FBI to auction $17.3 million in seized bitcoins

A stockpile of the virtual currency seized as part of a government crackdown on the Silk Road online marketplace last year will be sold on June 27.

By MSN Money Partner Jun 13, 2014 1:30PM

Bitcoins © Karen Bleier/AFP/Getty ImagesBy Michael Casey, The Wall Street Journal


The U.S. government on June 27 plans to auction almost 30,000 bitcoins, valued at $17.3 million, that were seized as part of the Federal Bureau of Investigation's crackdown last year on the Silk Road online marketplace for illicit drugs, the U.S. Marshals Service said Thursday.


The Wall St. Journal on MSN MoneyIn a statement, the Marshals Service confirmed it had taken custody of an additional 144,341.53 bitcoins that were seized as part of that operation. Those coins also are being readied for a separate sale, according to FBI spokeswoman Kelly Langmesser.


The Marshals Service said the first auction would take place over a 12-hour period on June 27 in nine blocks of 3,000 bitcoins and one of 2,657 coins. Interested buyers can place bids via a form at the U.S. Marshals website. The winners will be notified on June 30.


The liquidation of such a large amount of bitcoins could depress the price of the digital currency.


Bitcoin's price was down 7.15 percent Thursday to $583.04, according to the CoinDesk bitcoin price index, after having staged a two-month recovery from a recent low of $344.24 hit on April 11.

Bitcoin's price reached an all-time high of $1,165.89 in December before regulatory actions in China and the U.S., coupled with the collapse of Tokyo-based bitcoin exchange Mt. Gox, sent the digital currency sharply lower in the first quarter of this year.


The FBI in October arrested Ross Ulbricht and charged him with being the owner and administrator of the Silk Road site under the pseudonym Dread Pirate Roberts.


Ulbricht, who has pleaded not guilty to those charges, has claimed ownership of around 29,000 seized coins. His lawyer, Joshua Dratel, on Thursday said he would continue to push for the return of those coins but didn't object to the sale, which was authorized by a New York judge under a forfeiture ruling earlier this year.


"Anything that would maximize or at least keep the property value [of the seized coins] is useful to us down the road," Dratel said.


A trial date of Nov. 2 has been set.


More from The Wall Street Journal


3Comments
Jun 13, 2014 4:04PM
Jun 13, 2014 6:08PM
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Insanity!


A government body is providing legitimacy to Monopoly money.

Jun 13, 2014 6:01PM
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The only reason Bitcoin has failed so far is because governments have made it that way. Why? It's a threat to their Fiat money empire. No regulation, no third parties, no central planners, no government controls. Governments hate Bitcoin because they can't control it in order to pillage and plunder the system. Through the use of the policing powers of government the Feds have instituted confiscatory legislation and making it difficult for anyone to do business against the Fiat money monopoly.
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