USMS Asset Forfeiture Bitcoin Sale(usmarshals.gov)
usmarshals.gov
USMS Asset Forfeiture Bitcoin Sale
https://www.usmarshals.gov/assets/2016/bitcoinauction/index.html
76 comments
Weird. Why not sell them in much, much smaller increments? You stand a way better chance of getting full market value if you don't enforce the artificial liquidity constraint of "only buyers who want a zillion bitcoins right now". Or just legitimately sell them on an exchange. Is there a reason the gov't would be obligated to go about it inefficiently?
They are the U.S. Marshals. They are most likely acting on a federal court order that says words to the effect of, "Auction this stuff." They sell vehicles, boats, buildings, anything that can be seized by the government. Auctions are the only method I've ever seen them use, I think because that allows the public to bid and avoids conflicts of interest (e.g., an agent's brother-in-law gets first crack at whatever they're selling).
Makes sense. It seems simple too. They don't have to develop any special skills on a per case basis. Sell everything the same way.
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This is a typical assest forfeiture auction. They don't want to deal with multiple buyers or non-cash-on-the-spot buyers. They value disposing of assets quickly and cleanly over getting market value.
Also not to mention they need to be seen fair doing it. Wouldn't look good if the USMS was seen passing the coins off to their mates.
Especially considering some of these coins came from a lot seized from the FBI agents (Carl Force was one) who tried to pocket it during the Ross Ulricht case. ;) The risk of something unethical happening here isn't just high... it's already happened to this exact merchandise.
And with the blockchain permanently recording this stage of those coin's provenance - I'm wondering whether owning them is going to solve or cause problems for someone later... "That's a Silk Road bitcoin!!!" (I wonder if "Real Satoshi Bitcoins" will one day be worth many times their "face value" like Confederate Half Dollars?)
If my wallet contains 10 bitcoins, and I somehow end up with a Satoshi bitcoin, don't I now have 11 bitcoins that are all alike? When I go to spend one bitcoin, how do you know if it's the Real Satoshi one or if it's one of my others?
Coins have history, but coins spent together gets merged (and partially spent coins get split).
But it's an auction? Assuming that there are enough buyers with the multi-hundred-k around, they will get close to the market value.
Blind auction. Everyone makes 1 silent bid, highest wins.
If you want to buy a block of BTC above market price, there are several brokers who would be happy to help you at any time; you don't need to wait for a government auction to do that.
It's kind of a modified The Price Is Right mechanic, isn't it? With the difference that the actual market price is known. So each bidder's goal is to guess how slim a margin every other bidder will try for, and go $1 more than that.
In the end, assuming anyone bids at all and all the bidders are rational, someone will make a profit. It just won't be a very big profit, probably.
In the end, assuming anyone bids at all and all the bidders are rational, someone will make a profit. It just won't be a very big profit, probably.
Good. That's what we want from asset seizure auctions.
Sealed bids are kinda beneficial here incase they only have one serious bidder.
Well you have to give them 100k cash to even bid.. so you at least need to be 10% serious to have that kind of money hand over to bid.
Especially if the proceeds go straight to Treasury and they have to manage the sale out of their existing budget.
"The U.S. Marshals Service (USMS) offers property for sale to the public which has been forfeited under laws enforced or administered by the United States Department of Justice, its investigative agencies (Drug Enforcement Administration, Federal Bureau of Investigation, and Bureau of Alcohol, Tobacco and Firearms), and certain other federal law enforcement agencies. "
My guess here is that bitcoin is considered property and not currency, and there are laws around this.
Edit: Looks like they are treating bitcoin as property -https://www.usmarshals.gov/foia/directives/asset_forfeiture....
My guess here is that bitcoin is considered property and not currency, and there are laws around this.
Edit: Looks like they are treating bitcoin as property -https://www.usmarshals.gov/foia/directives/asset_forfeiture....
I wonder if anyone has used this as evidence that Bitcoin should not be regulated under FinCen rules (as its property not currency). I guess it would depend in part how the Marshall's service treats foreign currency they seize.
The IRS designated it as property because they do not have the authority to designate anything as currency, only Congress does.
FinCen is not limited in congressional currency designations to carry out its regulations. Only services that exchange national currency to bitcoin are regulated under FinCen. Bitcoin is not regulated by FinCen.
FinCen is not limited in congressional currency designations to carry out its regulations. Only services that exchange national currency to bitcoin are regulated under FinCen. Bitcoin is not regulated by FinCen.
No - the actions of a bureaucrat, or a bureaucratic committee are not grounds for court decisions. A court could force them to treat bitcoin a currency, but they can't force a court to recognize bitcoin as property.
It's a one time action. They're operating under what they know right now. In the future, if things change with how the government treats Bitcoin, they'll probably change their liquidation procedures accordingly.
Not sure about why not split them up, but usually there's a requirement that seized assets are auctioned off. Since the government can't treat that bitcoin amounts as currency doing an exchange like that probably violates some rule. I believe that they have to do similarly with any other security (stocks, bonds, etc.) that's been seized.
It's actually efficient to do it this way. The price may be higher b/c buyers are willing to pay a premium to buy coins off-exchange.
Also interesting to note that in previous auctions it looks like USMS only conveyed a "bill of sale" for the bitcoins. We don't know what arrangements were made for conveying the bitcoins themselves. I would speculate that they were transferred to a wallet designated by the buyer, but it's possible they were not.
Also interesting to note that in previous auctions it looks like USMS only conveyed a "bill of sale" for the bitcoins. We don't know what arrangements were made for conveying the bitcoins themselves. I would speculate that they were transferred to a wallet designated by the buyer, but it's possible they were not.
It's only 2,800 coins. Why would anyone bother paying above market for that block? I would assume, if I went to an exchange and purchased 3,000 coins, the exchange price wouldn't go up much. But maybe I'm wrong on that, and BTC is thinly traded? I haven't been following it lately.
One reason to pay over market value, is once you buy these coins from the US Government, the sale legitimizes your ownership of it.
That is, whatever happens in the future between Bitcoins and the Gov/Fed/Treasury, your lot might have a standing in a court of law that other lots might not.
This sale basically cleans these coins from all previous illegitimate and/or illegal transactions that they went through - whether some of these where stolen, used to buy drugs, not reported or accounted for correctly with the IRS, etc.
In a way you are getting a government issued certificate of legitimacy. And you will not have to prove anything - when others will have to prove how they acquired theirs.
That is, whatever happens in the future between Bitcoins and the Gov/Fed/Treasury, your lot might have a standing in a court of law that other lots might not.
This sale basically cleans these coins from all previous illegitimate and/or illegal transactions that they went through - whether some of these where stolen, used to buy drugs, not reported or accounted for correctly with the IRS, etc.
In a way you are getting a government issued certificate of legitimacy. And you will not have to prove anything - when others will have to prove how they acquired theirs.
I think I've seen something around ~11k BTC volume per day on coinable exchange, so you are somewhat right, especially if you spread your trades over a period of a few days.
why is that weird, this is the smallest amount of bitcoin the US Marshalls have ever sold...
Their last auction was 44,000 bitcoin worth $20 million
Their last auction was 44,000 bitcoin worth $20 million
It looks like they are not interested in maximum profit indeed. Maybe they'd like to be very sure about where they are going? Or maybe it is some legal constraint, like a country cannot subscribe to a consumer exchange?
Last time they sold 30k at once. 2k is really nothing, they will probably get close to market price.
Someone will jump through the hoops, and "earn" a profit in the process. Then, because the marshals set up the hoops just like they were told, some of that profit will find its way back to one or more of the more senior marshals involved in this farce. In USA we prefer our corruption giant-sized.
Wow, there's a lot going on here. It's probably just easiest to auction it off this way and be done with it.
> The USMS will not transfer any bitcoins until it has confirmed receipt of purchase funds from the buyer.
I wonder if you can reverse the wire and keep the bitcoins.
> The USMS will not transfer bitcoins to an obscene public address, a public address apparently in a country restricted by the Office of Foreign Assets Control (OFAC), a public address apparently associated with terrorism, other criminal activities, or otherwise hostile to the United States.
How would a bitcoin address be located in a foreign country? Or even located anywhere?
And wouldn't anyone participating in this create a brand new address with the private key in cold storage?
I wonder if you can reverse the wire and keep the bitcoins.
> The USMS will not transfer bitcoins to an obscene public address, a public address apparently in a country restricted by the Office of Foreign Assets Control (OFAC), a public address apparently associated with terrorism, other criminal activities, or otherwise hostile to the United States.
How would a bitcoin address be located in a foreign country? Or even located anywhere?
And wouldn't anyone participating in this create a brand new address with the private key in cold storage?
>I wonder if you can reverse the wire and keep the bitcoins.
Once cleared, wires can't be reversed without the recipient's permission. Their liquid, irreversible nature is why people use them (and not, say, checks or ACH) for high value transactions.
Once cleared, wires can't be reversed without the recipient's permission. Their liquid, irreversible nature is why people use them (and not, say, checks or ACH) for high value transactions.
Directly scamming federal law enforcement seems unwise.
> a public address apparently in a country restricted
I think apparently is the key word here. For example if you're running a company in restricted country X and it's known/advertised that this address is associated with your company, it would match.
I think apparently is the key word here. For example if you're running a company in restricted country X and it's known/advertised that this address is associated with your company, it would match.
Seems to be the case. Actually some pretty clever wording.
I wonder whether they will get a better deal through a sale like this than simply selling them on an exchange (or exchanges). Do they sell on an exchange when they need to dispose of other assets that have exchanges for trading?
Of course not. But it's vastly easier to liquidate. Someone will make an instant profit, upon acquisition of these coins.
If you run some bitcoin-related company, winning the bid could be an easy way to get mentions in the media.
It could actually make sense to bid a bit more than the value of the coins, I would expect the coverage to be worth at least several thousand dollars.
Hadn't considered that. Very interesting!
I wonder if this makes legal precedence that the US GOV is giving it's stamp of approval that bitcoin is valid and legal.
i.e. when they seize drugs they don't auction them off because they are illegal. When they seize fake iPhones I'm sure they don't auction them off because they are fake and illegal.
Buy auctioning BitCoins it seems to me they're saying "It's a legal thing you are allowed to buy and sell".
i.e. when they seize drugs they don't auction them off because they are illegal. When they seize fake iPhones I'm sure they don't auction them off because they are fake and illegal.
Buy auctioning BitCoins it seems to me they're saying "It's a legal thing you are allowed to buy and sell".
Bitcoin is a legal thing you are allowed to buy and sell.
The Bitcoiners' dream is to have it be recognized as currency; as a commodity it's just fine, or did you believe all that Bitcoin activity is happening illegally somehow?
The Bitcoiners' dream is to have it be recognized as currency; as a commodity it's just fine, or did you believe all that Bitcoin activity is happening illegally somehow?
Didn't they seize a lot more BTC from Ross? I heard something in the amount of 150,000 coins.
Yes, but they have already sold them (tens of thousands) in previous auctions. This auction is from another bunch of coins seized from other law breakers.
> These bitcoins were forfeited in various federal criminal, civil and administrative cases, including:
>United States v. Carl Mark Force IV, Northern District of California (Case No. 15-0319)
>United States v. Sean Roberson, District of New Jersey (Case No. 14-565);
>United States v. Ross William Ulbricht, Southern District of New York (Case No. 13-06919)
>Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, Case No. 776075-14-0028
>United States v. 178.95842915 Bitcoins stored in MultiBit wallet XXXX4XDAd, Eastern District of Washington (Case No. 16-07009)
>Department of Treasury, Internal Revenue Service, Case No. 2015 9400 500008 01 001
>United States v. Approximately $200,979.15 Seized from Tradehill, Inc., held in the name of Megan Thompson, et. al. Eastern District of California, Case No. 14-02950
>United States v. $309,305.24 in U.S. Currency, etc., District of Maryland, Case No. 15-03474
>Department of Homeland Security, United States Customs and Border Protection, Case Nos. 2015330700002501, 2015330700002701, 2014330700023701, and 2014330700027201
So some are from him along with a mix of several other cases.
>United States v. Carl Mark Force IV, Northern District of California (Case No. 15-0319)
>United States v. Sean Roberson, District of New Jersey (Case No. 14-565);
>United States v. Ross William Ulbricht, Southern District of New York (Case No. 13-06919)
>Department of Justice, Bureau of Alcohol, Tobacco, Firearms and Explosives, Case No. 776075-14-0028
>United States v. 178.95842915 Bitcoins stored in MultiBit wallet XXXX4XDAd, Eastern District of Washington (Case No. 16-07009)
>Department of Treasury, Internal Revenue Service, Case No. 2015 9400 500008 01 001
>United States v. Approximately $200,979.15 Seized from Tradehill, Inc., held in the name of Megan Thompson, et. al. Eastern District of California, Case No. 14-02950
>United States v. $309,305.24 in U.S. Currency, etc., District of Maryland, Case No. 15-03474
>Department of Homeland Security, United States Customs and Border Protection, Case Nos. 2015330700002501, 2015330700002701, 2014330700023701, and 2014330700027201
So some are from him along with a mix of several other cases.
so the US government says Bitcoin is legit? good.
Forfeiture is a scummy thing by the feds, but I'll take a 2017 vette with those bitcoins.
Forfeiture is a scummy thing by the feds, but I'll take a 2017 vette with those bitcoins.
Yeah, why not just sell on a market like any regular person would do.
Which market, the shady one or the really shady one? At what price? Do Bitcoin exchanges support all-or-none orders? What if the size of the order is a significant fraction of the order book depth? etc.
Why doesn't the government use them to buy stuff from Microsoft or some other vendor they have that accepts BitCoin?
I didn't think this was so controversial...
United States vs Bitcoin wallet?
I hope the bitcoin wins.
I hope the bitcoin wins.
My guess is that "United States vs Bitcoin wallet" could be an instance of civil forfeiture, where instead of going through the steps required to prosecute someone, US authorities are putting literally money in the defense position and effectively automatically taking it. Which yields some tragically comedic titles like: The United States Government vs $25,180 in United States Currency.
https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United...
https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United...
Or my personal favorite, United States v. Approximately 64,695 Pounds of Shark Fins.
Incidentally, the shark fins won.
https://en.wikipedia.org/wiki/United_States_v._Approximately...
Incidentally, the shark fins won.
https://en.wikipedia.org/wiki/United_States_v._Approximately...
I was just wondering to myself "How the hell does the government win judgements against sums of money?"
John Oliver had a great segment on Civil Forfeiture a couple years ago: https://www.youtube.com/watch?v=3kEpZWGgJks
It's a total defecation on the 4th amendment is what it is.
edit:
What I mean is that the concept of civil asset forfeiture is a legal circumvention of the protections the 4th amendment is supposed to provide. The practice itself is probably illegal and should be challenged, and there should be a lot of uproar about the practice.
edit:
What I mean is that the concept of civil asset forfeiture is a legal circumvention of the protections the 4th amendment is supposed to provide. The practice itself is probably illegal and should be challenged, and there should be a lot of uproar about the practice.
The money doesn't appear to defend itself, and thus, boom: Default judgement.
Does money have Miranda rights? If money cannot afford an attorney can it get a public defender?
I don't believe so. It's also guilty unless proven innocent.
Maybe someone would pay a premium to own Ross Ulbricht's BitCoin.
> FOR SALE
> 2,719.32669068 bitcoins
> The required deposit to participate in this auction is $100,000.00 USD.
As of today 2719 Bitcoin equals $1,597,793 (Source: google)
This is a weird auction, putting Bitcoin risks aside, Bitcoin is a currency. Is there auctions such as "FOR SALE: 1,000,000€" ?
> 2,719.32669068 bitcoins
> The required deposit to participate in this auction is $100,000.00 USD.
As of today 2719 Bitcoin equals $1,597,793 (Source: google)
This is a weird auction, putting Bitcoin risks aside, Bitcoin is a currency. Is there auctions such as "FOR SALE: 1,000,000€" ?
For Sale: 10kg of gold. As of today 10kg of gold equals $X (source: google)
For Sale: X gallons of gas. As of today X gallons of gas equals $X (source: my local gas station)
For Sale: X gallons of gas. As of today X gallons of gas equals $X (source: my local gas station)
There was a story on HN just awhile ago, where it was ruled (albeit in Florida) that its not legally a currency: http://phys.org/news/2016-08-bitcoin-money-victory-backers.h... .
Sure, that's basically the foreign exchange market.
I'd guess the 100 grand is just to ensure they have only serious bids.
I don't think the US officially recognises Bitcoin as a currency yet.
"Yet"? Are you hoping for Bitcoin to be the next Liberty Dollar?
I'm not generally a fan of Bitcoin, but I know many people who are, and I wouldn't want them to go to jail.
I'm not generally a fan of Bitcoin, but I know many people who are, and I wouldn't want them to go to jail.
Whether you're a fan or not, Bitcoin is clearly being used as currency. It would help if those adjacent to it would treat it as such so that less people are taken advantage of.
It's extremely fortunate for Bitcoin that the government considers it a commodity, not a currency. The fact that creating Bitcoin is called "mining" instead of "minting" probably helped set that frame of reference.
If Bitcoin were a currency, then min(t)ing Bitcoin would be illegal in the US. You can look at Liberty Dollars for an example of the federal government cracking down on private mints, even when they don't claim to be making US Dollars.
And yeah it would be great if fewer people got taken advantage of or stolen from in the Bitcoin sphere, but I'm pretty sure that if you told Bitcoin developers they had a fiduciary duty to users, they would just quit or go into hiding.
(I am not a lawyer and this armchair sure is comfy)
If Bitcoin were a currency, then min(t)ing Bitcoin would be illegal in the US. You can look at Liberty Dollars for an example of the federal government cracking down on private mints, even when they don't claim to be making US Dollars.
And yeah it would be great if fewer people got taken advantage of or stolen from in the Bitcoin sphere, but I'm pretty sure that if you told Bitcoin developers they had a fiduciary duty to users, they would just quit or go into hiding.
(I am not a lawyer and this armchair sure is comfy)
This is a sale of bitcoins for USD. Of course there are foreign currency exchange markets?
Perhaps they want to use the money to buy something other than drugs and Reddit gold?
The Federal Reserve can probably deal with other foreign currencies.