Bitcoins Seized From Silk Road Marketplace To Be Auctioned

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Bitcoin
There's a Bitcoin scavenger hunt across New York City.

The United States government is planning to sell one of the biggest caches of bitcoins, a hoard that's part of the bitcoin cache seized in October from the Silk Road marketplace, which was used for buying and selling drugs, Bloomberg reported

Later in June, an auction for 29,656 bitcoins will take place. The U.S. Marshals Service posted an announcement of the auction on Thursday, according to USA Today. About 144,341 bitcoins, worth about $86 million at current prices, were transferred from the FBI to the Marshal Service, authorities said.

Bitcoins are an unregulated online currency that aren't backed by gold, silver or other commodities. They do not generally exist in the real world, so what's being auctioned are actually sets of numbers entered in a public ledger online.

The U.S. government seized the bitcoins when Silk Road operator Ross William Ulbricht was arrested for conspiracy to commit computer hacking and conspiracy to launder money.

On Thursday, the value of bitcoins declined 7.3 percent to $582 apiece, according to the CoinDesk Bitcoin Price Index.

The Silk Road marketplace website, described by the U.S. as a “sprawling black-market bazaar,” was used by drug dealers and other vendors to distribute hundreds of kilograms of illicit drugs and launder hundreds of millions of dollars, the U.S. said.

The auction will reportedly begin at 6 a.m. on June 27. Bidders will have to register in advance, show proof of identity and deposit $200,000 in cash with the U.S. Department of Justice, Bloomberg reported.

The winner or winners will be announced on June 30. The remainder of the the bitcoins may be sold at a later date. “Those other bitcoins are in a wallet controlled by the Marshals,” said Linzey Donahue, a spokeswoman for the U.S. Marshals. “They are subject to an interlocutory sale order and may be sold pursuant to a court order at a later date.”

The United States seized about 173,991 bitcoins during the investigation, Manhattan U.S. Attorney Preet Bharara said.

The bitcoins recovered Jan. 15 from Silk Road servers were ordered forfeited in a civil action filed by the U.S. that seeks all of Silk Road’s assets. Ulbricht has filed a claim asserting ownership of the bitcoins and contesting their forfeiture.

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