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United States Bitcoin The Almighty Buck

US Government To Convert Silk Road Bitcoins To USD 408

Posted by samzenpus
from the real-cash dept.
angry tapir writes "The founder of the Silk Road underground website has forfeited the site and thousands of bitcoins, worth around $28 million at current rates, to the U.S. government. The approximately 29,655 bitcoins were seized from the Silk Road website when the Federal Bureau of Investigation (FBI) moved to close it in late September. 'The United States Marshals Service shall dispose of the Silk Road Hidden Website and the Silk Road Server Bitcoins according to law,' wrote Judge J. Paul Oetken, of the U.S. District Court for the Southern District of New York, in a court order that was issued this week. The ruling represents the largest-ever forfeiture of bitcoins. 'It is the intention of the government to ultimately convert the bitcoins to U.S. currency,' said Jim Margolin, a spokesman for the U.S. Attorney's office for the Southern District of New York."
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US Government To Convert Silk Road Bitcoins To USD

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  • by Anonymous Coward on Friday January 17, 2014 @03:05AM (#45983515)

    Are there even enough BTC exchanges out there to actually convert that much BTC into USD?

    If there aren't, and the US government is persistent enough, wouldn't they be able to effectively "lock out" everyone else from getting money out of the system by basically draining the exchanges dry?

    Like it or not, BTC is worthless unless you can exchange it for IRL bucks. It's a cute experiment and all, but at the end of the day your average shop keeper has to turn his BTC into something he can pay his rent with. If the US government is somehow able to effectively launch a "DoS" attack against all the exchanges, then what is going to happen to BTC?

    • by radiumsoup (741987) on Friday January 17, 2014 @03:07AM (#45983527)

      you're right... unless his landlord takes bitcoins.

      • by Anonymous Coward on Friday January 17, 2014 @03:35AM (#45983655)

        That's such an awesome argument. I hear it all the time from BTC fanatics.

        "Well if such and such accepted BTC, there'd be no problem. It's their fault for not accepting BTC!".

        In what fucking universe do you exist in where this is a logical rebuttal to "I live in the real world, and my real world landlord doesn't accept BTC"? Right now, I can't buy groceries with BTC. I can't pay for parking with BTC. I can't take a friend out for lunch and pay with BTC. I can't buy a car from a local dealership with BTC, I can't go see a movie in the theatres with BTC.

        I can exchange BTC for my local currency and then go about my business, but that's about it.

        So really, I have no idea what dream world you live in where BTC is some magical universally accepted currency, because that isn't the universe we all occupy at this exact instant. The GP was right, and it's a legitimate question. What happens to the BTC market if the US government basically blocks all the exchanges by hitting them all with $23M worth of withdrawals?

        • by Anonymous Coward on Friday January 17, 2014 @03:55AM (#45983743)

          You arguments about Bitcoin's level of acceptance can be equally applied to PayPal in 1999. There where almost no sites accepting PayPal balance and you certainly could not pay your groceries and rent with PayPal. If someone sent you money with PayPal, all you could do was withdraw it to your bank account in local currency and that was about it.

          While I'm not claiming Bitcoin is comparable to PayPal, you arguments are weak. Bitcoin is already serving niche markets that can't take PayPal, say online drugs. It also enables deals that would not have been possible with reversible payment methods. Between the high fees of Visa, NSA's prying eyes and PayPal's overall suckiness, cryptocurrency like Bitcoin really has place.

          Should you "invest" in Bitcoin ? Probably not.

          • by Krneki (1192201)

            Even if the crypto-currency would be limited to the illicit businesses it would still make it prosper greatly. There is a market for anonymous, government/tax free currency.
            They might have sized the silk road website, but did they catch the suppliers and the dealers? No? Then this is a perfect real world example on how bitcoin can work for this type of business.

          • by Ash-Fox (726320)

            You arguments about Bitcoin's level of acceptance can be equally applied to PayPal in 1999.

            In 1999 I could retrieve the Paypal balance to my bank account without any sort of exchange or going through middle men. How do I do that with Bitcoin?

            • by CastrTroy (595695)
              To be fair, PayPal was/is the middle man. You could keep your money in PayPal, in which case you couldn't do a whole lot with it, or you could remove your money from PayPal, but that required a service charge. Ideally, I'd be able to securely send money to a retailer, without giving them my credit card number or any other private information, and they could just send me the goods. This is what BitCoin is trying to solve. Giving the ability for the buying party to send money directly to the seller, withou
          • by jratcliffe (208809) on Friday January 17, 2014 @10:28AM (#45986181)

            You arguments about Bitcoin's level of acceptance can be equally applied to PayPal in 1999. There where almost no sites accepting PayPal balance and you certainly could not pay your groceries and rent with PayPal. If someone sent you money with PayPal, all you could do was withdraw it to your bank account in local currency and that was about it.

            This is exactly why PayPal is a completely inaccurate analogy. Paypal wasn't a currency, it was a payment method - you knew that, if you accepted Paypal, you had a guaranteed way to turn $X in Paypal balance into $0.95X in your checking account. For bitcoins to be in any way similar, you'd have to have a reliable third party willing to exchange them for USD/EUR/JPY at a fixed, or close to fixed rate.

        • by Kjella (173770) on Friday January 17, 2014 @05:14AM (#45984035) Homepage

          No really, I have no idea what dream world you live in where BTC is some magical universally accepted currency, because that isn't the universe we all occupy at this exact instant. The GP was right, and it's a legitimate question. What happens to the BTC market if the US government basically blocks all the exchanges by hitting them all with $23M worth of withdrawals?

          Withdrawals? Do you think it's some kind of bank account? It's an exchange rate, set by buy and sell offers. Now the government could of course say they'll sell these, all at once and at any rate and the exchange rate would tank to zeroish because they'd fill every buy order but all I'd have to do is put up an offer for $0.001 / BTC and I'd get all the government's bitcoins for $23. Which would, given that they were trading for $1000 before, probably be a very good deal. In fact so good that somebody would probably scoop them up for $1 ($23,000) or maybe $100 ($2.3M), if they think this dip is purely market technical and temporary. No matter exactly where the exchange rate would end up nothing would be "blocked", sure some of the speculators would potentially lose a lot of money/potential profit - particularly if they were forced to cash out at the bottom, just like in the stock market - but trade would resume at whatever the new price would be. And eventually the government's store of bitcoin would be exhausted and their influence on the price gone.

        • by geekmux (1040042) on Friday January 17, 2014 @05:32AM (#45984109)

          That's such an awesome argument. I hear it all the time from BTC fanatics.

          "Well if such and such accepted BTC, there'd be no problem. It's their fault for not accepting BTC!".

          In what fucking universe do you exist in where this is a logical rebuttal to "I live in the real world, and my real world landlord doesn't accept BTC"? Right now, I can't buy groceries with BTC. I can't pay for parking with BTC. I can't take a friend out for lunch and pay with BTC. I can't buy a car from a local dealership with BTC, I can't go see a movie in the theatres with BTC.

          I can exchange BTC for my local currency and then go about my business, but that's about it.

          So really, I have no idea what dream world you live in where BTC is some magical universally accepted currency, because that isn't the universe we all occupy at this exact instant. The GP was right, and it's a legitimate question. What happens to the BTC market if the US government basically blocks all the exchanges by hitting them all with $23M worth of withdrawals?

          Replace BTC with USD in your entire statement, and you'll have your answer as to why everyone (including governments) sees the USD as some sort of "magically universally accepted currency".

          On top of that, who the hell pays with cash anymore? The true universally accepted currency is the one sitting behind that piece of plastic you keep swiping everywhere. If that happens to be dollars, pesos, or rupees, it doesn't really matter, because the conversion all happens in the background at your bank. Because of this, there is little or no reason BTC couldn't start up their own credit card and BECOME as universally accepted as anything else. The only thing stopping this is the current "magically universally accepted currency" and all the corruption behind it.

          • by martin-boundary (547041) on Friday January 17, 2014 @08:57AM (#45985197)

            Replace BTC with USD in your entire statement, and you'll have your answer as to why everyone (including governments) sees the USD as some sort of "magically universally accepted currency".

            Totally. wrong. The magic words that exist on USD and don't exist on BTC are "legal tender". It means the bad boys with guns of the US government protect the purpose of your USD's on US soil, as a means of exchanging goods and services. In other words, currencies become accepted because regional powers are willing to kill, maim, and imprison if need be to make it so.

        • by oodaloop (1229816) on Friday January 17, 2014 @05:33AM (#45984115)

          I can't buy groceries with BTC

          Can you use gold to buy groceries? What, they don't accept gold at the supermarket? I guess it doesn't have any value, other than being able to exchange it for cash. What a waste!

          • Value of Gold (Score:5, Interesting)

            by Firethorn (177587) on Friday January 17, 2014 @06:39AM (#45984407) Homepage Journal

            Gold is at least pretty and useful in a number of industrial and electrical applications.

            Of course, I don't trade in gold coins anyways - assessment costs* will eat up any 'profits' from gold price increases 9 times out of 10.

            *To determine the purity of the gold hasn't changed since you got the coins.

            • by oodaloop (1229816)
              OK, switch gold with Google stocks. Or savings bonds. They're not pretty and don't serve any pupose other than being tradable with cash, and nobody accepts them for payment in lieu of cash.
        • by thunderclap (972782) on Friday January 17, 2014 @05:51AM (#45984211)

          Overstock.com is taking BTC. So are many others. If you actually look back in our history you will see that the dollar didn't reach wide acceptance to post civil war. So BTC is a viable currency in its growth stages. You being a luddite is fine. Its your right. Just don't whine when your Landlord in 2025 does only take BTC.

        • by michelcolman (1208008) on Friday January 17, 2014 @06:30AM (#45984365)

          Right now, I can't buy groceries with BTC.

          Wrong. Whole Foods accepts bitcoin.

          I can't take a friend out for lunch and pay with BTC.

          Wrong again [bitcoin.it]

          I can exchange BTC for my local currency and then go about my business, but that's about it.

          Overstock.com, Amazon, CVS, Target, Victoria's Secret, Zappos, the list keeps growing.

          Of course most of these stores actually use a payment processor that immediately converts the bitcoins to USD for them, but if more and more stores start accepting it, at some point the currency may become so practical that such conversions will no longer need to be made. If a company does business with another company that accepts bitcoin, they may as well take bitcoin from their clients and then use those bitcoins to pay their suppliers. Transaction fees are much lower than those for credit cards, you don't even need any middle men.

        • I'm no Bitcoin apologist (couldn't care less either way). However -

          "Scots cafe becomes first to accept online currency Bitcoin as payment

          13 Jan 2014 00:01
          THE Brooklyn Cafe, in Glasgow's Shawlands, is the first restaurant in Scotland to allow customers to settle their bills using the internet-based digital currency system, which is faster than using traditional debit or credit card."

          http://www.dailyrecord.co.uk/news/scottish-news/scots-cafe-becomes-first-accept-3015672 [dailyrecord.co.uk]

        • by log0n (18224)

          Earlier this week I purchased a california king bedroom set (mattress/frame/bedinabagset/headboard/nighttables), new dressers, a 39" lcd tv, some moderately nice jewelry including a very nice watch (kid dropped mine) and an ipad mini for my wife's upcoming birthday, solely using BTC (~1.7btc) through Overstock.com.

          [ upgrading the bedroom ;) ]

          Outside of actual cash, every valuable asset you own also needs to be converted to cash before you can use it. You can't buy groceries with a paid off car. You can't pa

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      There is not enough liquidity on all the exchanges to sink such a large amount. It will drive the price rock-bottom if done in one swoop. What you need to do is milk it for a few months. This way the market can absorb the Bitcoins and you can get all of the 28 million.

      What about the rest of the Silk Road stash ? It's worth 600 million dollars at today's prices.

      I love it how the government ends up being the largest winner of the Bitcoin bubble. "Our commitment for America in 2014: make the junkies and intern

      • Would make sense if the seized bitcoins could pay for more then one day of Medicare.
      • Unless that's their plan.

      • by Njovich (553857) on Friday January 17, 2014 @05:12AM (#45984027)

        According to bitcoincharts.com, trading volume in the past 24h was over 540k bitcoins. Not sure what part of that is from exchanges, but I doubt 30k extra bitcoins are going to really be earth shattering. I could be wrong though, Bitcoin prices are volatile and this kind of news can affect things and cascade.

        • by Anonymous Coward on Friday January 17, 2014 @06:46AM (#45984439)

          540K is the total number of bitcoins moved by the network, including coins shuffled around between wallets of the same persons. It has nothing to do with trading volume.

          If you tally up all daily volumes listed here in the last column: http://bitcoincharts.com/markets/ you get about 40K bitcoin traded daily. Bear in mind that most of that is daytrade, money circulating inside the exchange with equal buying and selling pressure. That statistic is also impossible to verify, many exchanges publish fake volume data to bolster perceived market share.

          A 28K exit into dollars will definitely dive the price and block any single exchange.

      • by Cigarra (652458)
        Who's to say they HAVE to get 28 million out of it? Just like any forfeited assets, they can make a judicial auction and sell the BTC to the highest bidder, with a base price of, say, 100$/BTC, and let it go from there.

        And they don't even need to use any exchange at all: the highest bidder can write a big fat check to the FBI, and they send the coin to whatever address he says.
    • by 1s44c (552956)

      Or the US government pushes the price down and lots of people buy in with the expectation that it will go up again.

      This might help spread BTC around to more people.

    • If they sold it all at once on MT gox they would clean out the order book but only by a factor of 2 or so. Not sure how large a proportion of the bitcoin markget gox makes up nowadays.

      I think it's fair to say they could certainly cause a sharp downward price shock but it's unlikely they could make it impossible for others to trade by this method.

    • by pla (258480)
      Are there even enough BTC exchanges out there to actually convert that much BTC into USD?

      The BTC economy has a market cap equivalent to USD 11.5 billion. Whether or not the economy can cover that trade doesn't present a problem.

      As the more interesting problem, only a fraction of that value ties back to actual USD. CNY has a much bigger contribution to that total value, along with German Euros (oh, like the EU has any other kind right now? ;) ) and a wide basket of other players outside the US.

      Will
    • Seriously, you think the U.S. Gov't is going to register at Mt Gox or Bitstamp and sell the SR coins there?

      What do they do with seized gold? I'm pretty sure they don't go to the nearest pawn shop to sell it. In fact, I'm pretty sure they auction it.
    • by mellyra (2676159)

      Are there even enough BTC exchanges out there to actually convert that much BTC into USD?

      I'd expect them to auction off the bitcoins just as they do with other forfeited assets.

    • by arisvega (1414195)

      If there aren't, and the US government is persistent enough, wouldn't they be able to effectively "lock out" everyone else from getting money out of the system by basically draining the exchanges dry?

      I don't think it works that way. Usually it is not the exchange's task to convert bitcoin to fiat: the exchange is just a middleman that (optimally) guarantees that a transaction between two parties will go smoothly. This is mainly done by having an online 'balance' of bitcoin, same as having a balance on a bank account. The exchange company will allow to 'withdraw' your remainder if you wish, by sending you bitcoin to an address of your liking: but if you want money for bitcoin, this will be wired (or oth

    • by Dcnjoe60 (682885)

      Are there even enough BTC exchanges out there to actually convert that much BTC into USD?

      If there aren't, and the US government is persistent enough, wouldn't they be able to effectively "lock out" everyone else from getting money out of the system by basically draining the exchanges dry?

      Like it or not, BTC is worthless unless you can exchange it for IRL bucks. It's a cute experiment and all, but at the end of the day your average shop keeper has to turn his BTC into something he can pay his rent with. If the US government is somehow able to effectively launch a "DoS" attack against all the exchanges, then what is going to happen to BTC?

      What is interesting about this is that depending on what the US does, it can really help or hurt BTC. For instance, in an effort to unload them, the US could heavily discount them, driving down the value of all BTC. OTOH, they could hold firm and demand a high price, therefore inflating the BTC value. Regardless of how they do it, they inadvertently just validated BTC as a legitimate currency.

  • by dnaumov (453672) on Friday January 17, 2014 @03:08AM (#45983533)

    According to the law, the guy hasn't actually been convicted of anything yet, so WTF?

    • by Kaenneth (82978) on Friday January 17, 2014 @03:13AM (#45983547) Homepage Journal

      No, but his money and property has.

      Civil Forfeiture law is insane.

      • by Mitreya (579078)

        No, but his money and property has. Civil Forfeiture law is insane.

        So.... They are going to return his bitcoins if he is found innocent in a court of law, right??

        • by wvmarle (1070040) on Friday January 17, 2014 @04:09AM (#45983791)

          Not likely.

          The US prosecution already decided that The Silk Road is an illegal venture, and on those grounds they have seized the property linked to it. This is exactly the same grounds on which they can seize say a boat load full cocaine, plus the stack of cash that's on the same vessel.

          A totally different issue is to find and prosecute the individuals responsible for running the venture (e.g. those operating the boat or responsible for the cocaine on board). These people may in turn also have property linked to the illegal venture, which then may be seized as well (I don't know what US law says about that).

          Now if the person is found not guilty, he can prove the seized bitcoin (and possibly other property) are his, and that the operation was in fact not illegal or that the seized property was not linked to that operation, then he may be able to get back his property.

    • by Raumkraut (518382)

      Indeed. I see a lot of assertions that Ulbricht was "The Dread Pirate Roberts", and in this article that he was the "founder". Has Ulbricht actually been found - in a court of law - to be either, or confessed to being so? Not so far as I've heard. There's a lot of accusations flying from government agencies, which are then repeated verbatim by "news" agencies who are more interested in a dramatic story than accuracy or facts.

      However, the phrase "... shall dispose of the bitcoins ... according to law" is pre

      • by 1s44c (552956)

        As I understand it the law says they can take the cash, or in this case bitcoins, and unless someone can prove that the cash was in no way involved in any crime the police get to keep it and spend it. This law has been horribly misused many times in the past.

        In this case it's highly likely this is drug money but even so they don't need to wait until that's proven in court.

        • Re: (Score:3, Funny)

          by michelcolman (1208008)

          the police get to keep it and spend it.

          Too bad for them the Silk Road doesn't exist anymore...

      • by Rich0 (548339) on Friday January 17, 2014 @06:17AM (#45984293) Homepage

        Has Ulbricht actually been found - in a court of law - to be either, or confessed to being so? Not so far as I've heard.

        This is an asset forfeiture case. He isn't being tried or punished. His assets are being tried in a court of law, and the constitution doesn't give any human rights to assets, so they aren't entitled to such novelties as "trial by jury" or "innocent until proven guilty" or the "right to confront witnesses." Don't worry though, every time a stack of money was asked to speak up if they had any concerns with the proceedings it went along in silent acquiescence.

        In drug cases the first thing the US Government typically does is seize any assets they can find and use forfeiture to confiscate them with only an administrative procedure. The owner of the assets has no standing in the court to speak or prevent this - he is technically not under trial.

        Of course, when the accused is finally under trial he'll have a much harder time of it now that he has no assets with which to pay a lawyer. Oh, and if he is found to be innocent it doesn't change the fact that his assets were already found to be guilty. Apparently you can try to sue to get your money back, but you need to prove the innocence of the assets in question.

        And yes, if this sounds absolutely insane, that merely demonstrates that you aren't.

        • by Kjella (173770) on Friday January 17, 2014 @09:24AM (#45985491) Homepage

          His assets are being tried in a court of law, and the constitution doesn't give any human rights to assets

          The Bill of Rights was supposed to, this part:

          The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures

          Unfortunately all it takes is an unreasonable court to come up with an unreasonable definition of "unreasonable" and you've done an end-run around the Constitution. It's like defining slaves as property and not people, hence none of the rights guaranteed to the people are being violated. Sadly you need a bunch of lawyers to write a lawyer-proof definition and the Bill of Rights is very far from that.

      • DPR has already admitted the bitcoins are his right here [slashdot.org]
  • I thought bitcoins weren't legal tender.
    • by ledow (319597) on Friday January 17, 2014 @03:22AM (#45983587) Homepage

      They aren't.

      They are seized goods.

      Same way they'd sell your car if that's what you had illicitly gained and they'd seized it - and they'd sell it for US$.

      This is just conversion of a seized good to monetary value (and probably at way below current rates, if "police auctions" etc. are any measure of how they'll go about it).

      • According to TFA:

        "It is the intention of the government to ultimately convert the bitcoins to U.S. currency," said Jim Margolin, a spokesman for the U.S. Attorney's office for the Southern District of New York.

        Once converted, the bitcoins, like monetary proceeds of other crimes, will go into the government's general fund, he said. There, they will be used for general-purpose spending.

        So it appears that they're simply going to 'convert' the bitcoins to US dollars. As far as I understand how auctions work, this isn't it at all. No one ever 'converts' a seized car into dollars, they sell it to someone that had already owned US dollars. Here, it appears to me (and maybe I'm wrong) that they're going to print US dollars in the name of bitcoins. So bitcoins disappear, and US dollars appear. So the US government is essentially buying bitcoins.

        • by ledow (319597)

          You can try to push the "bitcoin doesn't exist" angle as much as you like. You're just arguing over semantics, and in an nonsensical way.

          How is the sale of a car not a conversion into dollars? Why is there nobody who "already owned US dollars" who wouldn't want to buy the car/bitcoins for them?

          Where do you get the idea that they are "printing" anything? If they had 10m Euros and they "converted them" to US$, what makes you think that's not a "sale"? What makes you think that involves printing more US do

    • by angel'o'sphere (80593) on Friday January 17, 2014 @03:51AM (#45983731) Homepage Journal

      You might be surprised, but here in germany US dollars are no legel tender either.

    • by raymorris (2726007) on Friday January 17, 2014 @07:27AM (#45984615)

      The government sells their surplus office chairs.
      Office chairs aren't tender.

      The government sells radio channels.
      Radio channels aren't tender.

      The government sells bitcoins.
      Bitcoins aren't tender.

      Legal tender is whatever type of payment you are REQUIRED to accept.
      If you eat at a restaurant and when the bill comes you try to pay with a check, they can say "we don't accept checks." If you refused to pay with anything other than a check, they could call the police or sue you for the $12. They can also say "we don't accept credit cards.". They HAVE to accept cash. If they refused your cash and then tried to sue you, the judge would laugh and tell them to read the $20 bill. It says right on the bill "this note is legal tender for all debts, both public and private.". That means you can't refuse cash and then claim that someone didn't pay. THAT is legal tender.

      Office chairs are not a tender because you can't force the restaurant to accept office chairs as payment. The fact that the government sells office chairs has nothing to do with it. They are still chairs, not money. The government can sell toys. Bitcoins are still toys, not money.

      • by Registered Coward v2 (447531) on Friday January 17, 2014 @09:14AM (#45985391)

        The government sells their surplus office chairs. Office chairs aren't tender.

        The government sells radio channels. Radio channels aren't tender.

        The government sells bitcoins. Bitcoins aren't tender.

        Legal tender is whatever type of payment you are REQUIRED to accept. If you eat at a restaurant and when the bill comes you try to pay with a check, they can say "we don't accept checks." If you refused to pay with anything other than a check, they could call the police or sue you for the $12. They can also say "we don't accept credit cards.". They HAVE to accept cash. If they refused your cash and then tried to sue you, the judge would laugh and tell them to read the $20 bill. It says right on the bill "this note is legal tender for all debts, both public and private.". That means you can't refuse cash and then claim that someone didn't pay. THAT is legal tender.

        Actually, they are not required to accept cash in payment either. They could say "We only accept Visa cards." I would guess if they didn't put a restriction on accepting cash so that you knew prior to paying then a judge might say they have to accept it since the presumption would be they accept cash since sit is legal tender and most places do; but that is different than saying the are required to accept it.

        Cite from treasury.gov:

        Legal Tender Status

        I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?

        The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

        This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy

        • by ceoyoyo (59147)

          In the situation mentioned by the OP - you've eaten at a restaurant - the money you owe the restaurant is a debt. By not making you pay in advance they've given you credit. My reading of that statement is that they must accept any legal tender you choose to offer to pay off that debt. So if you want to give them a $20 they can take it or dissolve the debt.

          On the other hand, if they didn't want to take the $20 and you offered it in advance, they could refuse to serve you.

  • Marked as forfeited? (Score:4, Interesting)

    by Anonymous Coward on Friday January 17, 2014 @03:23AM (#45983591)

    Wasn't those bitcoins marked as forfeited on the various block watching sites?

    If nobody want those bitcoins, they might be very hard to sell while other bitcoins can be sold without a problem.

    • by magic maverick (2615475) on Friday January 17, 2014 @03:43AM (#45983687) Homepage Journal

      That would be an interesting point. However, there is no method currently in BitCoin to prevent seized bitcoins from being "spent" (transfered to another address). Nor, as far as I know, is there any wallet that would highlight that a particular bitcoin is "bad". So, if the gov. does it sensibly, they could easily sell off these bitcoins for cash. Hell, they could even just hold an auction rather than going through an exchange. They probably will do that. And they'll find someone willing to pay at least $10 a bitcoin (which is like 1% of the current value) because once they bitcoins have changed hands, they are easy to launder (or "mix") if not to just spend.

      • by Dr_Barnowl (709838) on Friday January 17, 2014 @05:07AM (#45984005)

        You're running into one of the properties of BitCoin here - it's not anonymous, it's pseudonymous. You can't hide the transaction history of a given coin, because that's how BitCoin works - it's a single vast verifiable public transaction log. If someone doesn't want to accept coins that passed through a particular wallet, then it's easy to verify this. And if there are enough people who won't touch Silk Road coins, then their value will be dubious to the people who ordinarily would.

        It's impossible to "launder" BitCoin for this reason - you can always trace the entire transaction history for a given coin or subdivisions thereof.

        That said, I think it's unlikely that people will turn them down.

        • by thegarbz (1787294)

          And if there are enough people who won't touch Silk Road coins

          I wonder what the risk here is that would cause someone not to want to touch such a coin? A BTC is a BTC just like any other. It's like cash. You're likely holding money in your wallet right now that was used in a drug deal at some point. Does that make that money any less valuable to you?

          Who cares what the history of the coin is providing that it is not double spent, which is the purpose of the log to begin with.

    • by ceoyoyo (59147)

      Every time something happens bitcoin looks shakier. Your "anonymous" currency that can't have transactions reversed can be rendered worthless by being put on a blacklist by somebody? What, some random group of miners somewhere?

  • So does this action somehow legitimize bitcoins?
    Sure, you can't pay your mortgage with them at this point, but doesn't this mean that the US Federal Gov't now recognize that it has some legitimate value?
  • and deprived the Fed of tax revenue because they did it in a currency that the Fed don't control, the Fed get pissy and fucking STEAL IT!?

    Something is VERY FUCKING WRONG with this picture!

    • by ihtoit (3393327)

      OK. since these bitcoins can be uniquely identified, how about the BTC community REFUSING them? That'll piss in the Fed's cornflakes.

      • by Firethorn (177587)

        That's a bit like tracking money via serial number. Sure, you can track each one individually, but if you don't have a list of the serial numbers for the bills the robbers just stole, they're still untrackable.

        • by ihtoit (3393327)

          but an identifiable mark, like oh ridiculously low exchange pricing, or a fluorescent exploding dye pack... notwithstanding the fact that EVERY single Bitcoin has a FULLY TRACEABLE history.

    • and deprived the Fed of tax revenue because they did it in a currency that the Fed don't control, the Fed get pissy and fucking STEAL IT!?

      *sigh* I'll keep repeating this until it gets through people's thick skulls.

      Sol long as you can calculate a dollar equivalent and pay your taxes in dollars the Feds don't care if you keep your books in BTC, Pesos, or jars of hamster poop. They even have IRS publications that explain how the system works to keep you from running afoul of the laws. It's s

    • It's not because they don't control the currency. They seize USD all the time.

  • That is all.
  • Well, at least by selling them and not outright destroying them or sitting on them forever, the feds have endorsed that they are at least legal to possess.

    Ironically this may actually legitimize them.

  • The gov't ought to sell them at a premium price - "Get your honest-to-goodness commemorative "Silk Road Evildoer Bitcoin (tm)" right here! Only $MARKET_PRICE * 10 !!!

  • by Simulant (528590) on Friday January 17, 2014 @07:17AM (#45984563) Journal
    'It is the intention of the government to ultimately convert the bitcoins to U.S. currency,'

    Good luck with that. I've been waiting 3 months now for my U.S. currency.

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