself.


He (or his admins) created the categories, many of which have the reasonable assumption of illegality. You can't claim plausible deniability for your users selling cocaine when you literally created a category called Cocaine.

https://astr0baby.files.wordpress.com/2017/09/sr-01.png


One has to be the most deranged and deluded sort of idiot libertarian to think that Ross doesn’t deserve to rot away in prison.

It’s not a matter of how one feels about drug policy or even financial / identity fraud.

He wasn’t just a kid that helped people sell drugs online.

Anyone that begins to spout this BS I assume either doesn’t know the full extent of the Silk Road story (which is inexcusable given its immense media coverage) or is a sheltered “you should just be able to do anything mahn” haven’t-really-thought-about-it-for-more-than-one-second libertarian.


I know about it deeply and would say you are the one that doesn't know enough about it you actually believe the propaganda I can only assume you are talking about.

US law enforcement is incredibly corrupt and the case stinks. The 'media' is full of outright sensationalised bullshit and your comment is just another example of how it poisoned the case


"Ross was not convicted of selling drugs or illegal items himself, but was held responsible for what others sold on the site."

Ultimately the sentence reflects the governments urgent, non negotiable and final position as arbiter of trade in its capitalist economy. Without this stringent check the market would be free to sell everything from bootleg kidneys to child slaves.

This sort of libertarian absolutionist malarkey is how we wound up with Bolshevik terrorist attacks and pinkerman slaughters.


In a weird way, a skim of your comment reads as the opposite of what I think you intended, after I read it twice.


GPT-generated comment.

These aren't supposed to be on hn.


What is a pinkerman


I think they were referring to the Pinkertons.

https://en.wikipedia.org/wiki/Pinkerton_(detective_agency)

They have a colorful history of at one point being hired guns and were used by companies to violently end labor strikes.

Interestingly enough the Pinkerton agency still exists.


I think you mean Pinkerman


> Interestingly enough the Pinkerton agency still exists.

They're still scummy union-busting pieces of shit as well.



That says Pinkerton not Pinkerman


apparently, unlike ordinary HN people US Gov don't care it "can't buy a coffee in my local deli for Bitcoin"


They auctioned it off so they could get useful currency that the gov could spend.

Same as when they auction off other proceeds of crime. Cars, properties, small planes, jet skis, jewelry...


Bitcoin doesn't care if you liquidate hundreds of millions of it, exchanges fail, customers are scammed with Superbowl commercials, Hacker News commenters crying for than a decade about how Bitcoin has 'no value', etc.. The fundamentals hold. 14 years and still going strong.


I think that Bitcoin is an absurd waste of time and effort, but if I had hundreds of millions of dollars worth of it floating around, of course I’m going to sell it.




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