Feds seized $311M in Bitcoin, then hacker stole it back

&gt; The prosecutors accuse Harmon of a very unusual crime: remotely swiping Bitcoin...<p>As opposed to what, &quot;locally&quot; swiping Bitcoin?<p>&gt; ... Bitcoin stored on a computer device the government had already seized in another case<p>Yeah that&#x27;s your problem Mr. Prosecutor, you have no idea where bitcoins are &quot;stored&quot; or what the device you have seized is. Which leads me to think you are not qualified to &quot;seize&quot; this type of assets.<p>It&#x27;s 2022, Bitcoin has been working practically non-stop since 2009, and governments and the medias have been claiming that only criminals&#x2F;terrorists use Bitcoin for almost as long... you would think people in his position would know what private keys are and how to secure Bitcoin funds they pretend to &quot;seize&quot;.<p>It&#x27;s simple, like all crypto newbies this prosecutor has just learned: Not your keys, not your coins.<p>This apllies if you have keys and you are not certain you are the only one to have them... anyone else with these keys can&#x2F;will most likely claim them before you.

80% of the way through the article you can read what actually happened. It&#x27;s not that the Feds were incompetent and kept a &quot;seized wallet&quot; thinking only they had the private keys or something like that.<p>The wallets were simply protected by a passphrase and Larry couldn&#x27;t be compelled to give the passphrase. The feds even told the judge they didn&#x27;t have control of the funds and they could be moved to family&#x2F;friends before it happened.

This was bound to happen eventually. People have been noting for awhile how often law enforcement just leaves the &quot;seized&quot; coins in the original wallet somehow thinking that no criminal would ever make a backup copy of their private keys.

&gt; Agents built a detailed financial picture of Larry. Inspecting his cloud accounts, they found a Google Glass photo of a computer screen showing the Helix administrator page<p>Wow, a picture taken with google glass is one of the things that got him

&gt; remotely swiping Bitcoin<p>In other words, he used his own private key to send a transaction. How is that &quot;hacking&quot;?

<a href="https:&#x2F;&#x2F;archive.ph&#x2F;mBEXx" rel="nofollow">https:&#x2F;&#x2F;archive.ph&#x2F;mBEXx</a>

&gt; Agents built a detailed financial picture of Larry. Inspecting his cloud accounts...<p>Scariest part of the article.

&gt; To US prosecutors, it’s evidence that he suddenly came into a lot of money.<p>it&#x27;s a tub full of singles :_D<p><a href="https:&#x2F;&#x2F;assets.bwbx.io&#x2F;images&#x2F;users&#x2F;iqjWHBFdfxIU&#x2F;izKncFTLeKfY&#x2F;v1&#x2F;-1x-1.jpg" rel="nofollow">https:&#x2F;&#x2F;assets.bwbx.io&#x2F;images&#x2F;users&#x2F;iqjWHBFdfxIU&#x2F;izKncFTLeKf...</a><p>i&#x27;ve seen strippers leave the stage with more

No, Blooomberg. The &quot;hacker&quot; never &quot;stole&quot; the money back. The feds never seized it in the first place. All they seized was an encrypted wallet.<p>Putting it in terms you might better understand: What the feds seized is equivalent to a foreign, chip-only banking card. They never seized the money behind it or the pin required to move that money.

This reminds me of that time that a governor claimed a journalist hacked the state via right-click =&gt; view source.

If you find yourself in the similar situation, use RenVM to get your bitcoin over to an EVM (Ethereum Virtual Machine, many networks use EVMs now), then you have many more options.<p>You can still use Tornado cash. You can still withdraw from Tornado cash to new addresses. You can use those funds in those new addresses to buy and pump the price of the the smallcap tokens you already owned with your salary money. Decentralized exchanges that utilize liquidity pools remove the need for matching orders, liquidity pools are mixers on their own. It doesn&#x27;t matter who you sell your pumped tokens to, you are just depositing them in the liquidity pool and getting the <i>more</i> liquid token back - USDC, Ether, etc.<p>A couple 8,000% gains later and you&#x27;re just another crypto trader that got in early and believed.

I&#x27;m sorry, this sounds like they essentially grabbed the post-it note with someone&#x27;s bank account login from their screen, and then been surprised that the person logged in and then Zelle&#x27;d their money to a different bank account?<p>(obviously replace bank+passcode with wallet seed or whatnot)<p>Because it really seems like the obvious thing would be to immediately move the bitcoin or whatever from the original elsewhere on the assumption that they&#x27;d be recouping the transaction cost?

&gt; He used most as collateral for a $1.2 million loan. Some of that went to buy <i>a luxury condo in Cleveland</i>, prosecutors said.<p>ahahah Gary coming through with the oxymorons

ITT: A bunch of cryptonerds arguing semantics about legal terminology they don&#x27;t understand.

Imagine getting done in by your own Google Glass.

It&#x27;s not immediately clear to me that this is illegal. If anything, the Feds didn&#x27;t &quot;seize&quot; the Bitcoin, they forcibly acquired a license to the wallet&#x27;s private key. If they didn&#x27;t understand that the license was non-exclusive, well, that&#x27;s not the fault of the other licensees.

So did they seize it or not? What a farce.

The only way to seize them is to immediately transfer them to another account.

wallet address, wallet address, waller address, it’s the damn wallet address.

Lol, Larry and Gary. Man, some parents. Maybe there’s a Barry too

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Was there a court order preventing him from accessing the Bitcoin? If not then I don&#x27;t know what to tell you.

Can you even say &quot;stealing back&quot; when the Feds just had some copy of a private key while there always have been (many) others?<p>I mean, would you call it stealing back if the Feds seize a real key to a vault, know there may be others out there and then leave the fault completely accessible only to act surprised when the vault is empty after some time?<p>Ownership of blockchain assets is defined by who has access to the private keys. It seems a bit ignorant to forget about this, much less write a piece ignoring this.