[HN Gopher] US Attorney Announces $3.36B Cryptocurrency Seizure ...
___________________________________________________________________
US Attorney Announces $3.36B Cryptocurrency Seizure in Connection
with Silk Road
Author : jmsflknr
Score : 280 points
Date : 2022-11-07 14:44 UTC (8 hours ago)
(HTM) web link (www.justice.gov)
(TXT) w3m dump (www.justice.gov)
| photochemsyn wrote:
| > " IRS-CI Special Agents are the best in the world at following
| the money through cyberspace or wherever our financial
| investigations lead us. We will continue to work with our
| partners at the US Attorney's Office to track down these
| criminals and bring them to justice."
|
| They might want to look into this:
|
| _Many U.S. corporations use offshore tax havens and other
| accounting gimmicks to avoid paying as much as $90 billion a year
| in federal income taxes. A large loophole at the heart of U.S.
| tax law enables corporations to avoid paying taxes on foreign
| profits until they are brought home. Known as "deferral," it
| provides a huge incentive to keep profits offshore as long as
| possible. Many corporations choose never to bring the profits
| home and never pay U.S. taxes on them._
|
| https://americansfortaxfairness.org/tax-fairness-briefing-bo...
|
| Yes, these tax loopholes are legal, but I bet the IRS and its
| world-class money trackers could, if they wanted, find quite a
| few outfits going well beyond what's technically legal.
| Scoundreller wrote:
| They said they were the best in the world, not that they were
| any good.
| [deleted]
| zmaurelius wrote:
| They could, but then the IRS would have contend with an army of
| lawyers to claw their money back. In this case, going after a
| small time criminal with no connections is an easy win, so it
| makes sense from a resource allocation perspective for them
| focus on cases like this instead.
| vkou wrote:
| Anyone who stole and _has held on_ to 51,000 BTC is not
| exactly a small-time criminal any more.
|
| They were when the theft occurred, but this is like when you
| steal a cargo container full of crap, and five years later
| discover that both the Mona Lisa and a nuclear football is in
| it.
| mschuster91 wrote:
| > They could, but then the IRS would have contend with an
| army of lawyers to claw their money back.
|
| Always reminds me on how Scientology managed to get
| charitable. tl;dr: Cause so much work for the IRS (or appear
| to be able to do so) and they'll back down.
|
| The tax code is like the MasterLock of laws: looks complex on
| the outside, keeps honest people honest but is so weak it can
| be exploited by anyone willing to do so.
| closewith wrote:
| At the spot price at this time, 51,680.32473733 Bitcoin is worth
| $1,066,821,439.46 (~$1.06B) USD. Some difference from the ~$3.36B
| on November 9th, 2021.
| greyface- wrote:
| And in September 2012, the time of the heist, they were worth
| about $500k.
| ta988 wrote:
| Most news and law enforcement will always inflate the numbers
| like that.
| ISL wrote:
| That was the value at the time of seizure, which is most-
| likely the correct time at which to value it.
|
| It is true that the news would probably use the larger number
| if BTC had gone up in price since then, but I suspect that
| the official statement would always quote the value at the
| time of seizure (perhaps with a parenthetical to highlight a
| greater present-day value).
| conductr wrote:
| > That was the value at the time of seizure, which is most-
| likely the correct time at which to value it.
|
| It should be marked to value at time of the crime. Value of
| the property is often a metric used for setting the
| charges/punishment and he had no idea it would appreciate
| the way it did. He shouldn't get penalized for it
| appreciating.
|
| May differ internationally but to my knowledge it works
| that way over most of the US.
| dragonwriter wrote:
| > It should be marked to value at time of the crime.
| Value of the property is often a metric used for setting
| the charges/punishment
|
| In the context of _charges /punishment_, when thr charges
| apply to specific direct proceeds, that would seem
| correct.
|
| In the context of reporting a seizure, the value at the
| time of the seizure is relevant.
|
| Those are two different things, even though they might
| relate to the same property at different points in time.
| PaulWaldman wrote:
| >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?
| [deleted]
| ISL wrote:
| 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.
| duxup wrote:
| Agreed, the risks here are pretty high. Even just some
| catastrophic disk failure.
| zmaurelius wrote:
| 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.
| Scoundreller wrote:
| Who said he didn't have any other backups elsewhere?
|
| Impossible to prove he didn't have his private keys backed
| up elsewhere.
| ilyt wrote:
| 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
| int_19h wrote:
| "There's always money in the banana stand!"
| bottlepalm wrote:
| The money would have probably would of been safer stored as 12
| words on an unhidden disused iPhone.
| drewfis wrote:
| 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.
| thakoppno wrote:
| People have memorized pi out to absurdity - surely one
| could memorize 192 bits with enough incentive?
| hamiltonians wrote:
| and no encryption apparently too
| rufusroflpunch wrote:
| 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.
| cesarb wrote:
| 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).
| Scoundreller wrote:
| 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.)
| 323 wrote:
| And one day you hit your head and can't remember the words
| anymore.
| gardenhedge wrote:
| maybe buy twelve items that represent the words and have
| them around the house
| kipchak wrote:
| For comparison at $14k an ounce you would need 72,000 oz of
| rhodium, the most valuable PM, in order to hit a $1B.
| kibwen wrote:
| 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.
| Scoundreller wrote:
| I mean, the magnetic field to hold it doesn't weigh
| anything either.
| thfuran wrote:
| That's more of a manufacturing cost than a market price,
| isn't it?
| m4jor wrote:
| Sounds like it was just stored on a Trezor or Ledger hardware
| wallet.
| closewith wrote:
| > 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.
| busyant wrote:
| > bearer bonds
|
| The financial instrument of choice for movie heist villains
| from the 1970s to early 2000s.
| krustyburger wrote:
| They're still relevant in that there's always a chance
| someone may ask you to "do a Die Hard."
| closewith wrote:
| And the Italian Mafia until at least 2009!
|
| https://en.wikipedia.org/wiki/Chiasso_financial_smuggling_c
| a...
|
| > The total value of the counterfeit bonds was estimated at
| approximately one percent of total U.S. GDP in 2008
| busyant wrote:
| 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!
| dmix wrote:
| 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.
| mminer237 wrote:
| New bearer bonds were outlawed forty years ago is why.
| Scoundreller wrote:
| 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.
| closewith wrote:
| 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.
| notch656a wrote:
| 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.
| danaris wrote:
| 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.
| skizm wrote:
| When cryptocurrency assets are seized, do they transfer
| everything all to a separate wallet, which is then held in
| custody? If there are copies of the "seized" assets, they can
| just be moved to a new wallet and then the only thing seized was
| some hard drives, right?
| 323 wrote:
| Yes, they move them immediately.
|
| This was detailed in previous seize operations like this.
|
| 2013:
|
| > _The FBI official pointed me towards this Bitcoin address,
| which received transfers of close to 144,000 in just the last
| 24 hours. "They finished moving them at 3am this morning," said
| the official._
|
| https://www.forbes.com/sites/andygreenberg/2013/10/25/fbi-sa...
| Scoundreller wrote:
| That's what they should do.
|
| The quadrigacx (Canadian crypto exchange) bankruptcy trustee
| didn't move the little they found into a wallet they
| controlled.
|
| Lucky for them, it seems like nobody else had/acted on having
| the private keys.
| kylestlb wrote:
| The linked affidavit has more of the interesting details. Looks
| like the agent worked with the guy's ISP and a well-known crypto
| exchange to do some old fashioned IP tracing.
| frontman1988 wrote:
| The guy didn't even use VPN? That's pretty amusing for a
| billionare thief.
| kylestlb wrote:
| Had a static ip address for a few years, lol
| Scoundreller wrote:
| Claimed to have lots of VPNs too.
|
| Lotta crypto brokers look down on VPNs for obvious reasons.
|
| But they seemed to have gotten their wallets mixed up and
| that gave away their identity on of one of the early 10k
| Bitcoin wallets.
| kepler1 wrote:
| I'm curious, what kind of endgame was he planning, if any?
|
| How do you launder and benefit from even any of the coins, if you
| know you're a wanted man and everyone is watching to see where
| the coin pops up?
| olalonde wrote:
| > 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
|
| Weird that he went through all this trouble to physically hide
| the wallets but did not use encryption...
| ur-whale wrote:
| My thoughts exactly.
| sidewndr46 wrote:
| Almost like the details released don't match up with reality.
| m4jor wrote:
| Seems like it was stored on a hardware wallet like a ledger or
| trezor.
|
| He most likely voluntarily gave them the passwords and access
| as he turned himself in as well as turned over additional
| bitcoin.
| kube-system wrote:
| The article does not say he didn't.
| ISL wrote:
| With a public blockchain, it seems at least technically possible
| to seize any funds that were _used_ in a transaction later shown
| to be illegal.
|
| If you thought KYC constraints were invasive today...
| jonwachob91 wrote:
| That is probably the fastest way to kill crypto. Seizing any
| coins involved in illegal activity, even if it's been through
| numerous other owners since (and for legal purchases). Once
| everyone is asking if the coins they are getting are clean
| they'll stop acquiring coins.
| three_seagrass wrote:
| Isn't that just admitting that the primary use case of crypto
| is illegal activity?
| ISL wrote:
| No -- it means that a single instance of illegal activity
| can potentially be charged-back by a government through a
| web of otherwise-legal transactions at any time. The
| immutable historical retention of all transactions has at
| least the _capacity_ to threaten the immutability of
| transactions in the real world.
| landemva wrote:
| Government cleans crime proceeds when they auction it off.
| Same for planes and cars.
| counttheforks wrote:
| Which government, and are there international agreements
| about this?
| dopamean wrote:
| I'd assume whichever government seized the goods.
| landemva wrote:
| USA federal government sold seized bitcoin years ago.
| https://www.reuters.com/article/us-usa-bitcoin/venture-
| capit...
|
| And local and State government.
| https://www.nyc.gov/site/nypd/services/vehicles-
| property/pol...
|
| USA is sovereign and does not respect international
| agreements.
| MerelyMortal wrote:
| Ireland sold seized Monero (XMR) and Bitcoin (BTC) in an
| online auction in 2019. I think they even opened it up to
| foreigners.
| ISL wrote:
| Yes, but that is after they seize it.
|
| If a criminal steals my bitcoin and spends it, everyone who
| accepts it and everyone who accepts it from them is taking
| delivery of stolen property, trivially traceable back to
| me. I'll want it back, because it is mine and was stolen.
|
| https://en.wikipedia.org/wiki/Possession_of_stolen_goods
|
| As a practical matter, if crypto continues to gain
| adoption, law must emerge to keep the ecosystem from
| getting jammed up.
| Sargos wrote:
| China, Russia, Egypt, and many others have already banned
| crypto and seize any assets regardless of legality and it
| hasn't killed crypto yet.
|
| Even the USA as the largest economic market in the world
| couldn't kill crypto by seizing assets as there are dozens of
| other countries that will keep using crypto for the anti-
| corruption, stability, and efficiency benefits it provides.
| It's a lot like the internet where a country can ban or
| control it but ultimately it only harms their own citizens
| and prevents them from properly competing on the world stage.
| SevenNation wrote:
| > This seizure was then the largest cryptocurrency seizure in the
| history of the U.S. Department of Justice and today remains the
| Department's second largest financial seizure ever.
|
| If past history is any guide, the proceeds will be auctioned,
| making DOJ the largest government-sponsored bitcoin dealer in the
| world.
| lolc wrote:
| Interestingly, this will increase the supply of Bitcoin.
| Because more will be in circulation, having been cleared by the
| U.S. government. Who wouldn't want those squeaky clean coins!
| hamiltonians wrote:
| how did they link it to his home address. did he try to cash them
| out using real ID?
| rideontime wrote:
| The answer can be found here: https://www.justice.gov/usao-
| sdny/pr/us-attorney-announces-h...
| keepquestioning wrote:
| This guy is fucked, how long will he be in jail?
| Scoundreller wrote:
| > ZHONG, 32, of Gainesville, Georgia, and Athens, Georgia, pled
| guilty to one count of wire fraud, which carries a maximum
| sentence of 20 years in prison.
|
| > The maximum potential sentence in this case is prescribed by
| Congress and is provided here for informational purposes only,
| as any sentencing of the defendant will be determined by the
| judge. ZHONG is scheduled to be sentenced by Judge Gardephe on
| February 22, 2023, at 3:00 p.m.
|
| To be determined!
| keepquestioning wrote:
| Why is there no jury of peers? I do not understand legal
| system in America.
| notch656a wrote:
| Prosecutors in US conspire to deprive defendants of their
| rights by creating a 'plea bargain' system where federal
| defendants almost always plead guilty in exchange for not
| being 'taxed' with often multiples of the bargained number
| of years in jail for daring to exercise their right to
| trial, where they will be crushed by an asymmetric system
| of the massiveness of the US government verse whatever
| meager amount they have to spend on an attorney and expert
| witnesses.
| bgentry wrote:
| There's no jury if you plead guilty. He didn't have to be
| convicted because he admitted to the crime as part of a
| plea bargain.
| latchkey wrote:
| 11.1160005300044 is a very odd looking number, I wonder if it is
| encoded as something.
|
| 11, 116, 53, 44
| mrb wrote:
| Indeed, it's not possible to seize "11.1160005300044" bitcoins
| as all bitcoin amounts (outside of the lightning network) are
| represented with a maximum of 8 decimals. Most likely, it's
| just a floating-point imprecision from the fed's calculations.
| For example a lot of software will calculate "20.1 - 20.0 =
| 0.10000000000000142"
| nrmitchi wrote:
| I may get slammed for this, but I don't understand the resources
| that apparently went into tracking down some kid who stole from
| an illegal marketplace a decade again.
|
| This feels way less like "pursing justice" and more like trying
| to track down everything the just I've department can seize and
| auction off. If Bitcoin hadn't _drastically_ increased in value
| since the original event, would this have ever been tracked down?
|
| I cant even count the number of much more consumer-impacting
| crypto-related frauds, crimes, and hacks from the last 3 years
| that would be more deserving of justice department attention,
| rather than focusing resources and attention on a double
| withdrawal bug from an illegal marketplace from a decade ago.
| pessimizer wrote:
| > I may get slammed for this, but I don't understand the
| resources that apparently went into tracking down some kid who
| stole from an illegal marketplace a decade again.
|
| If you're not going to track down $3.36B after a decade, you
| really shouldn't pursue thefts of less than $1M ever.
| [deleted]
| Scoundreller wrote:
| I doubt they've been actively investigating him for 10y.
| Probably went through the transaction logs right at the
| beginning and flagged the addresses.
|
| Big withdraws suggests seller. Big deposits and withdraws
| without sales suggests launderer. Small deposits, or sales and
| big withdraws suggests insider.
|
| Dude finally slipped up and got identified.
| garyfirestorm wrote:
| Low hanging fruit. We recovered X.y billion in BTC (valued at
| that time) hand waving, patting each others back. Instant
| promotion.
| paulpauper wrote:
| They were not just any bitcoin, they were missing silk road
| bitcoin. The fed had been looking for these 50k btc for awhile.
| adam_arthur wrote:
| I agree, we should let crypto scams of all kinds proliferate
| and flourish.
|
| Just kidding, haha. I agree that many more recent events have
| been more impactful, and hopefully they're pursuing those too.
|
| I mean the sheer numbers of ICOs with somewhat notable people
| involved purely to make a quick buck would be a good place to
| start
| conductr wrote:
| Since there continues to be "crypto-related frauds, crimes, and
| hacks" then they need skilled group of crypto investigators.
| Think of this case as practice.
| xyzzy4747 wrote:
| It's probably because he accumulated billions of dollars of
| property that weren't taxed, and illegally on top of that
| (although they were worth much less at the time).
|
| It kind of sucks for him that he had to forfeit the Bitcoin and
| not just the dollar amount he stole at the time. I am sure if
| it was the other way around, and Bitcoin went to $0, they would
| take the historical dollar amount he stole instead.
| nrmitchi wrote:
| I could completely see an argument for tax evasion, that is a
| crime where the technical victim is the government (and thus,
| citizenry), not where the victim is an illegal operation that
| no longer exists.
|
| However, he isn't being charged with a tax crime. He's being
| charged with "wire fraud" for double withdrawing from Silk
| Road.
| jamespo wrote:
| So committing a crime against criminals is OK?
| nrmitchi wrote:
| I can see you just trying to bait me into a non-
| productive debate, so I will say this.
|
| I am not going to make any statement regarding whether or
| not financial crimes against known and convicted criminal
| enterprises should be deprioritized in relation to crimes
| against regular citizens.
|
| In this case though, the "victim" has not existed for
| over 9 years and will never exist in the future, there
| are no ongoing victism, and there are no downstream
| victims to return restitution to.
|
| I do not believe the justice department should be
| pursuing cases (cold or not) where the only goal is
| siezing (not recovering) assets for their own benefit.
| jeremyjh wrote:
| Capital gains are not taxable until they are realized through
| sale of the assets. I would not expect he had any tax
| liability yet.
| xyzzy4747 wrote:
| Stealing an asset and keeping it is considered "income" in
| that tax year, I believe. You would only be correct if he
| stole Bitcoin when it was worth 0, but it wasn't.
| jeremyjh wrote:
| That's true, he'd owe taxes on the $500k it was worth at
| the time.
| nathanvanfleet wrote:
| You're right it sounds like he's a real nice guy and sitting on
| 3.36 billion dollars for a decade sounds like time served to
| me. I just can't get behind the concept of "Why did they arrest
| me for X when there is something wrong happening over there?"
| It just doesn't work that way, there are plenty of things
| happening ant the same time and you're just making some weird
| assumption that the IRS bitcoin task force could have been some
| completely different department chasing a completely different
| crime.
| keepquestioning wrote:
| This is Hacker News, different morality applies here
| michaelt wrote:
| _> I don't understand the resources that apparently went into
| tracking down some kid who stole from an illegal marketplace a
| decade again._
|
| 1. I suspect that the justice system feels that, as a matter of
| principle, they ought to keep the heat on darknet markets
| generally. That getting darknet market related arrests in the
| news has deterrent value, and shows they're doing their job.
| Obviously, arresting operators or big sellers would be even
| better - but any darknet market arrests are better than none at
| all.
|
| 2. They recovered $3.3 Billion, so the ROI on agents' time is
| probably pretty good. American society loves it when police
| departments are funded with criminals' money, through
| aggressive traffic ticketing and civil forfeiture! So this is
| really no different to fining a driver for doing 55 in a 54,
| except with much less police time used. From a certain
| perspective, this is one of the most productive uses of
| resources the department could possibly make.
| nrmitchi wrote:
| 1. I agree, it's a bit tangential to call this a "darknet
| market arrest" instead, since the "darknet market" was the
| "victim".
|
| 2. People largely hate when cops find someone for doing 55 in
| a 54, so it's probably not a great example, but I think
| supports my point. This isn't about solving an actual crime,
| but about optimizing for how much money the justice
| department is able to collect. I said elsewhere that this
| would be more reasonable as a tax investigation, but it's
| not, and it's (in my opinion) a pretty bad precedent that
| investigations should be prioritized by "how much cash can we
| seize"
| swalsh wrote:
| If we ever go back into a mercantilist economy based on
| bitcoin, the US is setting itself up to be in a solid position.
| mensetmanusman wrote:
| The US could crash BTC by trying to sell all of this now.
| latchkey wrote:
| No. There isn't enough liquidity in the market to even sell
| that amount. They also do these things over the counter, in
| auctions, which wouldn't have an effect on market pricing at
| all.
| three_seagrass wrote:
| The lack of liquidity is what would push the price down,
| since demand is higher at lower prices.
| latchkey wrote:
| Yes, that is generally how markets work. However there is
| no central exchange for bitcoin, nor is there enough
| liquidity in any single exchange. So, the seller would need
| to open accounts in multiple exchanges and sell in all of
| them. Sure, bringing down one exchange could have
| consequences for price, but it wouldn't cover this large of
| an amount of BTC. Plus, half the exchanges with enough
| liquidity to even begin with, aren't even allowed to be
| used in the US.
|
| Again, that's not how the US govt works with these things
| anyway (OTC auctions), so it is all a moot point.
| rideontime wrote:
| Ok, so someone buys the bitcoin at auction for pennies on
| the dollar, turns around and undercuts every other seller
| out there.
| latchkey wrote:
| It is an auction, it won't be pennies on the dollar.
|
| The last person who got that good of a deal was Tim
| Draper in 2014, which was a brilliant play and even then,
| I doubt he's sold it all.
|
| https://www.cnbc.com/2021/12/19/what-the-us-government-
| does-...
| mensetmanusman wrote:
| " There isn't enough liquidity in the market to even sell
| that amount. "
|
| That's exactly my point ;)
|
| If they overwhelm liquidity, the price can collapse because
| they can always underbid those trying to sell.
| latchkey wrote:
| Except, that isn't what happens, so it makes your statement
| incorrect.
|
| The US could also overwhelm [insert any free market] by
| simply executing eminent domain and/or printing enough
| money.
| lern_too_spel wrote:
| OK, fine. The person who buys these Bitcoins at auction could
| cause BTC to crash on all the exchanges.
| latchkey wrote:
| Why would someone spend a bunch of money to buy bitcoin and
| then crash the price?
|
| Is that like the ultimate tax loss write-off? ;-)
| lern_too_spel wrote:
| Who says they have to spend a bunch of money? The amount
| of money anybody would pay for it is the amount they
| could get from selling it, which is limited by liquidity.
| Add the fun they would get from crashing the market, and
| that is fair market value that these Bitcoins can get at
| auction.
| kristianp wrote:
| They could buy futures at a lower price before crashing
| the markets.
| Maursault wrote:
| > JAMES ZHONG pled guilty to committing wire fraud in September
| 2012 ... ZHONG pled guilty on Friday, November 4, 2022, ...
|
| > U.S. Attorney Damian Williams said: "James Zhong committed wire
| fraud over a decade ago...."
|
| _The statute of limitations for mail fraud and wire fraud
| prosecutions is five years (18 U.S.C. SS 3282), except for mail
| and wire fraud schemes that affect a financial institution, in
| which case the statute is ten years (18 U.S.C. SS 3293)_.[1]
|
| Lawyers please explain. Also, who was the victim here, and who
| reported the crime?
|
| [1] https://www.justice.gov/archives/jm/criminal-resource-
| manual...
| ajonnav wrote:
| I just started law school so don't take this answer as
| definitive but a couple of things I thought of were: 1. For the
| statute of limitations, I believe that the time point to look
| at is when the lawsuit was filed (as opposed to when the guilty
| plea comes through). All that matters was that lawsuit was
| filed __before__ the statute of limitations ran out. 2.
| Additionally, there are scenarios where the law/courts will
| allow people to file suits after the statute of limitations
| runs out but that varies by jurisdiction and by the law that
| governs the crime committed. (For more info, you can check out
| equitable/statutory tolling).
| yakak wrote:
| I don't think bitcoin was even a recognized currency until
| 2014.. It is utter madness that someone can make a game today
| and you can be tried for winning on players technical errors a
| decade after the IRS decides if it is a serious speculative
| game. It's like back in the first MOOGs where people wanted to
| arrest in game thieves. Talk about killing your industry.
| qeternity wrote:
| Bitcoin has been classified as a commodity, not a currency,
| so I'm not sure what you're talking about.
|
| I'm not sure why you're downplaying this. If I maliciously
| exploited a video game for serious financial gain today,
| there's a good chance that will be a crime.
| lolc wrote:
| If you trick somebody into giving you something, and they
| consider that thing valuable, you're on the hook for fraud.
| Doesn't have to be about official coins. Of course, if you're
| playing a game where thieves are part of the game, you have
| to accept that. Or not play the game.
| wmf wrote:
| In 2013 FinCEN and the IRS declared that Bitcoin _was always_
| property so you can 't make some kind of "it's just a game"
| argument.
| chelical wrote:
| In 2013. He pled guilty to wire fraud in 2012. Can
| FinCEN/IRS retroactively determine something (like tradable
| skins in a game) is property and prosecute people over it?
| wmf wrote:
| That's why I emphasized always. The laws and precedents
| saying that anything that quacks like property is taxable
| property are decades old so they predate Bitcoin. In 2013
| the government just said "Remember these laws from
| decades ago? No? They apply to you."
| adventured wrote:
| > In 2013. He pled guilty to wire fraud in 2012.
|
| He pled guilty on Nov 4 2022, the wire fraud occurred in
| 2012.
| jwithington wrote:
| TIL that you can get in trouble for stealing from other criminals
| ceejayoz wrote:
| Why would that be surprising? You can't murder them, either.
| notch656a wrote:
| In some (even US) jurisdictions they call it 'mutual combat'
| [0] and overlook it. In some places like Washington State
| (not: not legal advice) one may be under the impression
| criminal-on-criminal combat is explicitly legal. There's also
| a lot of historical context (think outlaws in wild west) that
| suggests that those in the American West may culturally not
| find it surprisingly that the public would generally be OK
| with criminals doing themselves in.
|
| It's my understanding that in Texas it may even be possible
| that killing thieves is legal there in some circumstances as
| well.
|
| Edit: perhaps I wasn't as explicit in the part to read
| between the lines. The police in US are oft perceived as
| being more likely to 'overlook' or consider it 'mutual
| combat' for acts against criminals. I don't think the
| analysis "that has nothing to do with them being criminal" is
| really a fair conclusion.
|
| [0] https://torontosun.com/news/world/no-charges-in-deadly-
| chica...
| ceejayoz wrote:
| That has nothing to do with them being criminals, though.
| You and I could engage in mutual combat, if we wanted.
| Muhammad Ali got paid quite a bit to do it.
| duxup wrote:
| You also should report that income to the IRS.
| toyg wrote:
| In a honest state, with great powers, come great regulations
| about what you are supposed to do with such powers.
| Occasionally some responsibility too.
| adrr wrote:
| Couldn't this guy say "silkroad knew I was doing this and
| approved". Prosecutors would have to get someone from the
| silkroad to testify to counter that.
| heavenlyblue wrote:
| Using/owning proceeds of a crime is a crime.
| londons_explore wrote:
| But don't the prosecutors have to prove you knew they were
| proceeds of crime?
| adventured wrote:
| With this context that's the easy part. His behavior - in
| numerous ways - revealed he knew what he was doing and
| knew what Silk Road was.
| adrr wrote:
| Did Silk Road offer anything legitimate? I assume fake
| followers for social networks isn't illegal in the US.
| Scoundreller wrote:
| That's probably what flagged them in the first place: Lots of
| withdrawals without any deposits or sales, so appeared to be
| a site operator.
| rideontime wrote:
| This logic didn't work for Armin Meiwes, it probably wouldn't
| work for this guy either.
| TheSoftwareGuy wrote:
| Interestingly, in this case Silk Road is the Victim, not the
| accused.
| IceHegel wrote:
| Crypto without privacy (by default) is dead.
| MerelyMortal wrote:
| I think you're getting ahead of yourself. It's not dead, _yet_.
|
| It's very much still alive (which is probably why you're being
| downvoted), because it has first-mover advantage and is easier
| to use. I think eventually privacy-by-default coins like Monero
| (XMR) will gain in popularity assuming people smarten up, so if
| it requires people being smart, then it may never gain in
| popularity, who knows.
| evilos wrote:
| This guy had 3 billion dollars in stolen crypto and didn't flee
| the country? Insane.
| cecilpl2 wrote:
| No, he had $500k in stolen crypto. This was 2012.
| [deleted]
| frontman1988 wrote:
| Not only that, he didn't even use much of it for the past 10
| years. Atleast he didn't have to work after college though :
| https://www.linkedin.com/in/jimmy-zhong-01678025
| m4jor wrote:
| >Large early bitcoin investor with extensive knowledge of its
| inner workings.
|
| An interesting way to put it.
| jimcavel888 wrote:
| miohtama wrote:
| The originally hack was caused by the fact that Silk Road was
| running PHP on MySQL without transaction isolation. Many early
| crypto exchanges had similar withdrawal bugs as they were running
| on LAMP stacks - MySQL has been notoriosly famous for having lax
| transaction isolation. Sometimes you could overwithdraw just by
| hitting refresh fast enough in a web browser.
|
| If you deal with money use PostgreSQL + SERIALIZABLE transaction
| isolation level to be sure.
|
| More in PostgreSQL documentation
| https://www.postgresql.org/docs/current/transaction-iso.html
|
| Also Zhong was 22 years old script kiddie when he hacked Silk
| Road. Any smart criminal would have left United States long time
| ago if you sit on the top of $3B stash.
| xyzzy4747 wrote:
| As someone who very briefly poked around Silk Road at the time
| (just created an account), and as someone who has used PHP with
| the LAMP stack occasionally over the years, I am completely
| unsurprised. Race conditions can be pretty tricky to prevent in
| PHP, since the state is contained within different threads that
| can't trivially communicate with each other. You need to be
| proficient with global state mutation such as via Redis or SQL.
| pmontra wrote:
| Well, the database is there to manage and defend the data if
| only properly instructed to do so (CHECK constraints,
| locking, serialization.)
| xyzzy4747 wrote:
| True, but it's still not trivial, unless you've thought of
| the race condition problems in advance. My guess is that
| instead of keeping all the withdrawal logic in a
| comprehensive DB transaction with good constraint checking,
| the code was broken up into multiple sequential PHP
| statements with transactions of simpler SQL (which is
| likely easier from a coding perspective) and with
| insufficient locking. This is the easier way to code it if
| you haven't thought of or heard about race condition
| issues.
| pmontra wrote:
| Yes, I'm sure that's what happened. The money withdrawal
| scenario is the classic example for locking in any
| database programming classroom but not everybody went
| through that or remembers it.
| ilyt wrote:
| Even if you're not 100% sure in your DB code you can do
| defense in depth approach and have the code that does the
| money operations do some checking too.
|
| Even executing queued operations with few seconds delay
| allow you to notice say a series of withdrawals putting
| account in negative
| Scoundreller wrote:
| Yeah, and it's Bitcoin withdrawals, nobody expects it to
| be anywhere near instant. I doubt the market place set
| its transaction fees very high either.
|
| But then you have to create a queue that only runs 1
| transaction per second. I guess another imperfect but
| simpler way is to create a batch file of transactions,
| execute hourly, but randomize or sort the sequence in a
| way to make sure related transactions aren't executed
| together.
| amalcon wrote:
| At the same time, this is like... data integrity 101. For
| future reference if you want to build a system that
| manipulates valuable information (such as monetary accounts),
| and you've never done anything like that before:
|
| Please pick a database (relational or otherwise) with ACID
| transactions and replication, buy at least two different
| textbooks on that specific database, read both, do any
| exercises they suggest, and then decide whether you still
| want to build that system. If yes, then cool: don't hold me
| responsible if anything goes wrong, but you need to learn
| somehow.
|
| Yes, it's possible to build systems like that on non-ACID-
| compliant databases, or without using the ACID functionality.
| It's _much_ harder, though, and you really must understand
| what you 're giving up in order to have a reasonable chance
| of success.
| xyzzy4747 wrote:
| Probably the code had logic such as the following, which
| from an amateur perspective, _seems_ to work. After all,
| the first check prevents the withdrawal if the account
| balance is too low, so what could go wrong?
| $balance = sql_query("SELECT balance FROM accounts WHERE
| account_id = " . $account_id); if ($withdrawal_amount
| < $balance) { withdraw_funds($account_id,
| $withdrawal_amount); }
|
| The correct solution of course requires putting the checks
| in an ACID transaction along with the account balance
| updating. This requires more work upfront (SQL is harder to
| write than PHP) and an impatient amateur coder probably
| didn't think of it. Also I'm guessing they didn't properly
| index all the DB columns and this made transactions take
| longer which exacerbates race conditions.
| Scoundreller wrote:
| And failed to even depend on bitcoin's double-spend
| protections. He deposited and was able to withdraw those
| deposits within seconds: before any block was confirmed on the
| blockchain.
| hamiltonians wrote:
| they would have arrested him overseas too
| TheRealDunkirk wrote:
| Yeah, look no further than the example of Kim Dotcom.
| swalsh wrote:
| A lot of the early Bitcoin stuff was toys which became
| something more than toys faster than the people running it
| could transform the toy infrastructure at it's core. In most
| cases, they didn't have the experience necessary to make it
| something better. Mt Gox was just a reused domain and was
| origionally an exchange for Magic the Gathering!
| deweller wrote:
| Note that modern MySQL has SERIALIZABLE transaction isolation
| as well:
|
| https://dev.mysql.com/doc/refman/8.0/en/innodb-transaction-i...
| https://mariadb.com/kb/en/mariadb-transactions-and-isolation...
| herpderperator wrote:
| ...how modern are we talking? SERIALIZABLE existed over a
| decade ago. It's mentioned here in a 2009 post.[0]
|
| [0] https://ronaldbradford.com/blog/understanding-mysql-
| innodb-t...
| spiorf wrote:
| Can confirm. Did a double withdrawal (of about 10$ at the time)
| on an exchange years ago by blocking a POST request and firing
| two at the same time.
|
| I alerted the exchange operator and he let me keep the 10$.
| Beaver117 wrote:
| It wasnt worth anywhere near billions when he stole it. It
| wouldn't have been worth that much until very recently
| Scoundreller wrote:
| > ZHONG did not list any item or service for sale on Silk Road,
| nor did he buy any item or service on Silk Road
|
| > ZHONG funded the Fraud Accounts with an initial deposit of
| between 200 and 2,000 Bitcoin. After the initial deposit, ZHONG
| then quickly executed a series of withdrawals. Through his scheme
| to defraud, ZHONG was able to withdraw many times more Bitcoin
| out of Silk Road than he had deposited in the first instance. As
| an example, on September 19, 2012, ZHONG deposited 500 Bitcoin
| into a Silk Road wallet. Less than five seconds after making the
| initial deposit, ZHONG executed five withdrawals of 500 Bitcoin
| in rapid succession -- i.e., within the same second -- resulting
| in a net gain of 2,000 Bitcoin. As another example, a different
| Fraud Account made a single deposit and over 50 Bitcoin
| withdrawals before the account ceased its activity.
|
| So Silk Road wasn't waiting for _any_ transaction
| confirmations??? And didn't append a nonce to each withdrawal to
| avoid duplicates?
|
| Is this the guy that Ross wanted to kill?
| LocalH wrote:
| "the code is the contract"
|
| "oh wait we fucked something up? shit no, give me my money
| back"
| bagels wrote:
| Isn't that the silly thing they say about etherium, not
| Bitcoin?
| [deleted]
| IncRnd wrote:
| > As another example, a different Fraud Account made a single
| deposit and over 50 Bitcoin withdrawals before the account
| ceased its activity.
|
| > So Silk Road wasn't waiting for any transaction
| confirmations??? And didn't append a nonce to each withdrawal
| to avoid duplicates?
|
| See the ACID properties of databases. [1] These are often put
| to the wayside in order to have greater transaction speed. We
| can see the results. In computer science, ACID
| (atomicity, consistency, isolation, durability) is a set
| of properties of database transactions intended to guarantee
| data validity despite errors, power failures, and other
| mishaps.[1] In the context of databases, a sequence of
| database operations that satisfies the ACID properties
| (which can be perceived as a single logical operation on the
| data) is called a transaction. For example, a transfer of
| funds from one bank account to another, even involving
| multiple changes such as debiting one account and crediting
| another, is a single transaction.
|
| [1] https://en.wikipedia.org/wiki/ACID
| YetAnotherNick wrote:
| Which of the ACID property is broken here? Transaction is by
| definition atomic, internal consistency was not broken, and
| isolation and durability are fine.
|
| ACID makes sense in internal transfer, like the example you
| gave:
|
| > debiting one account and crediting another, is a single
| transaction.
|
| Blockchain is ACID compliant, their internal database could
| be ACID compliant hard part is linking it together.
|
| The solution here is exactly going opposite of ACID. Do a
| transaction in database first, and hope the transaction goes
| through Bitcoin, if not have another job reverse the
| transaction. If the reverse job fails, have a support agent
| manually revert the transaction. A common mistake someone
| could do is to put transaction in processing state in the
| database, and have another job update it to success.
| IncRnd wrote:
| > Blockchain is ACID compliant, their internal database
| could be ACID compliant hard part is linking it together.
|
| That's the issue, ACID is not ACID for a tiny bit but for
| the transaction. See the definition you quoted, "debiting
| one account and crediting another, is a single
| transaction." Blockchain is absolutely not ACID compliant.
| There must be a deterministic methodology not miner
| consensus for ACID. Miners can even change the blockchain.
|
| However, why are you even mentioning blockchain instead of
| MYSQL without SERIALIZABLE, which enforces atomicity?
|
| > The solution here is exactly going opposite of ACID.
|
| What solution are you talking about? There was no solution
| put in place, which was the cause of the thefts.
| MuffinFlavored wrote:
| > See the ACID properties of databases. [1]
|
| But since this is "blockchain", is it more like... they
| weren't polling for the right confirmation/status/update from
| the blockchain network API thingie?
| wmf wrote:
| No, it's not blockchain. It's a SQL usage error.
| IncRnd wrote:
| > But since this is "blockchain", is it more like... they
| weren't polling for the right confirmation/status/update
| from the blockchain network API thingie?
|
| That's the exact same mistake I referenced. The consuming
| website should not be in charge of the atomicity of
| transactions.
|
| It doesn't matter whether the API was used incorrectly,
| blockchain was used, or finanglesperunk was the technology.
| The vagaries of the implementation don't matter. Sending
| money should be atomic with the request instead of whatever
| this was, otherwise the result might be $3.36 Billion in
| theft.
|
| PS Blockchain is a database. The developer can choose to
| enforce SALT instead of ACID, but something wasn't done
| right.
| joyfylbanana wrote:
| No, the bug was in the withdrawal code. Concurrency bug,
| numerous simultaneous withdrawals have a high change of
| succeeding and you are able to withdraw more than your actual
| balance. Very common in amateur coded websites.
| Scoundreller wrote:
| Sure, but if silk road waited for X confirmations, it would
| have made it at least a bit more complex to pull off.
|
| (Maybe you could have just hammered it continuously, but
| hopefully would have to predict when the blocks would be
| confirmed. They're not exactly every 10 minutes).
|
| It's not exactly related to this hack, but poor blockchain
| practice on the part of silk road if it permitted withdraws
| this quick after deposits.
| theptip wrote:
| If the bug is a read-modify-write sequence without a
| transaction, then regardless of whether you wait for more
| confirmations, the withdrawal action will always be racy
| and vulnerable to this exploit.
|
| Not waiting for confirmations would leave you vulnerable to
| random chain forks and make 51% attacks cheaper.
| ufo wrote:
| From what they said it sounds like the issue was executing
| the same withdrawal request more than once, unrelated to
| the bitcoin confirmation window. The fraudulent withdrawals
| had to happen on the same second, not merely on the same
| hour.
| Scoundreller wrote:
| That's correct. I read the indictment and the first one
| was done within 5 seconds of deposit, while the next
| successful one was after 24 minutes.
| [deleted]
| nmjohn wrote:
| > Very common in amateur coded websites.
|
| Also common in professionally coded websites.
| Scoundreller wrote:
| << Do not click PAY more than once >>
| [deleted]
| wombatpm wrote:
| In 2012 bitcoin was worth ~ $7.00. So 2,000 bitcoin is only
| $14,000 but the feds too $3 billion back. Does not seem fair.
| matthewaveryusa wrote:
| I knew a guy about 10 years ago that upgraded his iphone
| through the apple website and AT&T website at the same time,
| received two phones, and never heard from either company about
| a double transaction. I love these kinds of hacks -- I guess
| it's one way to profit from hard-learned database lessons :)
| nerdawson wrote:
| When I was a kid we had vending machines for drinks in
| school.
|
| One morning I put 20p in and it immediately came back out. It
| wasn't accepting the coin so I tried two in quick succession.
| Both were spat back out... but the machine registered one of
| them.
|
| I of course would never exploit that repeatedly for a couple
| free drinks and some extra change too.
| hamburglar wrote:
| The soda machine in my dorm at college had separate
| mechanisms for "I released a soda" and "you actually got a
| soda" and if you knew this, you could trigger the "I
| released a soda" mechanism and delay the "you actually got
| a soda" event until after you got your money back. You just
| had to stick your arm up the machine and not let the
| released soda fall while you hit the cancel button. Then
| you got your money back and then a soda. Atomicity fail.
| wildzzz wrote:
| They were not around for very long but there was a soda
| machine that had a conveyor belt that drinks would drop
| down onto and then be pushed out of a flap door into the
| bucket. The machine could detect when a drink was
| actually vended but didn't seem to be able to detect when
| someone was holding the door shut. You'd pay for a drink
| and hold the door shut while the machine tried to push
| your drink out the door. Since the door wasn't opening,
| the machine would think that no drink ever dropped down
| onto the conveyor belt so it would mark that specific
| drink number as out of stock and return your money.
| Except your drink selection was still sitting on the
| belt. You'd pick a new drink and pay for it but this time
| not holding the door shut, two drinks would come out for
| the price of one. You could do this quite a few times
| over to either get a couple free drinks or just jam the
| machine. Out of all the vending machine "hacks" I learned
| about in middle school, this was the only thing that ever
| worked and only for a short time before they got quickly
| replaced.
|
| The new machines use either a basket to hold the drink
| instead of a conveyor belt or some sort of shield to
| prevent you from messing with the flap door until it
| knows a drink has been vended.
| philjohn wrote:
| The tumble dryers in my halls of residence were meant to
| take 20p (oh, those were the days, it's probably a quid
| now), but if you put in a 1p slowly and kept turning the
| handle it would trick it.
| peteradio wrote:
| Reminds of my older brothers friend who in second grade got
| back in line to get his yearbook picture taken and showed up
| twice in the yearbook with slightly different pics.
| busyant wrote:
| I have to fess up, too.
|
| Back in the early 1990s, I withdrew $10 from an ATM.
|
| But the machine gave me two $10s (they were stuck to each
| other).
|
| I then went back for a second transaction (secretly hoping
| there were multiple "stuck $10s" waiting to be released).
|
| The machine only dispensed a single $10 the second time, so I
| stopped.
|
| Let it be known that I owe Chemical Bank (or whoever bought
| them) $10 + interest.
| reaperducer wrote:
| Back before all of the banks were wired together, I had a
| friend with what we called a "bottomless ATM card."
|
| He could withdraw whatever amount he wanted from the ATMs
| at college, but since that region's ATM network wasn't
| hooked up to his home bank's ATM network, it took months
| for everything to reconcile.
|
| He could keep withdrawing, even if he had taken out far
| more cash than he had in his home bank account.
|
| On breaks, he would go back home and pick up enough hours
| at his part-time job to cover the difference (it wasn't
| unusual for people to be paid weekly or in cash back then),
| make a deposit, and everything was fine. He just had to
| keep one step ahead of the computer batch processes.
|
| Also, I think Chemical is Citibank now. I had a Chemical
| account, and a Dime account. I still think of Citi as
| "Chemical," though.
| onemoresoop wrote:
| First time Im hearing of an ATM dispensing $10 bills.
| Granted, first time I started using ATMs was in the early
| 2000s...
| reaperducer wrote:
| _First time Im hearing of an ATM dispensing $10 bills._
|
| Back when ATMs were new, you could get any amount,
| including change.
|
| The ATMs at the Chase bank next door currently dispense
| any bills you want, but not change. After you tell it how
| much you want, it asks you how you would like it and you
| can tap different denominations.
|
| Last month I took out $17, just to see it work.
| busyant wrote:
| I think they even dispensed $5s at the time, but my
| memory is a bit hazy about that.
|
| At the time, my girlfriend (now wife) used to tell me I
| wasted so much $$ on ATM fees by only withdrawing $10 at
| a shot.
|
| I told her I was not good at budgeting my money and I had
| a tendency to spend whatever was in my pocket,
| irrespective of the amount.
|
| So, $10 was my way of putting brakes on my spending. Fees
| were just part of the cost of my budgeting method.
|
| She married me anyway.
| malsanton wrote:
| Opposite experience here! Requested $100, got back $60 with
| two of them folded over on the corners. $100 debited from
| bank account, filed a complaint with the bank. The
| temporary refunded the money, did an investigation, then
| said that the ATM actually settled at the correct number,
| and took the money back from me. Not cool
| Miserlou57 wrote:
| I didn't get into the UC of my choice. So I appealed. This
| was in 2006, and the appeal process was not through an online
| application. You had to mail in a packet with your appeal
| letter, transcripts, etc. I sent one in by the postmark
| deadline (Friday), but it wasn't very good. So, come Monday
| morning, I overnighted a much better one. After a week or
| whatever, I got a message notifying me that my application
| status had changed, but I did not get in. Then a day or two
| later, I got another one, to which I _did_ get in.
|
| Now, I don't know for sure, but I like to think two different
| reviewers got my packets in parallel and never knew it, and
| upon changing my status the second reviewer probably wouldn't
| have seen any evidence of the last status change having been
| from an appeal.
| busyant wrote:
| > I got a message notifying me that my application status
| had changed, but I did not get in. Then a day or two later,
| I got another one, to which I _did_ get in.
|
| Back in the days before email was common, I applied for a
| postdoc position at <famous prof's lab @ MIT>.
|
| I mailed my letter to <famous prof>, expressing interest in
| working in his lab.
|
| A few days later, I asked 3 profs in my graduate program to
| write letters of recommendation on my behalf to be mailed
| to <famous prof>.
|
| After ~10 days, I received a response letter from <famous
| prof>, to the effect of: "Sorry, my lab is full. Won't have
| any openings for several years. etc. etc. Thanks, but no
| thanks."
|
| I figured "Oh well.... No big deal."
|
| But I was too lazy to inform the profs who were writing my
| recommendations to stop.
|
| About a week after my "rejection" letter, <famous prof>
| phones me and says, "I always send a standard rejection
| letter because I'm only interested in people who are
| _aggressive_. Thanks for sending your recommendation
| letters. I _definitely_ have openings in my lab."
|
| I didn't have the heart to tell him that he only got those
| letters because of my laziness.
| nonethewiser wrote:
| Couldnt it be the case that one packet was reviewed and
| they updated your status, then they just chucked the
| duplicate?
| Miserlou57 wrote:
| Yes I suppose. I just vaguely remember two different
| notifications about it
| asdfjhaweklfh wrote:
| > Is this the guy that Ross wanted to kill?
|
| No. The guy he "wanted to kill" was a moderator who didn't even
| steal from him. A FBI agent (huray, my taxes) pretended to be a
| drug lord for over 2yrs convincing Ross he should kill some
| moderator with lies about he wanting to take over silkroad or
| something, and then staged a mock assassination. All that for
| no tangible investigative benefit other then strengthen their
| 2yr old bro-bond.
|
| That agent didn't even contribute to the actual arrest. Go read
| wired write up of the whole thing. It's better than most
| fiction books. Pure comedy.
|
| Also, the current silk road is a honeypot set up by the Feds.
| That's why 1) they screwed up on validating transactions (it's
| not their money) and 2) they want after the stolen funds.
| swarnie wrote:
| Has the concept of "Entrapment" not made its way across the
| pond yet? This seem highly unethical on the part of the FBI.
| 2devnull wrote:
| FBI is federal, unlike the police, so they can do whatever,
| at least that's how it's playing out. The FBI is supposed
| to be effective, not ethical. It's what's "on the tin" and
| has always been. A good example is their treatment of MLK.
| matai_kolila wrote:
| The FBI is supposed to be ethical, that's what's on the
| USA tin containing the FBI tin.
|
| You can provide a billion examples of how the US hasn't
| lived up to that notion, but 'liberty and justice for
| all' is, "what's on the tin."
| 2devnull wrote:
| I think we agree, probably that what is and what should
| be are not the same. The tension is that voters will
| often reward politicians that are effective, rather than
| those whom are ethical. When it comes to the safety of
| your child, most humans go for effective over ethical.
| birdyrooster wrote:
| > When it comes to the safety of your child, most humans
| go for effective over ethical.
|
| Wouldn't the balance of the child's needs change the
| ethical judgement (now considered ethical as well as
| effective)? I don't see how they would be mutually
| exclusive.
| matai_kolila wrote:
| We disagree insofar as your statement, "The FBI is
| supposed to be effective, not ethical." They are supposed
| to be ethical, and then effective.
| glasshug wrote:
| Entrapment is an invention of 20th century American courts.
| See William E. Mikell, "The Doctrine of Entrapment in the
| Federal Courts," U. Pa. L. Rev. 90 (1942), calling
| entrapment as a defense a "purely American doctrine" not
| considered by earlier English writers on criminal law.
|
| Trivia aside, no. Entrapment is a specific concept narrower
| than "a fed lied to me."
| quietbritishjim wrote:
| Given the mention of "across the pond", it seems the
| parent commenter was talking about the English law
| meaning of entrapment. That is where you are enticed to
| commit a crime by a law agency. Technically it's still a
| crime and there's no legal defence based on entrapment,
| but courts will tend not to prosecute if "the police did
| more than present the defendant with an unexceptional
| opportunity to commit a crime".
| tptacek wrote:
| I'm assuming you pulled that from Wikipedia, which is
| what Google points to for that phrase. You've radically
| oversimplified Wikipedia's coverage of UK entrapment, and
| Wikipedia oversimplifies UK law. "More than an
| unexceptional opportunity to commit a crime" is just one
| factor in a complex analysis. The "exceptional"
| opportunity _starts_ the consideration of entrapment; it
| doesn 't end it.
| quietbritishjim wrote:
| Yes I got that quote via Wikipedia. So what? It, in turn,
| is a direct quote from a judgement from the Law Lords,
| which set a precedent - the main precedent on the subject
| if that Wikipedia article is to be believed.
|
| Yes, no kidding it's a more complicated subject than that
| one short sentence I write about it. But my point was
| just that it's different from any notion of entrapment,
| or lack of, in the US.
| tptacek wrote:
| The point is that it's simply not the case that the state
| tends not to prosecute in cases where "the police did
| more than present the defendant with an unexceptional
| opportunity to commit a crime".
| cragfar wrote:
| FBI gets a wide berth from the courts. A couple of years
| ago, they seized some TOR child porn website, and then
| started making upgrades to it causing the userbase to
| increase by 30%. Then they tried to pin that user count on
| the person they arrested.
| alphabetting wrote:
| > Also, the current silk road is a honeypot set up by the
| Feds. That's why 1) they screwed up on validating
| transactions (it's not their money) and 2) they want after
| the stolen funds.
|
| The DOJ release says these transactions were from 2012
| Ecio78 wrote:
| this bitcoin theft happened in September 2012, before Ross
| Ulbricht got arrested (in 2013) so when Silk Road was active
| and not a Feds' honeypot like you describe.
| neetfreek wrote:
| Part I of an account of the wild story can be found here;
| it's really quite interesting, at the least!
|
| https://web.archive.org/web/20220112152207/https://www.wired.
| ..
| SubjectToChange wrote:
| > No. The guy he "wanted to kill" was a moderator who didn't
| even steal from him.
|
| Ross Ulbricht commissioned 5 murders fully expecting each of
| them to be carried out.
|
| > All that for no tangible investigative benefit other then
| strengthen their 2yr old bro-bond.
|
| The murder-for-hire evidence denied him bail. But the
| prosecutor already had Ulbricht nailed and decided to avoid
| complicating the case by formally filing the murder-for-hire
| charges. Would your tax dollars have been better used if Mr.
| Ulbricht had additional life sentences and decades of prison?
| No, he is going to die in a prison cell either way.
|
| Ross Ulbricht built his empire, in large part, by profiting
| off people's suffering. And he exhibited time and time again
| that he would murder people to protect it. He is nothing
| short of evil.
| pmarreck wrote:
| > built his empire, in large part, by profiting off
| people's suffering.
|
| LOL. Wow. You clearly have no sense for nuance whatsoever.
|
| https://www.wired.com/2014/06/silk-road-study/
|
| https://www.theatlantic.com/technology/archive/2013/10/did-
| s...
|
| Silk Road reduced deaths in a black market that was always
| there and would always continue to be there regardless of
| the presence of Silk Road. Period. Given that black markets
| are going to continue to exist, since anti-drug laws are
| dumb (just like Prohibition was; regulation of an
| irrepressible market is always superior to "illegalization"
| in a vain attempt to suppress it), _it is at least less bad
| if there are fewer killings_.
|
| Entrapment is unethical precisely because you can use it to
| enforce a law regardless of the ethical justification of
| the law. If it was a capital offense to have sex before
| marriage in 2040 in the United Christian Dictatorship of
| America, and another Ross Ulbricht type came along and made
| it possible for teens to seek and meet in secret online,
| and a christo-fascist cop pretended to be a hot girl on
| said system while pretending to threaten to take the whole
| thing down unless a ransom was paid, and ANOTHER christo-
| fascist cop (or the same one pretending to be someone else)
| offered a "solution" to this by "getting rid of" the
| "problem"... Do you see where I'm going with this? Future
| Ross Ulbricht just wanted people to be able to find
| physical love before committing to wed!! Certainly not
| guilty enough to do life in prison, because _no actual
| murders ever actually occurred._
| [deleted]
| tptacek wrote:
| A reminder that the murder-for-hire schemes were a
| predicate of the conspiracy charge in his indictment; he
| was in part charged for them.
| notch656a wrote:
| But conspiracy charge depends on overt act(s), so being
| convicted of conspiracy doesn't necessarily mean he was
| convicted on the basis that particular overt act
| occurred. The prosecution never had to prove all the
| overt acts, including murder-for-hire, were true to
| convict for the more generalized non-murder conspiracy.
| Just that some subset of overt acts were true.
| xapata wrote:
| > prove
|
| There are different levels of proof. For example, civil
| court only requires a preponderance of evidence.
| fossuser wrote:
| It might have been worth them formally filing the murder-
| for-hire charges just to save us from having to read his
| supporters repeatedly say they weren't real.
| notch656a wrote:
| Don't worry, even though he wasn't convicted of them, his
| sentencing included the alleged activity and punished him
| for it anyway!
| onemoresoop wrote:
| In my opinion the Sackler family has cause a lot more
| suffering and they see no day in prison. And they're not
| the only lords who get away with murder. Yet a guy like
| Ulbricht gets to spend a lifetime in jail... This is a
| miscarriage of justice unless all monsters are locked up
| and all would be fair. It could be argued that Ulbricht
| caused no suffering but alleviated it by providing a
| service for people to buy their "drugs" by skipping meeting
| a shady dealer...
| BLKNSLVR wrote:
| The arbitrary nature of what's become of "justice" is
| only magnified as the wealth gap increases.
| broknbottle wrote:
| The Sackler's had their name stripped from museum
| exhibits, campuses, etc, which I'm sure hurts at the end
| of the day.
|
| The US government really should have went the extra mile
| and stripped the Sackler family of every penny they had..
| to the point that they were forced to beg for spare
| change on the side of the road e.g. Mortimer & Randolph
| Duke style.
|
| > The bankruptcy judge acknowledged that the Sacklers had
| moved money to offshore accounts to protect it from
| claims, and he said he wished the settlement had been
| higher
|
| https://www.nytimes.com/2021/09/01/health/purdue-
| sacklers-op...
| tunesmith wrote:
| > In my opinion the Sackler family has cause a lot more
| suffering and they see no day in prison.
|
| So what? Which is it, are you in favor of a lighter
| sentence for Ulbricht, or a heavier sentence for the
| Sackler family?
| onemoresoop wrote:
| To be honest I don't know, I just expect justice to do
| it's bidding and make the world a better place for all of
| us. What bothers me is that the rich get away with murder
| while the rest of us are held at a different standard. It
| also seems to me that the Sacklers' caused a lot more
| harm while this guy is not as evil as purported to be and
| doesn't disserve to be locked up for life. Should the
| justice be harsh for everyone I'd swallow that pill but
| it's not. I'm just comparing the amount of suffering
| caused and the received sentence. And there's no what,
| it's just an ordinary person's opinion, an opinion that
| does not change anything.
| tunesmith wrote:
| I respect where you're coming from, but here's an
| opinion, that if adopted, _may_ influence where you
| choose to stop or continue your thought process.
|
| I see this "comparison" form of objection quite a bit,
| where someone points out relative injustice without
| taking a stand on which way to go. Once you notice it,
| you start seeing it everywhere.
|
| In terms of conversation, it almost always seems to have
| a muting effect, of freezing the momentum towards
| figuring out what should be done. Desiring consistency is
| honorable, but these sorts of scenarios further ask us
| which way we want to apply that consistency. While each
| individual case probably wouldn't make a difference, I
| think when we refuse to answer those questions as a
| society, it makes it more likely for these imbalances to
| occur. So I think it's worthwhile to try and think it
| through, take a stand, and voice a stand.
| usrusr wrote:
| That alleged right of criminals to be persecuted in
| strictly descending order of severity simply does not
| exist. Finding some bigger wrong does not make a right.
| BLKNSLVR wrote:
| > That alleged right of criminals to be persecuted in
| strictly descending order of severity simply does not
| exist.
|
| Exactly. Justice does not exist at that level of wealth,
| and this is a core problem in western society.
|
| Well pointed out.
| prottog wrote:
| > this is a core problem in western society
|
| Are there any societies, historical or current, where the
| extremely rich and powerful face justice in the way you
| would like, other than by pissing off other extremely
| rich and powerful people?
| lozenge wrote:
| In China they say you can get away with anything as long
| as nobody dies.
|
| For example, in the 2008 Chinese milk scandal, two people
| were sentenced to death and three received life
| sentences.
| BLKNSLVR wrote:
| I did wonder whether I should include 'western' or not. I
| probably shouldn't have, since, I agree with your point,
| it's not a area that distinguishes western from non-
| western.
| kcatskcolbdi wrote:
| > Ross Ulbricht built his empire, in large part, by
| profiting off people's suffering.
|
| He built Silk Road, which allowed people to sell drugs to
| one another.
|
| If the 'people's suffering' you are referencing is the use
| of drugs, I hope you have this same ire for the
| pharmaceutical companies and physicians prescribing opioids
| linked to over 500k deaths in the US over the past two
| decades[1]. I hope you feel the same ire for the CIA who
| facilitated and supported the Nicaraguan Contra groups'
| smuggling of crack into the US to finance their coup
| attempt[2].
|
| I would hope the "nothing short of evil" rhetoric isn't
| exclusively saved for the kid who built an onion site and
| then was entrapped by FBI agents into a murder-for-hire
| scheme of their creation.
|
| [1]https://www.npr.org/2022/11/02/1133523740/cvs-health-
| agrees-...
| [2]https://nsarchive2.gwu.edu/NSAEBB/NSAEBB113/north06.pdf
| IncRnd wrote:
| >> Ross Ulbricht built his empire, in large part, by
| profiting off people's suffering.
|
| > He built Silk Road, which allowed people to sell drugs
| to one another.
|
| Actually, that's the tiniest part. [1]
| The Silk Road was an online black market where buyers and
| sellers of illegal or unethical items could
| transact anonymously. Utilizing privacy techniques such
| as the Tor network and cryptocurrency transactions,
| people were able to transact in drugs, hacked
| passwords, illegal data, and other contraband.
|
| Or, you could look at _how he used_ Silk Road, to
| contract killers. [2] MANY OF THE
| ideological supporters of the Silk Road have described
| its sprawling online black market for drugs as an
| experiment in victimless crime and a nonviolent
| alternative to the bloody turf wars of the streets. But
| prosecutors in the trial of Ross Ulbricht, the 30-year-
| old accused of running that anonymous bazaar, have
| pointed to one conversation they say shows the
| contrary: That the Silk Road's boss was willing to resort
| to the drug trade's most violent measures when it
| suited his needs.
|
| [1] https://www.investopedia.com/terms/s/silk-road.asp
|
| [2] https://www.wired.com/2015/02/read-transcript-silk-
| roads-bos...
| zoklet-enjoyer wrote:
| Literally fake news. Don't believe everything you read,
| especially if the source is a prosecutor.
| ISL wrote:
| Pretty impressive that we've advanced technologically and as a
| society to the point where we can now store somewhere between
| much and all of the GDP of Belize " (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."
| lern_too_spel wrote:
| What's stored on the computer is a number that gives access to
| a wallet. You could also store a number that gives access to a
| Swiss bank account on a piece of paper in the 18th century. I
| wouldn't call the technology advanced.
| nso wrote:
| https://en.wikipedia.org/wiki/List_of_most_expensive_paintin...
| ).
| sigmar wrote:
| >various metals also seized from ZHONG's home.
|
| Anyone know what this refers to? Gold seized? or maybe metal
| plates with cold wallet keys taken from the safe?
| greyface- wrote:
| From the affidavit (https://www.justice.gov/usao-sdny/press-
| release/file/1549821...):
|
| > The metal items consisted of four one-ounce silver-colored
| bars, three one-ounce gold-colored bars, four 10-ounce silver-
| colored bars, and one gold-colored coin, all seized from
| Individual-1's home on November 9, 2021.
| londons_explore wrote:
| > silver-colored
|
| So they weren't actual silver... So they were probably just
| novelty display pieces?
|
| And even if they were real metals, the total dollar value of
| that lot isn't very high.
| jeremyjh wrote:
| My guess is they were precious metals, but the agent's
| report immediately after the seizure doesn't presume to
| know that; they just report what they can observe, and they
| may have them analyzed/valued later.
| Scoundreller wrote:
| Or they didn't bother sending it away for analysis, since
| it's such a tiny aspect of the case financially.
| gzer0 wrote:
| > _Nearly five years after ZHONG's fraud, in August 2017, solely
| by virtue of ZHONG's possession of the 50,000 Bitcoin that he
| unlawfully obtained from Silk Road, ZHONG received a matching
| amount of a related cryptocurrency -- 50,000 Bitcoin Cash ("BCH
| Crime Proceeds") -- on top of the 50,000 Bitcoin._
|
| And presumably, this is how he was caught. He hid his identity
| really well. The withdrawal of BCH eventually led to his
| downfall.
| paulpauper wrote:
| What are you basing this on? It could have been any other
| possibility
| Scoundreller wrote:
| It didn't, not officially anyway.
|
| The feds pinned him on what appears to a mixup by the accused
| between his "unclean" and "clean" wallet wallets when dealing
| with a crypto broker with an IP that pointed to his house for
| several years.
|
| Starts around 22 here: https://www.justice.gov/usao-sdny/press-
| release/file/1549821...
| dagaci wrote:
| The question is will the USA government refund what was stolen to
| the victim "Silk Road"?
| (https://www.investopedia.com/terms/s/silk-road.asp) Is there a
| protocol for this kind of event?
| [deleted]
___________________________________________________________________
(page generated 2022-11-07 23:01 UTC)