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Comment by PaulWaldman | Hacker News Reader

>Specifically, law enforcement located 50,491.06251844 Bitcoin of the approximately 53,500 Bitcoin Crime Proceeds (a) in an underground floor safe; and (b) on a single-board computer that was submerged under blankets in a popcorn tin stored in a bathroom closet.

It's interesting how the defendant tried to hide his bitcoin holdings in very low-tech ways.

The utility ease of holding bitcoin is apparent with this seizure. What other asset could you hide the equivalent of $1B USD in a floor safe and a popcorn tin and without having to use a 3rd party custodian?

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The potential value-density of crypto is unmatched, but I'm not sure it is "easy" to store in a manner like that.

If another resident of Zhong's household had discarded the popcorn tin, he could have been out $1B. It's is difficult, but not impossible (see fat-finger transactions) to do that with other asset classes.

Agreed, the risks here are pretty high. Even just some catastrophic disk failure.

Holding a large amount of cryptocurrency without multiple backups spread around various geographical locations is foolish. So ultimately to store cryptocurrency securely, its never actually easy when you get down to the nuts and bolts of it.

Steganography might've been interesting way to deal with it, make big QR code with credentials to 1M wallet and hide 1B wallet info as steganography in that picture

Who said he didn’t have any other backups elsewhere?

Impossible to prove he didn’t have his private keys backed up elsewhere.

"There's always money in the banana stand!"

> The utility ease of holding bitcoin is apparent with this seizure. What other asset could you hide the equivalent of $1B USD in a floor safe and a popcorn tin and without having to use a 3rd party custodian?

Back in the day, the answer would have been bearer bonds, but they're no longer popular instruments.

> bearer bonds

The financial instrument of choice for movie heist villains from the 1970s to early 2000s.

They’re still relevant in that there’s always a chance someone may ask you to “do a Die Hard.”

And the Italian Mafia until at least 2009!

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

> The total value of the counterfeit bonds was estimated at approximately one percent of total U.S. GDP in 2008

What a fascinating story. Very mysterious...

> The Financial Times also reported that the two suspects "had been released" by Italian authorities.

I guess they helped direct the police to the actual counterfeiters.

> An earlier billion-dollar bond case was recorded in 2002, when the United States Court of Appeals for the Seventh Circuit, located in Chicago, heard a case from two men who sought $100 billion from the Federal Reserve Bank of Chicago.

So two guys tried to bring a fake bearer bond worth $100B and tried to cash it out? That's hilarious. It also sounds like they didn't even get in trouble.

Good lord, that story is insane.

Some choice excerpts:

> ... Japanese nationals in their 50s ... who had attempted to enter Switzerland with a suitcase ... containing what ... appeared to be U.S. Treasury Bonds worth $134.5 billion.

Enough to buy a couple of Twitters!

> The Financial Times also reported that the two suspects "had been released" by Italian authorities.

??????????????????????

edit:

> On September 18, 2009, a similar incident was reported ... by the Italian financial military police ... involving two Philippines nationals smuggling purported U.S. Treasury bonds valued at approximately $180 billion

Why do these involve Asian nationals? I'm just not a good enough crook to determine the advantage here...

> On February 17, 2012, it was reported that Italian police had seized $6 trillion in counterfeit U.S. bonds....

If you're gonna commit a crime, you might as well swing for the fences, eh?

This is Dr. Evil type stuff!

> Why do these involve Asian nationals? I'm just not a good enough crook to determine the advantage here...

Kansas City shuffle. You find someone who wants to help run the con, but they're actually the mark.

New bearer bonds were outlawed forty years ago is why.

The world extends beyond the US. The Panama Papers showed that bearer bonds were alive and well all the way until the mid-2010s, and Panama itself only phased them out in 2015.

Which is why I think it's absurd to think it's a coincidence that the rise of crypto happened at the exact same time world financial task-forces snuffed out bearer bonds and offshore anonymous accounts.

I wonder what percentage of old companies are still owned by « bearer » shares.

At least investment/corporate bonds usually expire, so the bearer ones eventually wash out.

The money would have probably would of been safer stored as 12 words on an unhidden disused iPhone.

A 4D chess move would be 12 1-word game saves on an old GameBoy game cartridge that is hidden amongst hundreds of other GameBoy cartridges.

People have memorized pi out to absurdity - surely one could memorize 192 bits with enough incentive?

The first 12 words of the last paragraph of the 42nd page of your favorite book.

For comparison at $14k an ounce you would need 72,000 oz of rhodium, the most valuable PM, in order to hit a $1B.

Antimatter is allegedly valued at $2,700,000,000,000,000 per gram, so you could fetch a billion for 0.37 micrograms of it. Don't try storing it in a popcorn tin, though.

I mean, the magnetic field to hold it doesn’t weigh anything either.

That's more of a manufacturing cost than a market price, isn't it?

Sounds like it was just stored on a Trezor or Ledger hardware wallet.

Presumably this would be the case with any purely-digital asset class that has the ability to be encapsulated in a physical token or offline digital storage device.

the problem with that type of utility being that maybe the defendant was the only person who could "cash in" these bitcoins... an untimely traffic accident away from another 50k bitcoins "lost" without the password to recover them...

and no encryption apparently too

This is baffling. It would be remarkably easy to memorize 12 words, then keep no active wallet anywhere. When you want to send coins, start up a desktop wallet, enter the 12 words, send some Bitcoin, then delete the wallet.

If this was a really old Bitcoin wallet, it could be from before the "12 words" thing. IIRC, older wallets randomly generated each key, instead of deriving them from a seed passphrase (which also meant you had to be really careful with your backups, since an old backup of the wallet wouldn't have its newer keys).

I am sure you’re right. But you could just send the funds to a new address in the new wallet. He could have done that at any point in the last 5+ years.

Would he want to have all the funds in 1 wallet?

(I understand these hardware wallets let you load up as many as you want.)

He was more or less doing that already anyway. He could at least have used an even moderate amount of modern Bitcoin opsec.

And one day you hit your head and can't remember the words anymore.

maybe buy twelve items that represent the words and have them around the house

I saw that movie!

What is the movie?

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