Feds to hold a Bitcoin auction for seized Silk Road money

The US Marshals Service could net nearly $20 million in an auction it's holding to sell the roughly 30,000 bitcoins it seized from the online drug bazaar's servers.

Bitcoins
Bitcoin

The US Department of Justice is looking to make millions from Bitcoin sales.

No, it's not getting into the virtual currency market, rather it's selling seized bitcoins from its big takedown of the defunct online drug market Silk Road.

The US Marshals Service announced Thursday that it's holding an auction for the nearly 30,000 bitcoins it seized from Silk Road last October. The 12-hour auction will take place on June 27, and interested bidders can register up until June 23 by making a $200,000 wire transfer to a government bank.

"The bid must be an all cash offer," the US Marshals Service said in its announcement. "Bids that are contingent on financing terms of any kind will not be considered. All bids must be made in U.S. dollars."

Currently Bitcoin is valued around $650 per coin, which means the 30,000 bitcoins the government is hawking could net it nearly $20 million. The US Marshals Service will carry out the auction by selling nine blocks of 3,000 bitcoins and a tenth block of 2,657 bitcoins.

Silk Road was an online drug marketplace where its nearly 1 million anonymous users could buy and sell all sorts of drugs using the secure Tor browser. The purchases were typically made with Bitcoin and sales are said to have totaled more than $1 billion.

Last October, the FBI seized Silk Road and arrested its alleged mastermind Ross Ulbricht, aka "Dread Pirate Roberts." Reportedly, Ulbricht, 29, had earned nearly $80 million operating the site. In the days after Ulbricht's indictment, eight people in three different countries were arrested for allegedly being connected to the sale of drugs on Silk Road.

The US Marshals Service Bitcoin auction could be the first of many. The agency noted that it has tens of thousands more bitcoins from the Silk Road seizure.

"This auction is for the bitcoins contained in wallet files that resided on Silk Road servers," the US Marshals Service wrote. "This auction does not include the bitcoins contained in wallet files that resided on certain computer hardware belonging to Ross William Ulbricht that were seized on or about October 24, 2013."

Ulbricht has been charged with narcotics trafficking, computer hacking, and money laundering and he faces a minimum of 30 years in prison and a possible maximum sentence of life in prison if convicted.

(Via CoinDesk).

Correction, June 13 at 11:15 a.m. PT: An earlier version of this article incorrectly stated the amount of money the US government could earn in the auction. It could earn $20 million.

About the author

Dara Kerr is a staff writer for CNET focused on the sharing economy and tech culture. She grew up in Colorado where she developed an affinity for collecting fool's gold and spirit animals.

 

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