A Law Enforcement Encounter: If you ran a Bitcoin related service before the thing hit $100 you prolly ought to be somewhat concerned and/or prepared

So this afternoon I was roused from my day slumber by vigorous knocking at my front door. Under the impression the two gentlemen at my door step might be some sort of process servers or collections agents visiting about my substantial student loan debt I begrudgingly inquire as to what is going on. They inquire as to who I am, and I inquire as to who they are. 1 When they show badges I offer confirmation that I am indeed the person referred to frequently by the slave name2 they used.

Their inquiry was laser focused on any information I might have about connections between BTCPak  and The Silk Road3 of which I have none that can't be discovered by scraping public information off of the public web. BTCPak was this thing that accepted Bitcoin and provided prepaid codes you could load on to shitty Debit cards. I was new and didn't know any better so I had some of the most costly eatings and drinkings of my life. BTCPak was one of the more expensive ways to turn Bitcoin into US Dollars, but its advantage was it was fast and had a great reputation for working. If there weren't any codes to be had, the site wouldn't take Bitcoin. If you sent it Bitcoin it gave you the code in six confirmations.  There was no market I knew of to feed the codes the other direction.  The entire venture didn't even really seem to be a business. It just seemed to be a machine DBordello built to acquire Bitcoin in an automated fashion which as far as I can tell was turned off, because the future he was buying all of the cheap coins for finally arrived.

A notable thing that kept coming up was an incredulity on the part of the investigators was that there was much of anything happening in early Bitcoin that wasn't shady and related to Black Market drugs. In reality a lot of stuff was happening on the plaintext Internet without the slightest shade of illegality. I mentioned the Devcoin4 thing that was my first source of any actual amount of Bitcoin. Devcoin was/is this arrangement where by dumping text into a wiki you earned coins on an altchain. You could then take the coins to this shitty exchange called Vircurex where you could dump them for BTC. As astounding as it seems at the time when I started doing this devcoin thing dumping a few thousand words in their wiki was probably worth a two digit number of BTC in the first month I got paid. Fuck me for having been so shortsighted and having not quite stumbled into what actual people were writing about Bitcoin. As astoundingly stupid as the premise sounds much of early Bitcoin involved people throwing coins around for appallingly, dumbfoundingly, stupid reasons in the name of "supporting Bitcoin" and "getting the ecosystem moving." Many stupid and lucrative things were scams of the Pirateat40 and GLBSE sort,5 I instead did the writing for Devcoins thing because I like sleeping soundly at night.

What you, dear reader can take from this encounter is that if you were involved with Bitcoin before Coindesk6 became a thing and live in the United States, you too might be questioned by agents of two separate federal law enforcement agencies at the same time. If they are asking about BTCPak now, who knows how long the backlog of sites and ventures they are working through is. It's something to prepare for.  When the agents suggested that I probably never expected they'd find me, they seemed a little shock when I replied that I kind of expected this attention eventually. I don't exactly keep the connections between my self and my slave name incredibly well guarded secrets, at least not on the scale of Silk Road users and administrators.

This old Boy Scout would like to remind everyone of the motto: "Be Prepared".


  1. The reason for this is in my jurisdiction failure to identify yourself in a law enforcement encounter is a crime  of questionable constitutional provenance, while having a conversation with a debt collector or process server that consists of nothing on your part other than intoning "Fuck You" a myriad of different was is great justice for all and legally sound.  

  2. This odd thing happens when use a screen name  long enough and act with established, credible pseudononymity in a space long enough, especially one with such an effective Web of Trust surrounding it. The layperson Toby gets asked about the learned amateur Bingo's hobby and suddenly you find yourself in an IRL encounter where you feel like you are wearing a person suit. Welcome to the future, its a weird fucking place.  

  3. That thing I've avoided and wrote about on this blog before.   

  4. Even though devcoin has dropped twenty times in value from ~200 satoshis per to ~10 satoshis per now, holding it would still have booked a dollar denominated gain over the time. But no, holding Devcoin would be stupid.  

  5. Well so it would have seemed at least to the people running them. Running such a thing though doesn't fit my acceptable risk profile in the same way The Silk Road never fit my acceptable risk profile.  

  6. Yes, the FBI agent name dropped Coindesk as a thing he reads as well as admitting to having a small amount of Bitcoin.  

9 thoughts on “A Law Enforcement Encounter: If you ran a Bitcoin related service before the thing hit $100 you prolly ought to be somewhat concerned and/or prepared

  1. Sounds like BTCPak was running what you'd call an unlicensed money transmitter. If people used it to cash in and out of Silk Road, that could be enough to draw interest from law enfct (as opposed to the hundreds of unlicensed MSBs, and licensed but non-compliant ones, that are generally ignored). My guess would be that the friendly visit was evidence-gathering for a case against BTCPak "conspirators", nothing for you to be worried about.

    • Maybe? It would still be a good idea for people to have a good idea of the services they've used and why they've used them in case they get a friendly visit.

  2. Seems odd, to me, that governmental fishing is legal. I, most probably naively. like to think The Netherlands is friendlier to its residents…

    • Well, you could refuse to let them in, and then they would go get a warrant. Fishing is necessary to catch fish. They don't just jump into your boat!

  3. How could so many supposedly savvy individuals be so naive as to think that sovereign nations would allow a bunch of cyber-hippies to concoct a supposedly untaxable, untraceable currency to compete with their official coin of the realm?

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