In Germany, a man has finished serving a two-year plus stint in prison for covertly installing software on other computers to harness their power to “mine” bitcoin.
He is out and his Bitcoin wallet has 1,700 in it from his mining operation. That stash is now worth around $60 million.
But the police believe he can not get access to it without them knowing. And, he will not tell them the password to unlock the coins.
“We asked him but he didn’t say,” prosecutor Sebastian Murer told Reuters.
So it sits there. Maybe forever.
But it is interesting that police are using the wallet angle to "seize" bitcoins. They are apparently monitoring the wallet.
-RW
If he remembers his private keys he will still have access. Although the police will be watching to see if the money moves.
ReplyDeleteI presume of course the government wants the funds for itself not to compensate the people from whom he stole computing time and electricity from.
ReplyDeleteThis is very interesting. In theory, the cops can't do anything to prevent him from transferring the Bitcoin, but I'd hate to be the sorry sap that buys some Bitcoin and happen to get coins from his wallet, because if I'm a law-abiding citizen they may be going straight to the German gov't. Because of this, I'd expect major exchanges that operate within the law, like Coinbase, to blacklist his wallet, making it very hard for him to liquidate them. He basically has to sell them to someone outside the law and since the chain of custody is public those coins are forever tainted. As RW has said, Bitcoin is not as outside gov't reach as many think.
ReplyDeleteHe might trade for a privacy coin, such as Monero, though, as noted, the receiver of his bitcoin would inherit their blacklisted status. Or he might use a bitcoin mixer, maybe dividing the amount into many wallets first and creating a difficult path to trace before he spends some. Is there a further penalty for use of his ill-gotten gain?
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