A German man is keeping $60M in Bitcoin from police
theverge.com
theverge.com
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?
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.
So most likely, both police and him are in a situation where collaboration by both is needed to get access to the bitcoins.
Which, if I was in his situation, is exactly what I would tell the police regardless of reality.
He'll also never be able to report it if he's ever robbed of that money.
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.
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.
TLDR: either the prosecutor is stupid, or they lie. I'm not sure which is worse.
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”?
Or both.
"Authorities have seized his digital wallet"
How do you seize a digital wallet when all you need to access or recreate it is a private key (or recovery text)? What have they seized exactly?
> The wallet.dat file is located in the Bitcoin data directory and may be encrypted with a password.
I guess they have the encrypted wallet.dat, but not the password for decrypting it.
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!"
Or move to the country next door.
For 60 mils, uprooting yourself is definitely an option.
With 60 mils USD in pocket. the list of "countries worth living in" becomes a lot longer than you may think.
You look at the culprit very, very sternly.
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.
I think it will be a lot less rare if digital currencies become a bigger thorn in a government's side.
Here is a story about such a case, but not crypto related - 17 years! [https://www.google.com/amp/s/abcnews.go.com/amp/2020/story%3...]
Lots of multi-sig schemes you could invent to make your funds accessible.
From reading the article, my bet is: neither do have any.
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.
The assumption you are making here is that the government has the right to steal that 60 million in the first place.
Basically the reason they can is because they have more people with guns. Turns out, when it comes to Bitcoin, those guns end up being less powerful.
This means that the basic assumption where a government can steal from its people is being turned up side down.
Governments have power because people lend them some of their own power.
People give governments power because governments promise to make them better off.
Breaking the concept of money has, historically, done the opposite of that.
As long as the person who knows the key remains within the jurisdiction of the "owner".
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.
Not impossible (I guess), but practically not possible either.