Sounds like good news but the press release doesn't detail how the FBI managed to trace, positively identify and then seize such a huge pile of crypto ($15B) from a suspect they say took extensive steps to launder and hide the source and ownership of the crypto. I'm curious because this guy is clearly very experienced, highly sophisticated and located in a country where the government and law enforcement are obviously tacitly protecting him.
So did the U.S. hack this guy? Anyone who manages to build such a massive multi-national corporation with myriad illicit businesses but also dozens of legitimate businesses with thousands of employees - including a large bank with over 100,000 customers - and then operate it all for over a decade, doesn't strike me as someone who's trivially careless. I mean he managed to successfully protect that much money for a long time from his own criminal co-conspirators (who would certainly include hackers with insider knowledge of his operations), criminal competitors and all the people he was bribing like senior Cambodian politicians, law enforcement and intelligence agencies.
This just strikes me as either a very lucky break or a perhaps a sign that the FBI is adopting a new playbook to go after shielded international operations like this. Like maybe involving U.S. and 'Five Eyes' intelligence assets.
"but the press release doesn't detail how the FBI managed to trace, positively identify and then seize such a huge pile of crypto ($15B) from a suspect they say took extensive steps"
Am I slow??? or what under circumstance that you expect FBI to told press how their operate????
I am also curious how the US government obtained possession of the bitcoin if the defendant is still at large. Doesn’t that defeat the whole point of bitcoin?
According to Ars Technica: "Adding further mystery, it’s unknown how federal officials managed to obtain the cryptographic keys required to seize the funds from Zhi."
My assumption is that at this point they just have orders from a judge allowing them to do it and they will find the means later.
Allowing them to do what? The feds are saying they already have the keys, so either they are lying, or they already had the means to get the keys. Which would be the juicy part of the story.
Yes, and the other big questions are how they even know about the existence of the bitcoin and then how they were able to demonstrate sufficient probable cause to a judge that A) the bitcoin belongs to the suspect, and B) this bitcoin is the direct proceeds of the charged crimes. Given the extremely unusual circumstances around this seizure, its unprecedented size and the complete lack of details - I suspect something new and interesting has happened here.
Unfortunately, we may never find out unless they manage to arrest the suspect, which seems unlikely. The more interesting scenario might be if the Prince Group files suit challenging the seizure. In that case, the government would not only have to produce evidence proving A and B above, but also that the evidence wasn't obtained illegally (like from secret NSA wiretaps on domestic Cambodian telecoms or targeted covert hacking). Given the circumstances, it's hard to imagine the FBI being able to offer plausible 'parallel construction' to support the legality of the evidence.
Finding a judge who does not really understand what Bitcoin is won't be too hard. All your "evidence wasn't obtained illegally" and so on are questions impossiblec to ask without a reasonable amount of knowledge. Requirements of a judge order aren't really much of a bar to jump, hardly more than a four eyes formality.
There exist a number of possibilities, all of which are equally likely
1. they are lying. The most obvious one. It's legal and is expected that law enforcement lie in the United States.
2. defendant was so dumb he had the funds in a crypto exchange account
3. Law enforcement has no idea what keys or crypto is. Also likely, law enforcement in the US is not required to be competent.
4. defendant was so dumb he landed on a flight in the US. This would be exceptionally stupid
5. The US military or the intelligence community either coerced the keys out of him or just beat the keys out of him. There are no jurisdictional issues with this approach. From what I understand this guy isn't very popular in any country, so few countries would care. Even fewer would want to publicly discuss how their sovereignty was violated
6. A random member of the criminal organization had access to most but not all of the keys. He showed up at a US embassy and said "well I did lots of bad stuff. I'd like to disappear now & not at a location named Guantanmo! How about we cut a deal"
My personal bet is on #3. It's effectively impossible for anyone to prove they don't have the keys. The only person who could do that would the defendant, who has no interest in doing so.
Good reply. While #2 and #4 are certainly possible, I find it hard to believe this guy gets this far for this long without being sufficiently paranoid and street smart.
I think the most likely is a combo variant of #5 and #6. Maybe the USG (or a cooperating government) got leverage on one of his lieutenants - like lieutenant's adult kid goes to NYC to party for a weekend with friends without telling daddy and despite it being against dad's rules. USG quietly holds the kid under some immigration pretext (much easier these days) and forces the lieutenant to put a USB thumb drive in his boss's 'special' PC.
Alternatively, a probable weak point with most overtly criminal kingpins who accumulate literal billions is they really can't trust anyone around them to not steal it. So the guy probably has to keep the crypto keys to his 'big wad' physically with him on a mobile device or memory stick, maybe protected only by a password short enough he can remember it. In that scenario, the USG just does a 'sneak and peek' and images the device, maybe while the guy is transiting a third country. Then it's just a matter of either using one of the NSA's tier 1 vulns on the mobile device image or deploying the NSA's super-computer farm to crack the 'human-memorable' password. If so, it would have been much smarter for the guy to control access to the 'big wad' with split keys separated on multiple devices - and only keep one required part around his neck. Then neither the 'sneak and peak' nor the 'crowbar to the balls' methods would work.
In any of those scenarios, the very interesting part is it shows the Trump admin and Trump's new FBI head Kash Patel are willing to cross some new lines which haven't been publicly crossed before - like using secret intelligence assets for purely criminal enforcement. Note: I think the USG has done this before but it's been pretty rare and always been in ways that were unseen or otherwise deniable, because the CIA/NSA have been extremely resistant to using their best toys for fear of losing their best toys. I suspect the Trump admin has crushed this resistance. A potentially relevant fact is Kash Patel was previously on the National Security Council during Trump's first term, so he'd be familiar with intel assets. Obviously, in the near-term that's bad news for a handful of major international criminals and in the long-term it may be bad for US intelligence capabilities (as the reasons for CIA/NSA resistance weren't baseless).
Quite possible they hacked the device they were stored on. I can't find confirmation that Chen has actually been arrested, as opposed to being charged in absentia.
> Those funds (the Defendant Cryptocurrency) are presently in the custody of the U.S. government.
> The defendant and his co-conspirators subsequently used some of the criminal proceeds for luxury travel and entertainment and to make extravagant purchases such as watches, yachts, private jets, vacation homes, high-end collectables, and rare artwork, including a Picasso painting purchased through an auction house in New York City.
My guess some of defendants were in New York or around the US. You can be a criminal master mind and also be a complete f*king idiot.
So did the U.S. hack this guy? Anyone who manages to build such a massive multi-national corporation with myriad illicit businesses but also dozens of legitimate businesses with thousands of employees - including a large bank with over 100,000 customers - and then operate it all for over a decade, doesn't strike me as someone who's trivially careless. I mean he managed to successfully protect that much money for a long time from his own criminal co-conspirators (who would certainly include hackers with insider knowledge of his operations), criminal competitors and all the people he was bribing like senior Cambodian politicians, law enforcement and intelligence agencies.
This just strikes me as either a very lucky break or a perhaps a sign that the FBI is adopting a new playbook to go after shielded international operations like this. Like maybe involving U.S. and 'Five Eyes' intelligence assets.