Feds Confiscate Record $29 Million BitCoin Booty From Dread Pirate's Hard Drive
When three weeks ago, the FBI arrested Ross William Ulbricht - the creator of the now shutdown Bitcoin-only "alternative" marketplaceSilk Road also known as Dread Pirate Roberts, some were surprised that the Feds only confiscated about $3.6 million worth in Bitcoins from Ulbrecht. Proving all doubters wrong, and that creating the first "libertarian" marketplace not subject to any rules and regulations, not to mention fiat monetary constraints, actually does pay quite well, moments ago it was revealed that Federal prosecutors had found an additional $29 million, or 144,336 BitCoins, belonging to the Dread Pirate. According to Reuters, the booty was discovered on "computer hardware" belonging to Ulbricht. The repossessed electronic money, whose encryption technologies seem to leave a bit to be desired, has now been impounded and will likely remain on the FBI's hard disks indefinitely.
More:
Authorities said the haul represented the largest ever Bitcoin seizure.Ulbricht's lawyer could not be contacted on Friday evening (local time), but had previously told reporters his client denied the charges.The currency, which has been in existence since 2008, first came under scrutiny by law enforcement officials in mid-2011 after media reports surfaced linking bitcoins to Silk Road.The US Attorney's Office said with nearly 30,000 bitcoins previously seized, federal agents have now collected more than $US33 million in bitcoins based on current value.Ulbricht is due to appear in court within weeks to face criminal charges of narcotics trafficking conspiracy, computer hacking conspiracy and money laundering conspiracy.
It remains to be seen if the Dread Pirate will be able to transact in prison using BitCoins. It also remains to be seen if leading hedge fund/PE firms such as Fortress, which recently voiced its support for BitCoin, will step in to fill the void left by Ulbricht's arrest realizing the great monetary potential - in either USD or BTC terms - to be reaped by providing the masses with what is a truly anonymous marketplace.
Finally, for those who missed it the first time, here is some additional information on the identity and motivation of the Ulbricht:
Who is the Dread Pirate Roberts?
The court documents described Mr Ulbricht, 29, as a former physics student at the University of Texas, who had gone on to study at the University of Pennsylvania between 2006 and 2010.It was here, according to Mr Ulbricht's LinkedIn profile, as quoted by court documents, that his "'goals' subsequently 'shifted'".He wrote on the social network that he had wanted to "give people a first-hand experience of what it would be like to live in a world without the systemic use of force" by "institutions and governments".Authorities said he took to online forums to publicise Silk Road as a potential marketplace for drugs back in January 2011.In one such message, a user believed to be Mr Ulbricht allegedly said: "Has anyone seen Silk Road yet? It's kind of like an anonymous Amazon.com."Investigators said he used the same channels months later to recruit help - starting with a search for an "IT pro in the Bitcoin community".The FBI said Mr Ulbricht would appear in San Francisco federal court later on Wednesday.
And more from NYMag:
The dark Internet's favorite massive drug marketplace, Silk Road, was shut down by the FBI last night and its alleged mastermind arrested on an array of colorful charges after a nearly two-year undercover operation.Twenty-nine-year-old Ross Ulbricht, a.k.a. "Dread Pirate Roberts," was picked up in San Francisco and accused of running the underground e-warehouse while allegedly laundering money, trafficking narcotics, and even hiring a hit man to kill one of the site's users. Fittingly for a computer nerd, not a Heisenberg, he left a rich personal trail online.According to the federal complaint, filed in the Southern District of New York, "Silk Road has emerged as the most sophisticated and extensive criminal marketplace on the Internet today," enabling "several thousand drug dealers" to move "hundreds of kilograms of illegal drugs." The site's sales totaled about $1.2 billion in the form of 9.5 million Bitcoins (naturally). About $3.6 million in the Internet currency has been seized.Ulbricht, though, wasn't exactly great at covering his tracks, attaching his name, photo, and personal e-mail address to Silk Road business, eventually resulting in his arrest....Last year on his Google+ account, Ulbricht, who's now charged with facilitating the sale of drugs through the mail, asked, "Anybody know someone that works for UPS, FedEX, or DHL?"...On YouTube, Ulbricht ("ohyeaross") liked videos by Ron Paul, along with clips called "The Market for Security" and "How to Get Away With Stealing." (Of Paul, Ulbricht once told his Penn State Univeristy paper, "There's a lot to learn from him and his message of what it means to be a U.S. citizen and what it means to be a free individual.") Most recently, he followed the Vice channel.
http://www.zerohedge.com/news/2013-10-24/head-fortress-recommends-investing-bitcoin
Head Of Fortress Recommends Investing In Bitcoin
Submitted by Tyler Durden on 10/24/2013 19:51 -0400
At first glance, when the CIO of Fortress Investment Group says:
"Put a little money in Bitcoin...Come back in a few years and it’s going to be worth a lot."
One might think, the firm that manages $54.6 billion is advocating the end of the USD as we know it... Or is this more muppetry at work?
“Put a little money in Bitcoin,” Novogratz, principal and co-chief investment officer of macro funds at Fortress, said at a conference held today in New York by UBS AG’s chief investment office. “Come back in a few years and it’s going to be worth a lot.”Novogratz said he sees Bitcoin growing as a payment system, especially in developing nations. Novogratz said he has put his own money in the virtual currency, without specifying how much. He has not invested in Bitcoin on behalf of Fortress, which managed $54.6 billion as of June 30.“I have a nice little Bitcoin position,” Novogratz said.“Enough that I’m smiling that it doubled.”
However, color us a little skeptical at his advice...
Given that Bitcoin may ultimately make firms like Fortress - that rely on fiat specie - redundant, then doesn't the endorsement of Bitcoin by one of the world's largest Private Equity firms reek of the ultimate failure of BTC as a monetary construct, and seem much more to be merely an attempt by the firm to herd even more momentum chasers into a trade (ostensibly one for Novogratz P.A.) that will be then unwound with Bitcoins ultimately converted into the same dollar they are supposed to replace?
( Not just FBI but also Sweds and UK making arrests and seizing BitCoins..... )
FBI makes record $28 million Bitcoin bust
US authorities have reported their largest-ever Bitcoin bust amounting to $28 million of the digital currency. It was seized from the owner of the controversial Silk Road website, which was shut down three weeks ago.
A Friday statement by federal prosecutors in New York details the seizure of 144,336 bitcoins, which were discovered on the computer belonging to Silk Road founder Ross William Ulbricht, alias “Dread Pirate Roberts,” Reuters reports. Ulbricht was arrested Oct. 1 in San Francisco on several charges of conspiracy.
Ulbricht’s lawyer could not be reached for comment, but the accused earlier denied all the allegations.
Since its inception in 2011, the now closed website was an anonymous hub for anything from drug deals to weapons and computer hacking programs – even hiring assassins, the Justice Department said.
The digital currency itself has been around since 2008, but it was not until 2011 that authorities showed greater interest in it, following the discovery of the connection to Silk Road and the near to 1 million registered users regularly engaging in illegal activities.
The current bust was part of a joint civil action against Ulbricht and his website. He is expected to appear in court in a matter of weeks to face charges of conspiring to traffic narcotics, launder money and hack computer networks.
Ulbricht’s arrest and the bitcoin seizure followed a string of international arrests of Silk Road users by Swedish, British and US authorities, a testament to the scale of the international crackdown on the website. The director of Britain’s newly-founded National Crime Agency (NCA), Keith Bristow, warned Oct. 9 that the “latest arrests are just the start” and “there are many more to come."
Bristow added that bitcoin will also now be closely watched, after his agency seized millions of pounds of the electronic currency.
Together with the previous figure of 30,000 bitcoins, the new FBI bust puts the current value of seized currency at $33 million, the US Attorney General’s Office said. In the two years Ulbricht’s website was in operation, about $1.2 billion in bitcoins were traded. Silk Road charged between 8 and 15 percent in commissions.
Following Ulbricht’s arrest and the seizure of 26,000 bitcoins from a public wallet, an FBI-linked public wallet was discovered by Reddit users the next day. The owner could not be identified for certain, but bitcoin users quickly seized the opportunity to use it as a platform for voicing their opinions about the FBI.
They made tiny donations to the wallet, dubbed ‘Silkroad Seized Coins’ on another website –Blockchain.info, which allowed them to post comments – the majority of them bashing the FBI for trying to“control” the bitcoin business instead of seeking justice.
But even now, weeks after Ulbricht’s arrest, it remains unclear what the FBI have actually “seized.” To use bitcoins someone must have a private password corresponding to each wallet.
The previous public wallet seizure was carried out easily because those bitcoins were at the less-protected escrow account of the website, Extreme Tech wrote at the time of Ulbricht’s arrest. Ulbricht’s estimated $80 million personal wealth in bitcoins has remained inaccessible to the FBI, and it also remains unclear what the FBI would do with the bitcoins if they did have access to them – as the US government refuses to recognize the currency as legal tender.
The authorities may be able to prevent Ulbricht from transferring the money, but without having the ability to access the bitcoins, seizing them is not much more than simply confiscating a computer.
The success of the Silk Road website was attributed to its operating on the encrypted Tor network, which made its dealings nearly impossible to trace. One transaction would also generate a vast number of fake ones with the purpose of masking the original buyer and seller – another effect of Bitcoin’s anonymous and decentralized nature.
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