FBI can't gain access to Silk Road mastermind's Bitcoin stash

By on October 7, 2013, 11:45 AM

The alleged mastermind behind the Silk Road has asked a judge for more time to put together the best possible bail proposal during a recent court appearance. Magistrate Judge Joseph Spero was skeptical about what Ross Ulbricht’s public defender Brandon LeBlanc could put together in that short amount of time but granted the extension anyway.

Perhaps more pressing is the issue of Bitcoins and what the FBI plans to do with the ones they’ve found and the ones still deemed missing. The alphabet boys initially seized more than 26,000 Bitcoins and plan to store them until the judicial process is over. After that, they are a bit unsure. “We will probably just liquidate them,” according to an FBI spokesperson.

The Bitcoins they have seized thus far were just the ones held in Silk Road accounts, meaning it belongs to (or, used to belong to) Silk Road users. The FBI has been unable to get their hands on Ulbricht’s personal stash of Bitcoin – commission he is said to have earned for running the site.

The FBI spokesperson said this was about $80 million worth, which was held separately and is encrypted. If true, that’s around 600,000 Bitcoin which would make up about five percent of all Bitcoin currently in existence. That’s pretty impressive when you stop and think about it.

Unsurprisingly, the FBI spokesperson said there isn’t likely to be restitution in the case. If someone buys something illegal, they can’t get their money back, she said.




User Comments: 5

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spencer spencer said:

One of the features that makes bitcoin golden... unless you have logged in with your (hopefully extremely secure password) nobody can take a microbit, all you can do is give or receive. And all bitcoin transactions are encrypted So without that password I guess the account will remain full.

1 person liked this | Guest said:

I think that's a flaw on the bitcoin idea

just 21 million bitcoins will ever be produced, this means that any bitcoin lost due to forgotten password is inaccesible to anyone and impossible to be replaced

maybe over the years the number of lost bitcoins begins to become big mmm

well what do I know

Jim$ter said:

One of the features that makes bitcoin golden... unless you have logged in with your (hopefully extremely secure password) nobody can take a microbit, all you can do is give or receive. And all bitcoin transactions are encrypted So without that password I guess the account will remain full.

I think that's a flaw on the bitcoin idea

just 21 million bitcoins will ever be produced, this means that any bitcoin lost due to forgotten password is inaccesible to anyone and impossible to be replaced

maybe over the years the number of lost bitcoins begins to become big mmm

well what do I know

A think to remember to:

A bitcoin can be divided down to 8 decimal places. Therefore, 0.00000001 BTC is the smallest amount that can be handled in a transaction. If necessary, the protocol and related software can be modified to handle even smaller amounts.

So really if all but 1 bitcoin was lost it wouldn't matter

MilwaukeeMike said:

I think that's a flaw on the bitcoin idea

just 21 million bitcoins will ever be produced, this means that any bitcoin lost due to forgotten password is inaccesible to anyone and impossible to be replaced

maybe over the years the number of lost bitcoins begins to become big mmm

well what do I know

Just 21 million will ever be produced? That's a flaw too... or would be eventually if Bitcoin becomes popular. As something becomes more popular more of it has to be produced or the price to buy it becomes obscene. This is why the govt continually prints money. The other example is stocks. A stock will split to create twice as many at half the price so it's affordable to more people.

To see what will happen if you don't produce more, look at Berkshire Hathaway (BRK-A), a stock that's never been split. It's trading for almost $170,000 per share. Bitcoins won't be very useful if you have to trade .002 of one for every $100.

Ranger12 Ranger12 said:

21 million bitcoins comes out to nearly 2.85 billion dollars at its current price. For now I think that's plenty to cover the number of people who actually trust it enough to use it. I'm gonna say it will never be widely used. I think it's more of an exercise, a precursor for a more stable and viable virtual currency.

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