Silk Road Vendor Who Says He Never Sold Anything Illegal Wants His Bitcoins Back

from the this-could-get-interesting dept

Tue, Feb 4th 2014 2:17pm — Mike Masnick

A former Silk Road vendor by the name of Peter Ward is apparently preparing a lawsuit to demand the return of his Bitcoins, which are now owned by the US government after the seizure of Silk Road last year. According to Andy Greenberg at Forbes:

On Thursday, Ward began the process of retaining a lawyer to file a claim for what he says were 100 bitcoins–worth around $95,000 at current exchange rates–seized by the FBI in the takedown of the Silk Road online black market for drugs last October. Unlike most of Silk Road’s sellers, Ward says he earned his bitcoins through entirely legal means, offering the same merchandise that he advertises on the public Internet from his head shop Planet Pluto in Devon, England.

“I’m probably in a unique position in that I can prove my coins came from selling legal items,” says Ward, who argues his wares included only drug accessories and UK-legal substances like salvia and the morphine-like kratom. “I sold on Silk Road because it had a large user base that matched my target customers. Where better to sell king-size rolling papers?”

It turns out that soon after the Silk Road takedown, he too was arrested in the UK, having all of his electronics seized. It likely complicates matters that he also had some cocaine and marijuana at his home when he was arrested. However, he insists that nothing he sold online was illegal, and he has been released on bail and not charged with any crimes.

The legal issues here will get complicated fast, made much more complicated by the mess that is the US's seizure and forfeiture laws, a set of laws that are both exceptionally complicated and regularly prone to abuse by law enforcement -- effectively allowing them to steal whatever they want at will, and then sell off to help their agency/police department profit in the process.

That said, in the mess of those laws, there are some very specific things that law enforcement needs to do in order to keep the property they seize and forfeit, and law enforcement isn't always known for following those specific rules. I imagine that the DOJ's response will be to try to quickly dismiss any such case, noting that anything remotely touching Silk Road is somehow tainted and associated with a criminal act, but that may be harder to back up in court if it ever gets that far.

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Filed Under: bitcoins, forfeiture, peter ward, seizure, silk road, uk

34 Comments

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Anonymous Coward, 4 Feb 2014 @ 2:26pm

"However, he insists that nothing he sold online was illegal, and he has been released on bail and not charged with any crimes. "

so he was bailed but not charged ? how does that work?
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- Anonymous Coward, 4 Feb 2014 @ 2:37pm
  
  Re:
  You can get arrested and not charged, happens all the time
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  - Dr Duck, 4 Feb 2014 @ 3:42pm
    
    Re: Re:
    Yes, but if you are released without charge, no bail is involved. This report is confused, or just wrong.
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    - Anonymous Coward, 4 Feb 2014 @ 4:12pm
      
      Re: Re: Re:
      "eleased without charge, no bail is involved"
      
      No, if he's on bail but not charged it means he has agreed to appear later at a police station and may be charged later. Basically he's out until they make their minds up.
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    - G Thompson (profile), 4 Feb 2014 @ 10:40pm
      
      Re: Re: Re:
      Bail doesn't just mean money has been payed as a guarantee.
      
      You can also be on unconditional bail on recognisance
      
      which basically means its a non monetary bond of good behaviour where an individual undertakes to observe and/or meet some condition(s).
      
      Can be used if the court would most likely summon someone as a material witness and that witness has a reasonable risk of non attendance
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      - G Thompson (profile), 4 Feb 2014 @ 10:50pm
        
        Re: Re: Re: Re:
        hate enter key working weird)
        
        ... Or as in this case it is used for by the Police as an after arrest bail if no charge has been laid though an investigation is ongoing. The person has a duty to return to police station for questioning (they don't have to specifically answer questions just attend) if the police have further evidence JUSTIFYING an arrest.
        
        Here's the actual UK Act and part describing it for those interested/bored ;) http://www.legislation.gov.uk/ukpga/1984/60/section/47/enacted
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  - Anonymous Coward, 4 Feb 2014 @ 7:09pm
    
    Re: Re:
    But if you're arrested and not charged, you're just released. Bail implies a charge the State wants you to come back and face.
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    - Anonymous Coward, 5 Feb 2014 @ 3:42am
      
      Re: Re: Re:
      He could have been released on bail and then not charged.
      
      Please don't confuse US and UK law.
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      - G Thompson (profile), 5 Feb 2014 @ 8:28am
        
        Re: Re: Re: Re:
        You mean they are not the one and the same... but but... Eagles! ;)
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  - Anonymous Coward, 5 Feb 2014 @ 8:27pm
    
    Re: Re:
    but how do you get bailed and not charged ?? bailed to do what ??
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Anonymous Coward, 4 Feb 2014 @ 2:35pm

The Feds have been known to argue all kinds of creative legal theories, so I wonder if they will perhaps insist that Bitcoins are not actually property - and therefore no confiscation ever took place?
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- PRMan, 4 Feb 2014 @ 4:21pm
  
  Re:
  The easier argument is that since all the bitcoins were "tumbled" together, he was involved in a money-laundering scheme. And since the site bragged about this proudly, he KNEW that he was involved in a money-laundering scheme.
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  - 99guspuppet (profile), 4 Feb 2014 @ 9:45pm
    
    tumbling
    The *tumbling* argument is a hoot... based on that everyone in the U.S. that has used a banking system has engaged in money laundering.... i demand they turn their tainted money into the willing hands of the slavemasters who *protect* us.
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    - alternatives(), 5 Feb 2014 @ 4:21am
      
      Re: tumbling
      And in fact, there are rulings in US court that once you hand "your" money over to a bank, it stops being "your" money.
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- Anonymous Coward, 5 Feb 2014 @ 8:28pm
  
  Re:
  like the creative argument that copyright is not property ? Who would buy that argument?
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BentFranklin (profile), 4 Feb 2014 @ 2:44pm

Salvia may be legal in Britain, but I doubt it's legal everywhere he shipped it.
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- Anonymous Coward, 4 Feb 2014 @ 3:04pm
  
  Re:
  If so that the fault of the people buying it. You can't expect online vendors to know the laws of your jurisdiction for you, they sell their products everywhere on the plant.
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  - Anonymous Coward, 5 Feb 2014 @ 8:29pm
    
    Re: Re:
    yes you can, and in fact the law requires it.
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- G Thompson (profile), 4 Feb 2014 @ 10:54pm
  
  Re:
  Personal handguns, and other weaponry including ammunition, & parts are most definitely NOT legal in most places on the planet, but Gunshops etc in America will ship them there.
  
  Strange how they are NEVER prosecuted by the countries who's legal laws they have themselves breached.
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- Anonymous Coward, 5 Feb 2014 @ 3:46am
  
  Re:
  If so it is up to them to prove he shipped outside the UK.
  
  Which the CPS obviously didn't prove.
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out_of_the_blue, 4 Feb 2014 @ 2:57pm

"noting that anything remotely touching Silk Road is somehow tainted and associated with a criminal act"
Funny how that works.

Again, this is NOT an anomaly swept up by rare circumstance, but someone who was out on the margins knowingly and at length, willingly associated with obvious drug dealing, and the only answer reasonable is "BOOHOO".

It's also amazing how closely "libertarians" associate with drug use. Anyone who devotes themselves to dulling their humanity with drugs deserves no sympathy from anyone who wishes to save civilization from the many other kinds of savages.

This isn't bad case making bad precedent, it's bad actors getting well-known and routine sanctions for clear stupidity.
You piratey kids aren't on any noble march for freedom. You're just stealing mindless entertainments. No amount of your watching Hollywood's videos will make the world better -- quite the opposite: it'll just dull your minds further. (195 of 195)

10:57:26[l-250-8]
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- John Fenderson (profile), 4 Feb 2014 @ 3:40pm
  
  Re: "noting that anything remotely touching Silk Road is somehow tainted and associated with a criminal act"
  This guy is engaging in legal commerce, and yet Blue thinks it's perfectly fine to treat him as if he committed crimes because Blue doesn't like the type of good he sold or the people near him while he sold them.
  
  This is yet more proof positive that Blue is adamantly opposed to the rule of law, and in favor the rule of his own opinion.
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    Anonymous, 4 Feb 2014 @ 4:20pm
    
    Re: Re: "noting that anything remotely touching Silk Road is somehow tainted and associated with a criminal act"
    So? There are other people, such as anarchists, who are also opposed to the rule of law.
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    - Pragmatic, 5 Feb 2014 @ 5:37am
      
      Re: Re: Re: "noting that anything remotely touching Silk Road is somehow tainted and associated with a criminal act"
      Unfortunately that now includes US government agencies.
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    - John Fenderson (profile), 5 Feb 2014 @ 8:18am
      
      Re: Re: Re: "noting that anything remotely touching Silk Road is somehow tainted and associated with a criminal act"
      It exposes his hypocrisy.
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Mike Shore (profile), 4 Feb 2014 @ 3:34pm

If it turns out that this bloke's business is totally legit, they'll just "age off" the evidence a la Kim Dotcom
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- Anonymous Coward, 4 Feb 2014 @ 3:38pm
  
  Re:
  ... and let those Bitcoins be "aged off" the guy's wallet.
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Anonymous, 4 Feb 2014 @ 3:52pm

Awww. Would he like some cheese with that whine?
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Rekrul, 4 Feb 2014 @ 4:18pm

There's no way he's ever going to get that money back. I've read of cases where cash was seized from people and not even a cashed paycheck from a legitimate company in the exact amount of the cash, was enough to "prove" that the money wasn't gained illegally.

Once law enforcement has your property, they fight tooth and nail to keep it and he will likely spend more trying to get it back than it's worth.
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- art guerrilla (profile), 4 Feb 2014 @ 5:06pm
  
  Re:
  i'm afraid that is all too true...
  i imagine the times you get restitution are 1/10th to 1/100th of the times the piggies/feds/etc simply TAKE YOUR SHIT...
  
  its that RICO crap being used on EVERYONE (except bidnesses doing REAL RICO crap)...
  
  really, just another unconstitutional brick in the wall of fascism being built around us all...
  
  all the oppression is simply to protect their corruption...
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allengarvin (profile), 4 Feb 2014 @ 4:35pm

Legal in the UK doesn't mean it can stand up against pretty broad Drug Paraphernalia laws, like the federal:

http://www.law.cornell.edu/uscode/text/21/863

And then there are asset forfeiture laws, which will make getting back the money very difficult in any case.
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- G Thompson (profile), 5 Feb 2014 @ 12:18am
  
  Re:
  Awesome.. I'll now be able to get the Australian Federal police to seize assets from every single US Citizen who has sold illegal green laser pointers on Ebay and also criminally charge them as well.
  
  Oh and at same time Ebay itself can be seized..
  
  WOOT!!!!
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Just Sayin', 4 Feb 2014 @ 4:45pm

fail
By choosing to use bitcoin, he chose to accept the concept that whoever holds the coins own the coins, period.

There is no "getting back" or "refunds" in bitcoin. If the coins were held in accounts controlled by Silk Road, they "owned" them.
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alternatives(), 5 Feb 2014 @ 4:19am

Silver back from Sunshine Mint
This will be as successful as the people who had Silver at the Sunshine mint in e-Liberty Dollars have been at getting THAT Silver back.
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