The Feds Just Collected $48 Million from Seized Bitcoins - Fortune

The Feds Just Collected $48 Million from Seized Bitcoins

Jeff John Roberts

The U.S. Justice Department has claimed the proceeds from the sale of 144,336 bitcoins, valued at just over $48 million, that it obtained after shutting down the notorious online drug market Silk Road in 2013.

While the government had already sold the bitcoins in a series of auctions in 2014 and 2015, the creator of Silk Road, Ross Ulbricht (aka Dread Pirate Roberts) had challenged the legality of the forfeiture.

Ulbricht, however, agreed to drop the claims last weeks, according to the office of Joon H. Kim, the Acting U.S. Attorney for Manhattan—meaning the government can now claim the proceeds.

The $48.2 million total proceeds means the government sold the bitcoins for an average of $334. In retrospect, the sale appears to be a matter of bad timing for the government: the price of a bitcoin was as high as $1,000 at the end of 2013 before the digital currency went into a prolonged slump until mid-2016 when it began to soar. The current price is around $4,400—meaning the Justice Department would have made around $630 million had the sale taken place today.

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Among the beneficiaries of the government's bitcoin fire sale was venture capitalist Tim Draper, who bought an additional batch of nearly 30,000 bitcoins seized from Silk Road.

The U.S. Attorney's office did not specify if the proceeds from the seizure will go to the agencies, including the FBI and IRS, that helped bring down Silk Road, or if the money will instead go to the U.S. Treasury. A spokesperson for Koon declined to provide an initial comment, but said he would offer more details soon.

Ulbricht's decision to challenge the bitcoin seizure came in part because the investigation that brought down Silk Road was marred by two corrupt agents from the Drug Enforcement Agency and the Secret Service, who posed as criminals in order to steal bitcoins.

The corrupt agents did not, however, significantly affect the trial of Ulbricht, who was convicted based on a mountain of evidence, including detailed server and chat records that identified him as the "Dread Pirate Roberts" who built and controlled Silk Road.

This article is part of Fortune’s new initiative, The Ledger, a trusted news source at the intersection of tech and finance. Click here for more on The Ledger.

Correction: an earlier version of this article misstated the present day value of the 440,000 bitcoins.

How Did the Las Vegas Gunman Get His Hands on a Weapon of War? - Fortune

How Did the Las Vegas Gunman Get His Hands on a Weapon of War?

Thomas Gabor

On Sunday night in Las Vegas, a shooter opened fire on a concert from the 32nd floor of the Mandalay Bay resort with what appeared to be an assault weapon. This is a devastating tragedy, and one that has unfortunately become a trend in the U.S.: There has been an average of one mass shooting a day in 2017 (defined as four or more people shot, excluding the shooter). This incident has eclipsed all previous mass shootings in U.S. history, as there are already 58 people dead and hundreds wounded.

What kind of weapon is capable of inflicting so many casualties, from such a distance, in a matter of 10 to 15 minutes? While we don’t know where the gunman got his weapons and precise information on them has not been disclosed, based on reports of the rate of fire, they were likely either semiautomatic or fully automatic assault weapons. Semiautomatic assault weapons (whose trigger must be pulled to fire each round) have a rate of fire of over 100 rounds a minute. These weapons were banned from 1994 to 2004 under what is commonly referred to as the “assault weapon ban,” and are now readily available for sale in all but six states. There are reports that the shooter might have fired an automatic weapon (one just presses the trigger and the weapon keeps firing until it is released), which can fire up to a thousand rounds a minute. These weapons are tightly regulated. Regardless of the rate of fire, many of these weapons can pierce a soldier’s helmet from a distance of 500 yards.

More than half of the deadliest mass shootings since 1949 have occurred in the last decade, I’ve found in my own research. This is despite improved emergency response and better surgical outcomes. The only credible explanation for the increased lethality of these incidents is deadlier weapons and ammunition. Assault-style firearms have been the weapons of choice in many of the deadliest mass shootings in recent history: Orlando, Fla., Newtown, Conn., and San Bernardino, Calif.

The incident in Las Vegas reveals the fallacy of the tired slogan, “Guns don’t kill, people do.” Yes, we need to address why so many Americans are attempting to kill a maximum of their fellows at random. At the same time, only a weapon designed for war could kill so many people from such a distance. High-capacity magazines capable of holding up to 100 rounds of ammunition only make that danger worse.

These weapons and magazines should never be in civilian hands and should be banned. Obviously, this is a tall order given the influence of the gun lobby on the Trump administration and majority party in Congress. But it’s not impossible. Existing weapons can be bought back from owners at a fair market price and destroyed. Australia melted down up to a third of its gun inventory following its deadliest-ever mass shooting in 1996, and has all but eliminated public mass shootings.

The gun lobby claims to champion freedom. Yet every successive large-scale mass shooting leads to an increasing demand for security and a continuing erosion of Americans’ freedom to use public spaces without fear. Citizens need to sustain their outrage over this incident and demand restrictions on ownership of assault-style weapons.Thomas Gabor is a criminologist based in Florida and author of Confronting Gun Violence in America.

Mueller Tasks an Adviser With Getting Ahead of Pre-Emptive Pardons - Bloomberg

Mueller Tasks an Adviser With Getting Ahead of Pre-Emptive Pardons

By Greg Farrell

October 3, 2017, 7:02 PM GMT+10

Dreeben defended more than 100 U.S. cases to Supreme Court

Criminal law expert could bulletproof Mueller team’s work

Why Robert Mueller Is the Perfect Man for the Job

Why Robert Mueller Is the Perfect Man for the Job

U.S. Special Counsel Robert Mueller has a distinctly modern problem. The president, judging by his tweets, could try to pardon people in his circle even before prosecutors charge anyone with a crime.

Mueller’s all-star team of prosecutors, with expertise in money laundering and foreign bribery, has an answer to that. He’s Michael Dreeben, a bookish career government lawyer with more than 100 Supreme Court appearances under his belt.

Robert MuellerPhotgrapher: Alex Wong/Getty Images

Acting as Mueller’s top legal counsel, Dreeben has been researching past pardons and determining what, if any, limits exist, according to a person familiar with the matter. Dreeben’s broader brief is to make sure the special counsel’s prosecutorial moves are legally airtight. That could include anything from strategizing on novel interpretations of criminal law to making sure the recent search warrant on ex-campaign adviser Paul Manafort’s home would stand up to an appeal.

"He’s seen every criminal case of any consequence in the last 20 years," said Kathryn Ruemmler of Latham & Watkins LLP, who served as White House counsel under President Barack Obama. "If you wanted to do a no-knock warrant, he’d be a great guy to consult with to determine if you were exposing yourself.”

Three Decades

Dreeben, 62, built that expertise over three decades as an appeals lawyer at the Justice Department. As a deputy solicitor general, he’s pored over prosecutors’ moves in more than a thousand federal criminal prosecutions and defended many of them from challenges all they way to the nation’s highest court.

Dreeben has begun working on legal issues as a counselor to Mueller but is also retaining some of his solicitor general work for the sake of continuity, according to Peter Carr, a spokesman for the special counsel’s office. Carr declined to elaborate on Dreeben’s work with Mueller or make Dreeben available for comment.

Pre-emptive pardons are a distinct possibility now that current and former Trump advisers are under Mueller’s scrutiny. Trump himself has tweeted that everyone agrees the U.S. president has “complete power to pardon." Some of those kinds of executive moves have been well studied, including Gerald Ford’s swift pardon of Richard Nixon and Bill Clinton’s exoneration of fugitive financier Marc Rich. But the legal territory is largely uncharted over pardons of a president’s own campaign workers, family members or even himself -- and how prosecutors’ work would then be affected.

Trump, Russia and the Early Murmurs About Pardons:

What Dreeben brings to the question, say those who know him, is a credibility that comes from parsing how criminal prosecutions have played out across the country. A balding and bearded New Jersey native with a slightly nasal delivery, he has a knack for building careful arguments and the eloquence in court to lay them out in well-reasoned paragraphs, said Miguel Estrada, a lawyer at Gibson Dunn & Crutcher LLP.

His path wasn’t exactly direct. Dreeben intended to pursue an advanced degree in history at the University of Chicago before changing his mind and enrolling at Duke University School of Law, according to a profile of him last year in Law360. He studied at Duke under Sara Beale, who’d worked in the Solicitor General’s office and helped plant the idea of representing the U.S. in arguments before the country’s highest court.

Dreeben got his first shot in 1989. His opponent before the Supreme Court was another first-timer, a private practice lawyer named John Roberts.

Dreeben lost. But the moment left an impression on Roberts, now the court’s Chief Justice. After Dreeben made his 100th argument before the court last year, Roberts called him back to the lectern, recalling the decades-earlier meeting.

“You have consistently advocated positions on behalf of the United States in an exemplary manner,” Roberts said, extending the court’s appreciation for his “many years of advocacy and dedicated service.”

Dreeben had urged the court that day to uphold the conviction of former Virginia governor Robert McDonnell on charges of public corruption. The Supreme Court ultimately overturned McDonnell’s conviction.

Dreeben’s reviews of how cases were built against McDonnell and others will be invaluable to Mueller. Appellate lawyers like Dreeben are stuck with decisions already made at the prosecutorial level, said Estrada, who worked in the Solicitor General’s office in the 1990s. But now, he added, Dreeben is in a position to troubleshoot problems before cases are filed.

“You have to argue what you’ve got, and the cake is already baked,” Estrada said. On Mueller’s team, by contrast, Dreeben “has the opportunity to measure the flour.”

Trump’s Folly - Associated Press

Trump’s Folly

ANDREW HARNIK / ASSOCIATED PRESS

SEPTEMBER 13, 2017

Thomas L. Friedman

America faces two serious national security threats today that look wildly different but have one core feature in common — they both have a low probability of happening, but, if they did happen, they could have devastating consequences for our whole country and the world.

One of these threats is called North Korea. If the reckless leader of North Korea is able to launch an arsenal of intercontinental ballistic missiles that strike the U.S. mainland, the impact on America will be incalculable.

And even though the odds of that happening are low — it would be an act of suicide by the North Korean dynasty — President Trump is ready to spend billions on antimissile systems, warships, cyberdefenses, air power and war games to defuse and deter this North Korean threat.

And if we prepare for a North Korean nuclear attack and it never happens, we will be left with some improved weaponry that we might be able to use in other theaters, like fighter jets, ships and missiles — but nothing particularly productive for our economy or job creation.

The other low-probability, high-impact threat is climate change fueled by increased human-caused carbon emissions. The truth is, if you simply trace the steady increase in costly extreme weather events — wildfires, floods, droughts and climate-related human migrations — the odds of human-driven global warming having a devastating impact on our planet are not low probability but high probability.

But let’s assume for a minute that because climate change is a complex process — which we do not fully understand — climate change is a low-probability, high-impact event just like a North Korean nuclear strike. What is the Trump team doing when confronted with this similar threat?

It’s taking a spike and poking out its own eyes. In possibly the most intellectually corrupt declaration of the Trump era — a high bar — Scott Pruitt, a longtime shill for oil and gas companies now masquerading as the head of the E.P.A., actually declared that even discussing possible links between human-driven climate disruptions and the recent monster storms was “insensitive.” He said that after our country got hit by two Atlantic Category 4 hurricanes in the same year for the first time since records have been kept — storms made more destructive by rising ocean levels and warmer ocean waters.

Makes me wonder … if Pruitt were afflicted with cancer, would he not want scientists discussing with him, let alone researching, the possible causes and solutions? Wouldn’t want to upset him.

Frauds like Pruitt like to say that the climate has been changing since long before any human drove a car, so how could humans be causing climate change? Of course they aren’t solely responsible. The climate has always changed by itself through its own natural variability. But that doesn’t mean that humans can’t exacerbate or disrupt this natural variability by warming the planet even more and, by doing so, making the hots hotter, the wets wetter, the storms harsher, the colds colder and the droughts drier.

That is why I prefer the term “global weirding” over “global warming.” The weather does get warmer in some places, but it gets weird in others. Look at the past few months: Not only were several big U.S. cities slammed by monster hurricanes, but San Francisco set a heat record — 106 degrees on Sept. 1, a day when the average high there is 70 degrees; the West was choked by record-breaking forest fires exacerbated by drought; and South Asia was slammed by extraordinarily harsh monsoons, killing some 1,400 people.

But what if we prepare for disruptive climate change and it doesn’t get as bad as feared? Where will we be? Well, we will have cleaner air to breathe, less childhood asthma, more innovative building materials and designs, and cleaner, more efficient power generation and transportation systems — all of which will be huge export industries and create tens of thousands of good, repeat jobs. Because with world population steadily rising, we all will need greener cars and power if we just want to breathe clean air, no matter what happens with the climate. We will also be less dependent on petro-dictators.

Indeed, it is safe to say, that if we overprepare for climate change and nothing much happens, it will be exactly like training for the Olympic marathon and the Olympics get canceled. You’re left with a body that is stronger, fitter and healthier.

Trump has recently fired various knuckle-headed aides whose behavior was causing him short-term embarrassment. The person he needs to fire is Scott Pruitt. Pruitt is going to cause Trump long-term embarrassment. But instead, together they are authoring a new national security doctrine — one that says when faced with a low-probability, high-impact event like North Korea, the U.S. should spend any amount of money, and if the threat doesn’t materialize, well, we’ll have a lot of Army surplus and scrap metal.

But when faced with an actually high-probability, high-impact threat called climate change, we should do nothing and poke both our eyes out, even though if the impact is less severe — and we prepare for it anyway — we will be left healthier, stronger, more productive, more resilient and more respected around the world.

That is the Pruitt-Trump Doctrine — soon to be known as “Trump’s Folly.”