Criminal Assets Bureau seizes 6k bitcoin, sale impossible without access codes | Hacker News Reader

Criminal Assets Bureau seizes 6k bitcoin, sale impossible without access codes

irishtimes.com

48 pointsedward62 comments

That's okay because asset forfeiture is about denying the convicted party access to the fruits of their crimes, and not about the incredibly conflict-of-interest-riddled idea that the state should be able to plunder those assets and profit from it... riiiight??

How is access denied if the private keys remain unchanged?

Because he's lost the keys - without the private keys, how will anyone access the funds?

In no real justice system could selling backyard weed justify the seizure of sixty million dollars.

How do you earn that much on "backyard" anything?

The answer is he didn't earn it on his backyard weed selling. Maybe he got the initial coins from that, but they may have only been worth $10,000 when he received them. It's just that with BTC price rise, it is now worth $60M

interest accrued on otherwise nefarious activity.

esoteric philosophical questions : if the base money that accrues interest is of 'immoral' origin, is the interest still 'immoral'? Is the act of saving money an action that has a base 'moral' precept? If it's a positive action, does that make the interest less 'immoral' than the money used to make it? What if the interest feeds a 'moral' charity?

Just stuff I think about with regards to finance, not that morality matters much practically in the real world.

Isn't that kinda the same as evidence generated from a unlawful action?

We could apply the same logic/law to that.

There are extensive bodies of law that deal with these topics, especially in Trusts law.

Happily I quit law school before getting any good at them.

He earned that much because the value of BTC skyrocketed. He was a small time pot dealer.

How can you stay a small time anything with $60 M in returns on the cash in your mattress?

Those returns are because the Bitcoin price went to the moon, not because of the pot. This guy could've became equally rich had he just bought a small amount of BTC at the right time.

Right, but that doesn't explain how you can stay small time with $60 M in cash in the mattress.

They did not seize 60 million dollars (CAB wouldn't seize money in dollars anyway...). They seized* 6000 bitcoins. The equivalent cash value in euros or dollars is completely hypothetical.

*and technically, they seized nothing without the private keys

Indeed, they did seize bitcoins. I thought the dollar equivalent would be obvious to those who read the article. Also, the CAB would absolutely (and has) seized foreign currency. They will seize cars, watches, real estate, documents, laptops, mobile phones, designer coats...pretty much anything they think they can auction.

You might be interested to learn that the price in euros or dollars is not hypothetical at all and is traded daily, 24 hours a day, on exchanges all across the world.

They did not seize nothing. As the article mentions, they seized the wallets which contain the private keys. Presumably, they are missing the password(s) to unlock the wallets.

No doubt there are other copies of those codes, but now Collins has plausible deniability :)

Seems to be a little bit of doubt though:

> Much of what he has told the Garda has been supported by a range of witnesses, including those who cleared his house, his landlord and others who helped him break up his bitcoin fortune into 12 accounts. Garda believe he has genuinely lost the codes for the accounts

But if they are in on the reward, they might just help corroborate his story in order to get a piece. Who knows?

they've corroborated that he owned a fishing rod which was disposed of.

even assuming the codes were stored there he could have 10 other copies of the same in other places and how would anybody know. they could be encoded in a simple way to make them unrecognisable and unusable to anybody but him.

No way would he be stupid enough to have these only on a single sheet of paper. Surely he considered the possibility of a fire, for example. And just because witnesses seem to think something only shows that he did the right thing with respect to them too. I might leave as much as $300 with a sheet of paper, but not $50M+.

There's no intelligence test required to become a criminal.

He sells weed so he's a criminal?

If they know the wallet address, any movements will be a giant neon sign screaming "hey, arrest me again!"

Fairly easy to pull off without any chance of getting caught. Get a tails VM and use some Chinese exchanger to change those coins to monero, veeeery slowly spend the monero.

Odds are you wouldn't be risking any significant punishment either.

Or use coinjoin

Also possible, but more difficult and significantly slower.

I mean, that would make for an interesting legal case. I feel that you could try and argue though that some Bitcoin 0-day was used to move the funds and retain your deniability...

Even the officers hope this happens one day (! good luck to them, if the tech existed the coins would be immediately worthless...)

"... officers said they were hopeful advances in technology would one day enable them to access the bitcoin so it could be sold."

Doubling down on perjury as a legal tactic is unwise.

I think it would only be interesting in that folks who think crypto is magically law-proof would discover that no, it's not. Not at all.

>Doubling down on perjury as a legal tactic is unwise.

This is Ireland we're talking about. Not the US.

Poor timing I guess.

https://www.irishtimes.com/news/politics/perjury-to-be-made-...

The obvious solution would just be to not say anything at all. For perjury to be on the cards here there'd have to be some next level stupidity involved.

Although, claiming that someone else could've done something isn't necessarily untruthful even if you did that thing yourself.

Are defendants even sworn in in Ireland? If not, a successful perjury prosecution seems rather unlikely https://data.oireachtas.ie/ie/oireachtas/bill/2018/112/eng/v...

I really can't imagine why the guy running away with the bitcoin would ever be compelled to testify under oath.

> This is Ireland we're talking about. Not the US.

Perjury being a crime predates the US.

As it so happens, I am Australian.

Ok, if this guy was in Australia why would he ever be compelled to testify under oath about this?

The scenario given was that the defendant would argue that the coins moved due to a vulnerability in bitcoin. That's a positive statement, not a refusal to answer.

Yes, and when would a defendant be making statements under oath?

In the "interesting legal case" that the original scenario envisaged.

testify vs argue

I don't think anything in the original comment suggested that they'd be under oath, that's something you came up with.

Not really perjury... no lying... just an argument that the burden of proof isn’t on you just because you’re the last known holder of the keys and some $ moved around.

It is simpler than that. You can exchange equally valued wallets with someone from another jurisdiction and then just say truthfully that it wasn't you. A good program will make a couple of thousand small feeless transactions that miners may possibly include over many many blocks and poof. Money becomes too spread out to trace effectively.

The schemes that a smart person can come up with, given a few days, are numerous.

The schemes that the many smart people in the legal profession have seen through, collectively hundreds of thousands of times over centuries, are several orders of magnitudes more numerous.

A good lawyer would be doing everything short of bodily tackling you before you compounded your problems by adding subversive accounting to perjury to criminal profits.

The law is like the Simpsons. It goes on for so long that nothing is left unexamined. The odds that you will think of something that they haven't are slim.

While I have the utmost respect for the profession of law (except for the fact that it produces politicians whom I abhor), I don't think they've had quite enough time to think through every eventuality in tech yet. I'm not even sure if crypto currency ownership through key control is encoded in modern laws (as it should be for all digital assets).

If you have interesting precedents though, please enlighten me. Accounting forensics are always interesting for finance people like me, and the blockchain ledger just makes it easier and yet more complicated.

The law is always catching up, but folks regularly overestimate the scope of what it has already seen. It's an engine for conducting analogous reasoning, and while technology is ever changing, people are fairly limited in scope.

Take the key control problem. The separation of ownership and control crops up in a number of places: corporations, trusts, real property, intellectual property, probably a bunch of other places I have no idea about. It's likely that one or more of these would map sufficiently cleanly that a judge would make a binding order.

I don't have access to law reports to do a quick look for relevant cases. If you thought STEM paywalls were bad ...

Hmm. I don't agree with you on the fact that almost everything will have some easy to map analogous precedent / law clause. But I do appreciate the fact that I know literally nothing about law and that any fantastical suggestions I make would be ignorant at best, like you point out.

The flip argument is that new cases arise constantly and that the law is always encountering totally novel circumstances. But by and large, most things have been done, or some echo has been. It's just that the novel stuff gets more press.

That's a very dangerous thing to do (as soon as the deal is one, one party can easily move the content of both wallets to a key only they control).

If they don't have the private keys and use them to move the balance to addresses that only they control, they didn't really seize anything.

Seize the day

The way I see it is that you can seize a car, airplane or ship without having keys for it. What's important is that the government considers those bitcoins as its property. So if anyone in the future is moving BTC from those addresses, they are infringing upon government property like someone who stole a police car. The government might even auction that right off, although the fact that they don't have immediate access probably reduces the value by a large amount.

It's like they don't know where the car is, only which it is, and put the vin in some stolen car database.

Bitcoin seems so terrible privacy wise. It's so much more traceable than cash. I don't know why people don't just use monero. That'd be like everyone on the planet drives the same car, and the only way to identify yours would be to have the keys to it. The analogy works because monero takes a long time to identify yours with your key - you have to check every "car". That's one of the major technological downsides to it unfortunately.

Bitcoin is ridiculously anti-privacy. The public ledger of every single transaction throughout history coupled with everyone knowing exactly how much funds you have in your wallet is kind of absurd from a consumer standpoint.

Good luck with that. After the coins are moved to various other addresses, then what? What if part of an address' balance is from a small transaction from one of these addresses?

> What's important is that the government considers those bitcoins as its property

"condiders", insofar as governments are concerned only reaches as far as their sovereignty does. In the case of Ireland, that IIRC, 12 miles from their shores [1]

[1] https://en.wikipedia.org/wiki/Territorial_waters

Wow this whole story is a lie. The cops actually thought they “seized” the accounts because they knew the addresses, but never had the private keys! What a disaster

Is there any actual way to "seize" a bitcoin collection without knowing the master key(s)?

You can blacklist certain addresses with certain law abiding exchanges, which is more like marked bills than a seizure. What happened here was obviously not a seizure, you’d need the private key(s) AND to have actually moved the bitcoin to a new secure wallet under your control before you could consider them seized.

You can't really. There's nothing stopping people from just moving them somewhere else, and then the ownership is anonymous again. If you blacklist all of the destinations, what if they send 0.00000001 to every single known exchange, are all of those addresses now on the blacklist? Of course not, this sort of thing is just nonsensical with an understanding of the system.

Of course you can. The regulated exchanges would (best case) just automatically remove the 0.00000001 BTC from the receiving wallet, or (worst case) freeze out the entire wallet indefinitely, while they send it back on the next block.

The regulated exhcanges have multiple forms of identification too so the recipient is screwed even if they manage to move it all before that happens.

What if the payment is made to their wallet? Do they "freeze" their own wallet?

The exchanges' wallet? In this hypothetical probably not, since the freeze is to prevent bad actors from siphoning the funds back out of the wallet, and the exchange isn't going to do that to itself.

While they'd heard it mentioned before, Criminal Assets Bureau discovers what "Bitcoin is unconfiscatable" actually means.

In other news:

- Seattle woman wins Kentucky Derby without having a horse

- Chicago man wins lottery without having winning numbers

Ouch

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