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Comment by giancarlostoro | Hacker News Reader

> 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.

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>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.

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 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.

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/

> 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.

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!

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