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Comment by throw101010 | Hacker News Reader

> The prosecutors accuse Harmon of a very unusual crime: remotely swiping Bitcoin...

As opposed to what, "locally" swiping Bitcoin?

> ... Bitcoin stored on a computer device the government had already seized in another case

Yeah that's your problem Mr. Prosecutor, you have no idea where bitcoins are "stored" or what the device you have seized is. Which leads me to think you are not qualified to "seize" this type of assets.

It's 2022, Bitcoin has been working practically non-stop since 2009, and governments and the medias have been claiming that only criminals/terrorists use Bitcoin for almost as long... you would think people in his position would know what private keys are and how to secure Bitcoin funds they pretend to "seize".

It's simple, like all crypto newbies this prosecutor has just learned: Not your keys, not your coins.

This apllies if you have keys and you are not certain you are the only one to have them... anyone else with these keys can/will most likely claim them before you.

View on HN

Uh, those are the reporter's words, not the prosecutor's.

If you read the indictment [1], the word "remotely" never appears, and it's pretty clear the prosecutors understand how Bitcoin works.

If anyone's clueless here, it's Gary Harmon, who showed up at his brother's court hearing, learned that the government had not yet secured the Bitcoin that it legally had a right to, then almost immediately moved that Bitcoin to other wallets, and... just figured nobody would notice?

[1] https://www.scribd.com/document/521749057/USA-v-Gary-Harmon-...

Government had bo legal right to the bitcoin. Innocent until proven guilty, means the government stole the bitcoin in a criminal attempt to deny him an adequate defense.

You can’t “steal” your own property.

The government agents involved are all felons under 18 U.S. Code § 241. Conspiracy against rights - https://www.law.cornell.edu/uscode/text/18/241 and 18 U.S. Code § 242. Deprivation of rights under color of law - https://www.law.cornell.edu/uscode/text/18/242

The problem us our country is so corrupt you have forgotten we have a constitution and have probably never heard of the above two statutes.

It's always funny to see someone who first talks about the presumption of innocence then going on to call huge groups of people felons without even knowing the details of the case.

As I understand it your (incorrect) reading of 241 is that when the government securely holds your property pending the final outcome of your trial that violates the clause of 241 that forbids a conspiracy to "injure, oppress, threaten, or intimidate any person".

If that was true detaining a person would be a much more serious violation than detaining your property.

Now I happen to believe that pretrial detention is almost never moral. However, it's pretty obviously not a federal crime for a judge to order someone accused of murder to be held in jail until their trial.

On the other hand, feds routinely seize defendants assets to prevent them from being able to pay for robust legal defense. Those assets aren't going to harm anyone, so the case for seizing them is much weaker than holding someone accused of violence in jail. In this specific case, the assets are alleged ill-gotten gains, but often that is not the case at all.

It doesn't seem to be a stretch that the feds "securely holding your property" does not cause injury when it interferes with your right to legal representation.

After all, posession is 9/10ths of the law. If the feds are holding it, its not really yours at that time.

Feds do this because they can’t win against well funded defendants.

That does not make it OK. The proper solution is one or both of:

- Make laws so simple that a layman can understand them, thus removing the need for professional lawyers, and their exorbitant fees.

- Have prosecution be equally well funded as a defendant.

Laws start simple. Eg, Code of Hammurabi. Then they get complicated as we run into more and more edge cases that need handling.

In good measure laws get complicated because simple laws get worked around and abused.

We see this in tech too. Email is a simple concept that's grown into a highly specialized territory because spammers will exploit everything they can, and the more holes you patch, the more complex the system becomes.

> the more holes you patch…

In protocols at least the solution is to design one that assumes a very hostile network and is inherently built for it. None of the old first generation Internet protocols are like that.

So for instance, Bitcoin? Yeah, it's not the worst out there, but it's far from layman friendly. That's already highly specialized territory.

There's a lot to dislike about cryptocurrency but in that department it does represent a newer generation of protocol that is designed for the modern "dark forest" Internet.

All protocols should be designed with the assumption that you will face a well financed adversary at least as smart as you are who wants to destroy what you are building. All protocol work is security protocol work. "The Internet is a dark forest."

> In good measure laws get complicated because simple laws get worked around and abused.

I can quote tax laws as counterexample. A rule like "you pay 2% of your revenue as a tax" is simple and pretty hard to abuse. A rule like "Take your revenue, subtract expenses (see this 250-page document for list of allowed expenses and the rules when then apply), and pay 20% of your remaining income as tax" gives a lot of room to interpretation and abuse.

Governments make laws complicated because that gives them power - it's pretty much impossible to live in a Western country right now and not break some laws on daily basis.

> I can quote tax laws as counterexample. A rule like "you pay 2% of your revenue as a tax" is simple and pretty hard to abuse.

Well, for one such a policy would bankrupt many people and companies and be bad long term. Eg, anybody living month to month with effectively nothing to spare would end up slowly losing everything.

And of course companies would work around that by making things not be revenue. Eg, instead a company just paying you $X, now you get a whole bunch of "free benefits". You live in company-provided housing and eat company-provided food, which doesn't count as revenue.

So rather than earning $1000 and paying $200 rent, you now earn $800 and pay no rent. Government now can't tax that $200 because it's not revenue. You just live in a house provided as a free perk by your job.

Next step is that the government notices and doesn't like it, so now there's an extra tax if you live in company-provided housing until you end up paying roughly the same amount of tax as before.

It doesn't matter how you cut it, anything "simple" will be worked around, the government will try to counteract it, and we've come full circle again.

What's the definition of revenue? Is capital gains revenue? This other law says capital gains are taxes at 1%. Do I pay 1% on the capital gains then 2% when I move it into my account? We allow deductions in order to incentivize investment - if you're getting taxed no matter what, you're incentivized to just keep the money.

I agree with you that everyone breaks at least some law on a daily basis, but I disagree that tax laws are based on governments wanting more power. They're based on a very complicated and chaotic mix of the incentives we want in society and lobbying by those who already have money and influence.

I believe you're completely correct. The current system is amoral; we should change it.

But unfortunately you don't have a right under the constitution to the legal counsel of your choice, and interfering with your ability to pay the legal council you want isn't a federal crimes government agents could go to prison for.

(One of the many reasons why is that the Supreme Court decided a few decades ago that prosecutors have absolute immunity for anything they do on the job, even if they deliberately violated the law.)

Do you remember the decision that gave prosecutors immunity? I've been toying with ideas for laws concerning malicious prosecution and I'm curious about the basis of the Supreme Court's decision.

This might help https://en.m.wikipedia.org/wiki/Absolute_immunity

Edit: If you're serious about this project you should read through Civil Rights Corp's cases.

You'll learn the most a clever, well-resourced team can push the existing rules in practice to hold governments accountable.

In my unexpert opinion a nonlayer can most efficiently get an impression of how an area of law sort of works by reading decisions from lower-court judges who dispense justice assembly-line style.

When you're reading a Supreme Court decision or a law it's incredibly easy to miss a procudure that makes any remedy inpractical.

For example, you might read through a whole process for deciding the merits of a complex argument a prisoner's civil rights were violated. But you'd be missing that prisoner's lawyers can only make an argument if that prisoner, without a lawyer, wrote the exact right words on a complaint form and handed it to a warden within (for example) two weeks of their rights being violated.

Get used to this search engine. And when you read about a case in the news, look it up. This (or a related resource) is usually how the reporter got their primary sources.

https://www.courtlistener.com/recap/

Hey Trump is looking for a lawyer who will tell him just that. No qualifications necessary (or desirable) except that you just tell him everything he wants to hear, and trust he won't decide not to pay you, lie to you expecting you to repeat it in court, throw you under the bus, say racist shit about your wife, then send an angry mob of confederate surrender flag wielding MAGA mouth breathers to burn your house down. Give him a call, he'll be pleased to her from you! Have fun.

Even without knowing the letter of the law to a T I'm aware that in a criminal case evidence is confiscated, assets are frozen, etc. during prosecution. It's standard procedure. I don't see how holding bitcoin from a money laundering case is evidence of government corruption. Sure, the CJ system is broken and awful... but your ideas of why are just incorrect.

> I'm aware that in a criminal case evidence is confiscated, assets are frozen, etc. during prosecution. It's standard procedure. I don't see how holding bitcoin from a money laundering case is evidence of government corruption.

As fas as I understand it, they didn't seize Bitcoins. They seized the computer, and the computer is still in the government's hands.

If they really wanted to seize Bitcoins, they could transfer them to the Wallet they own. Given the fact that they left them where they were, means they didn't seize them, and they can't complain that a person moved them somewhere else.

> The government agents involved are all felons

Pretty ironic this appears just a couple words after "innocent until proven guilty."

This is borderline sovereign citizen nonsense. The prosecutors and government agents did nothing wrong here.

On the other hand it's unthinkable that FBI has to bribe anonymous chinese miners and beg to confirm a transaction in a timely manner to seize bitcoins. What if they don't?

>It's simple, like all crypto newbies this prosecutor has just learned: Not your keys, not your coins.

The US government can throw your ass in prison for the rest of your life so yes, it is their coins. This is the basis of all government power and in a lot of cases, like this, it's good

What happened to Kevin Mitnick is a cautionary tale that you can be held for at least five years without bail before you get the opportunity to plead your case.

Except he was in jail because he was fugitive from violating probation on a earlier fraud conviction

Imagine sending in a hard-core, 2009-era bitcoiner with a single address containing 10k bitcoin. The bitcoiner isn't going to hand over his coins for any reason (including torture, torture of family members, bribery, etc). How does the US government own the coins by incarcerating the bitcoiner?

Just because you hide a big bag of cash where no one can find it, it doesn’t necessarily mean it’s yours, just that you have it.

If the US government says that it has lawfully seized your bitcoin, then by law the US government owns the bitcoin, even if they don’t possess it. If you’re successfully keeping it from them, they can and will punish you for it. Again, as FormerBandmate said, that’s the basis of their power.

Think of it this way:

A state actor has identified funds on a offshore bank account that they do not have a controlling access to. They did seize a computer that has been used in the past to access that bank account.

The bank accounts owner (or an associate) removes funds from that bank account. The state actor acts as a petulant child and claims by seizing the computer, they also seized the bank account's content - and then proceeds to arrest the bank account owner (or their associate).

No judge in their right mind would let that fly.

In your example, no, the account owner wouldn't have a right to remove the money if the account and not the computer holding the password, was legally seized by the government. The government so cannot use those funds as they please neither until a legal decision allows them to do (RICO maybe, or anti-Mafia laws in Italy allow for that after court decisions). Also in your example, the bank in a different jurisdiction will get requests from the government in question to freeze the account, which might or might not be followed through depending on bi-lateral agreements and which country is asking on which basis for the account being freezed.

I have no idea why crypto would be treated any different.

There is no third party to have agreements with. There is only the government, the account holder, and the private key.

You forgot the courts. The government seizing stuff (which can be a problem in itself) doesn't mean the government can spend / use the stuff as they see fit. Courts have a say in that.

That's the point: In my example, an actual seizure of the account has not happened. Just because a state actor declares an item seized does not make it so - seizure implies having taken possession of the item at question (see, e.g. [1]). This clearly has not happened in the crypto case.

[1] https://www.law.cornell.edu/wex/seizure

As another comment here notes: there is a different meaning behind the words 'seize' and 'control' when used by the government. Seizure doesn't equate control, and in the case of Bitcoin private keys, this difference is significant.

>The bitcoiner isn't going to hand over his coins for any reason (including torture, torture of family members, bribery, etc).

Lol. Lmao, even. Let's just suppose a completely different kind of human.

People have died for less. You are assuming everyone has the same kind of morals and ethics as yourself.

Hard to imagine dying for less than imaginary internet tokens.

I guess there are people who drive off cliffs and whatnot, but somehow that feels like an honest mistake and not as funny to me.

Morals and ethics somehow related to handing over your virtual money because someone is killing your family if you aren't?

Okay.

What's the point of 10k bitcoins if you can't buy you and your family a life free of the pain of being tortured by the government. Whose family is going to forgive them if they let their sons or daughters be mutilated and traumatised for the low, low price of 10k bitcoins?

Idk you're suggesting the existence of a human that, while not impossible, must be vanishingly rare. Perhaps you don't really understand what torture means?

There are people who have no one but themselves. It's much easier to imagine this when someone has no living relatives.

Some yes, but most people are happily giving up everything they own to avoid pain and suffering of themselves or their loved one.

This is nothing new and is proven throughout history.

It's also perfectly understandable that you'll choose the well being of your child or significant other over some money.

Isn't this just textbook rubber hose decryption? Nerds with families are easy to manipulate or intimidate.

Ah the old “violence makes it moral” argument.

The government cannot do those things under the law, but only by violating the laws.

Problem is they have done it so much you think its not only legal, but moral!

Innocent until proven guilty.

In democratic societies, the state has the monopoly on violence. This is, as opposed to totalitarian regimes, governed through laws passed by the people either directly or indirectly. Crypto or smart contracts do not circumvent those principals.

> governed through laws passed by the people either directly or indirectly

This is so disingenuous it may as well be outright fabrication.

There is is indirect way, were people vote for a form of parliament (the legislative) that then passes laws, and then there are systems, Switzerland comes to mind, where people vote directly on laws. Both approaches are equally democratic.

How exactly is that disingenuous?

I cannot be the only one that sees politicians promise things and then spectacularly not deliver when they get elected. If the folks you vote for don't do what you want and you cannot vote for someone that does, there is no way for you to influence policy with a "democratic" process. For most people "just get elected" is not an option, because for that to happen you need to be rich, well connected and relatively well spoken.

Oh dear, you really argue that every single parliamentary democracy in the world is not actually a democracy because, what, they are parliamentary? Something else?

No, in Iran the government has the same monopoly and uses it to pursue its own ends alright.

It’s the process that leads to its use, and the purposes that differ.

And how exactly is Iran a democratic society? I think I made a point about totalitarian regimes being different in the way the legitimize that monopoly and use it.

They didn't say it was? They were contradicting your claim that the state having a monopoly on violence is limited to democratic states.

A claim I never made, at least I hope I never did.

I misinterpreted your original comment. I suspect the other person may have misinterpreted it in the same way.

Iran gets trotted out as a strawman in these arguments, but its government is really quite democratic compared to many US allies which have the mere trappings of democracy painted on a dictatorship. Iran has an elected president, and a parliament and multiple parties. As I understand it, the biggest issue with the government as a functioning democracy is that the unelected supreme council can prevent candidates from running and and dissolve parties. I don't mean to defend its actions against protestors right now, which I believe are heinous, and the government is lacking in respect for many human rights, but as a strawman for absolute dictatorship it's a very poor choice. Democracy is a spectrum, Iran is definitely on the spectrum, and if we Americans look in the mirror and think deeply about the structure of our government, we might find out that we're a lot closer to Iran on that spectrum than we were taught in school.

https://en.wikipedia.org/wiki/Government_of_the_Islamic_Repu...

It is not a spectrum. USA and eu might be. But if someone above you can prevent your from running or electing then it is NOT democracy.

Once you are free to do so then may I say no one promise heaven on earth. It is bad human and good in democracy. Sort it out. It is hard. But it is not the same as other sort it out for you.

By your own definition, pretty much no countries, including the US, are democracies, as almost everywhere has mechanisms through which the courts can prevent you from running.

Separation of power, judicative, legislative and executive, are the basic principal of democracies. The other being, fair, equal and secret elections.

Bingo! Well you can’t have a perfect “pure” democracy but you want to try to get as close as possible. The court isn’t just a king who decides to veto.

The thing that makes Iran not a democracy is that all those bodies (parliament, president, parties) answer to the supreme leader and religious authority.

It’s not a democracy if the elected bodies all answer to unelected ones.

> It’s not a democracy if the elected bodies all answer to unelected ones.

Like the supreme court?

The Supreme Court of which country?

The same way US is a democratic society?

If two party system with hard barriers for a new party to enter needing additional approval from board consisting of the existing parties is a democracy, then so is Iran with all their limitations. Maybe a lesser one than US, but not that different.

I don’t think your “democratic society” will remain that way for long, unless your Putin, in which case Ukraine is eager to join your country.

Why did they seize his coin? Did the person who seized it back actually break into something?

Principles are fine and dandy, but why are principals of innocent until proven guilty ok to be broken by “democratic societies”?

I mean it’s just an appeal to might makes right. My mob is bigger than your mob, so I take what k want.

It’s like we’ve lost the foundation to what the idea of a free country was.

Anyways Bitcoin is stupid still.

Any state, democratic or totalitarian, gives itself the monopoly on violence or there won't be a state, only factions vs factions, large and small ones down to single persons.

> The government cannot do those things under the law, but only by violating the laws.

They can and they do

Feel free to explain to your lawyer how you're digging your own hole even further

Then we're supposed to hear sob stories about people who thought it was "just a prank" and got in serious trouble because they didn't know when to stop?

My passport has the wrong color. Banks often ask me for bullshit documents.

People are guilty by default on AML world and the burden of proof ALWAYS fall to the accused. This type of perversion of democratic values is loved and applauded by "well mannered and civilized" tech types whom are totes ok with de-risking strategies that are pretty much based on xenophobia. I'm yet to debate one of those oh-so-enlightened persons that didn't resorted to the "its your fault to have been born in the wrong place!" argument.

You know those people who love and pray to the altar of the almighty GDPR? They don't bat an eye to the fact that it doesn't apply to financial records.

It’s moral because he’s a scammer who stole money and violated the law. He shouldn’t keep ill-gotten gains because he’s good at using computers and his victims weren’t. If this were Edward Snowden (say what you want about his dealings with Russia in exile, what he did should not have been a crime) I’d have a very different opinion, but as it stands this guy is a scammer getting his just desserts

I'm unsure this is as reliable of an offensive strategy as it would seem.

For a lot of people, there is no amount of money they'd be willing to spend the rest of their life in captivity for - but for a great many with dependents I imagine there's probably a number at which you'd go "yeah, OK, I'll take that deal".

That being said, rotting in prison doesn't protect any of your stuff from seizure anyway so we're back to the parent's point again.

of course now anyone who can be traced to a wallet that interacts with these coins is now a criminal for receiving stolen goods, or obstruction of justice or probably a dozen other things.

A lot of crimes require mens rea, ie. being guilty would require knowing the bitcoins are shady.

And as the media keeps repeating bitcoin is heavily used for illicit & illegal activity so not only bitcoin itself (that none of the jury holds because those that hold it have been excluded, let alone any of them actually understand it) and then probably exchanging with very specific wallets in this case.. probably guilty despite what the defendant has to say for their actions..

While perhaps not criminal, receiving them could subject a person to asset seizure. Usually stolen things are seized whether the receiver knows they are stolen or not. The burden is then on the receiver to persue criminal, or more likely, civil action.

So when the bitcoin are traced to a washing service in a location where the FBI has no jurisdiction (so that they cannot go after the washing service), split into individual satoshis and then sent through hundreds of thousands of transactions before being put back into the wild in a format that is completely and totally randomized and then one day months or years later re-enter the FBI's jurisdiction you think that there's a chance in hell that they will be able to identify specifically which individual satoshis are illegal and which ones are not?

If I steal $1,000 and promptly donate $1,000 to charity, it is very likely that that money would be tracked down and returned.

On the other hand, if I steal $1,000 and make retail purchases over the course of twelve months less than $5 each, the monies would not be returned from the retailers to the victim of my theft. At that point it is up to the courts(civil and criminal) to force me to make amends to the original victim.

Your scenario is similar to the latter example for most of the end recipients. If an account with zero bitcoins receives a stolen bitcoin and sends it to one recipient, that recipient would certainly fall under the first scenario I put forth. As the transactions become more complex and diffuse, the latter scenario is more likely.

How is this not the kill-switch for bitcoin? Every bitcoin comes with the risk of having been in a wallet of a criminal. Since all transactions are kept forever, shouldn't every bitcoin be at risk of being seized?

Government doesn't even have to physically seize anything. They just have to say "transacting with these particular coins is illegal". The blacklisted bitcoin is now worth zero USD, as many individuals receiving money from sanctioned people discovered.

I honestly have no idea why bitcoin is still the most valuable cryprocurrency when projects like Monero exist.

You are right vis-a-vis sanctions and ( based on what I understand ) Monero at this time. I think the reason this is not a killswitch parent is referring to is that there is just too much money on the line for the government. LEOs are apparently still trying to figure out how do it right. Last bigger conference I was a part of representative discussed some of the less appreciated logistics ( for example, you can't sell that much of bitcoin and not tank the price for one ). It is different from auctioning Tony Montana's yacht.

Selling a giant pile of Bitcoin and tanking the price is a feature, not a bug...

That may be your personal opinion but meanwhile governments are actually supporting using Bitcoin, not trying to destroy it.

> I honestly have no idea why bitcoin is still the most valuable cryprocurrency when projects like Monero exist.

Because it simply can't be audited. What is the purpose of a public ledger if it is not auditable.

Don't get me wrong I love Monero, but the transparency of Bitcoin is desirable if you intend to enforce a fixed supply.

Also things like Taproot could give some privacy if they widely get used by wallets (by default for example).

Once blacklisted it'd be fun to transfer the BTC to as many random public wallets as possible.

To be pedantic, the BTC freshly mined has clean history.

>> you would think people in his position would know what private keys are and how to secure Bitcoin funds they pretend to "seize"

How exactly would you have handled this differently? They were well aware the account could be recovered via mnemonic, but they couldn't move the funds because they didn't have the PIN.

Sounds like they did not truly secure the crypto then. Shouldn't call it seizing if you don't have it digitally in your own secure wallet.

Wait until the prosecutors learn about gas fees. XD

But what will they say at the press conference then?

They should say they have identified the account. I cant see them having anything else.

Don’t call it seizing then.

obviously if they call it seizing and are willing to make the case in court that they had it seized, then the 'stealing' of it is a separate crime that probably has even worse penalties given that the argument would be it was stolen from government secured storage. Which I guess would make for an interesting case.

If they don't charge for another theft then it would be obvious that they don't believe enough in that they had it 'seized' and that what happened was a 'theft'.

on edit: I guess I need to go find it on archive.org to figure out if that has happened or not though.

Locally swiping = physical access to media with the keys. Remote = remote access to such media, or getting the key some other way remotely.

> as opposed to what?

There are more words in that sentence. Are there other examples where someone "remotely [swiped] Bitcoin stored on a computer device the government had already seized in another case?"

They seem to define "stored on service" in this case as "accessible only with access to device." It's an interesting case: is it harder to recover physical assets from a police storage locker than digital?

> It's an interesting case because it's harder to recover physical assets from a police storage locker than digital.

I feel like you missed the whole point the comment you replied to made. If the person who stored the cryptocoins on the physically seized computer had a copy of the private keys on another computer (COMPLETELY NORMAL) and the prosecutor never transferred the coins making the assumption that physically holding them was good enough, then that is an invaluable lesson they just learned.

As the previous comment says, if two people have access to the private keys for a wallet, whoever gets to it first is the real owner.

So let's flip it: how long will it stay that way: where law enforcement is unaware they've left ostensibly seized assets unsecured?

that goes right back to OPs point. If LEO are leaving these "seized" assets unsecured, they are simply not qualified to be doing what they are doing.

To directly answer your question, forever. Policing is sufficiently distributed and poor at retaining or integrating new knowledge that I am sure we will see these amateur-hour mistakes being made for as long as crypto exists in its current form.

Modern policing has not changed much since its inception with the Met Police and Robert Peel.

> forever

Good! Nothing to worry about then? Our coins are forever un-seizeable?

Robert Peel? Nuance please.

FBI hires external consultants (“experts”) when there is $311 million at stake. In this case I’m sure they hired at least one crypto expert. In other words, they don’t need to understand private keys, pins, and passphrases in detail in order to be effective.

But I was told "we will see these amateur-hour mistakes being made for as long as crypto exists in its current form," it sounds like the "crypto experts" they're hiring make that false.

My coins are seizeable after all!

It’s a moot point. If BTC is seized or forfeited to the US government, and the (co-)owner later transfers them out of the original wallet, it will likely only accomplish the addition of felony criminal charges. It is an assist to the federal prosecutors. Case in point, Gary Harmon, who probably wouldn’t be on trial otherwise.

um... $311M will set you up _very well_ for life in many, MANY countries. you just need to get to one without US extradition (or without US extradition for this activity).

So, very worth the extra criminal charge if you've been thinking ahead.

In the very unlikely dream scenario you mention, you are alone in a disreputable nation with no connections. You are weak and a tempting target for blackmail, robbery, kidnapping, and extortion. A bounty is placed on your head by the most powerful nation in the history of the world.

You would think the failed track record of knowledgeable criminals like Gary and Ulbricht would convince the crypto-anarchist losers that their fantasies are implausible, but for some reason it never happens.

> A bounty is placed on your head by the most powerful nation in the history of the world.

Seriously? The US does that?

I interpreted it as a sort of unofficial bounty. The US will announce that someone is Wanted and the story will inevitably break that they are in possession of $311m - so if you find that person and are determined[0] you can collect a bounty of sorts

[0] https://xkcd.com/538/

i would say that the large cash rewards given for information leading to the capture of folks on the FBI's Most Wanted list qualify as bounties.

Or issuing a red notice through Interpol, that usually covers it as well. Especially if said fugitive is not as connected as the Marsalek guy from Wirecard or was granted asylum somewhere.

>and the prosecutor never transferred the coins making the assumption that physically holding them was good enough, then that is an invaluable lesson they just

The prosecutor didn't make that assumption. The prosecutor was unable to move the bitcoin because the prosecutor didn't know the PIN.

So they'd seized a safe that contained a note saying where the money/Bitcoin were hidden, but they didn't have the combination to the safe, and they didn't know if anybody else had a copy of the note.

Calling those "seized bitcoins" is definitely stretching the truth in my opinion. And the Government,ent/prosecution knew this - from the article:

"As a backup, Trezor hardware wallets can generate a “seed phrase,” a combination of as many as 24 words that can re-create those private keys on another device. In essence, anyone who knows the magic words and an additional PIN can take control of the Bitcoin. Unplugging the wallet device and physically locking it away is no protection. Brown warned that Larry could remotely take Bitcoin and that the government would be powerless to stop it. “Until we can secure them and transfer them to a government wallet, those are available for him or his family members to transfer,” he said in court. US District Judge Beryl Howell granted bail anyway."

Having said that, the brother was an idiot for ever thinking he'd get away with it. Unless he was going to torch his houde and fly to Belieze before the cops caught up with him, he was bound to get caught. As the article posts out:

"An informant told them Gary had asked his advice on Bitcoin gambling services, records show. The source believed Gary wanted to use them to mix Bitcoin he took from Larry. Gary is “not the sharpest tool in the shed and did not think through the consequences for his brother” before he moved the Bitcoin, the informant said."

Seizing is a legal construct. It's not "I'm grabbing hold" seizing. It's the "I've had a judge validate that legally I am now the owner" variant.

Seems like this legal construct is very inefficient at "seizing" bitcoins.

Bitcoin is a bearer asset like no other. A house, cash, your gold stash, etc., when "seized", can be used by the state without consulting you once you are put in a hole (rightfully or not).

The state has to adapt to this kind of new asset. The closest that existed before was burying your tangible assets somewhere without anybody knowing about it. But this is just not feasible for many assets obviously, and still very cumbersome when you want to use them. With Bitcoin you just need to generate private keys offline properly to achieve the same purpose.

The state will eventually just require that exchanges check the history of any bitcoins they touch against a list of seized coins. There's not much you can do with a big pile of illicit cash if everyone you'd want to transact with is checking the serial numbers.

Yeah, it's like "We don't actually have the money/bitcoin in our posession, but as soon as Gary started spending the sequentially numbered bills and/or moving the permanently trackable by design Bitcoins, we can show up and arrest him for having stolen them from us."

Like the informant said, Gary is not the sharpest tool in the box.

> if two people have access to the private keys for a wallet, whoever gets to it first is the real owner.

I'm not a lawyer, but I'm pretty sure that's not how laws work. My son has a key to my car, but if he took it and ran off to seek his fortunes, that doesn't make it his car.

It’s like ‘seizing’ a copy of digital pictures by a well known photographer (or a hard copy of the camera film reel) without actually being in control of the original pictures.

And being surprised that another person got access to the photos and sold the originals on the market to another buyer.

It didn’t require breaking into the police evidence locker to make copies.

The key difference here in this analogy is that with pictures the cloned digital assets might have some value but not securing the original keys is like not securing the copyright.

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