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The DEA Makes Its First Bitcoin Seizure

The online currency widely used to purchase drugs may be less cop-proof than previously thought.

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By Bryan Le

06/24/13

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For the first time since its inception, a small amount of Bitcoin—a form of online currency routinely used to buy drugs online—has been "seized" by the US Drug Enforcement Agency. The currency is a common form of payment on the online drug market Silk Road, where its secure and hard-to-trace nature is believed to protect buyers and sellers. But Bitcoin may not be as secure as previously thought. According to DEA documents, the agency has seized the grand total of 11.02 BTC ($814.22 USD) of the digital currency in forfeiture from Eric Daniel Hughes of South Carolina after he used it to purchase a "controlled substance." It remains unclear how exactly the Bitcoin was "seized," but it's unlikely that it was literally plucked from the web. The blog Let's Talk Bitcoin speculates it was part of a sting operation: “'Seizure' is probably a word used to imply that money was received in the process of a Silk Road sting operation, rather than actually seized from the bitcoin user’s wallet,” says Andreas M. Antonopoulos, a security expert and contributor to the site. By comparing the time at which the DEA claims it seized the Bitcoins and the Bitcoin's transaction records, it seems the DEA caught the money as it came out from Bitcoin's security protocols, not before. Let's Talk Bitcoin guesses the DEA may have set up a fake “honeypot” account to sell the drugs and reported them as seized when the payment came through.

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