#USgovernment #preparestoauction$17m of #seizedSilkRoadbitcoins Total of 29,656 bitcoins up #forsale this week in #blindauction after the #forfeiture from #blackmarket Silk Road Share 9 inShare0 Email Alex Hern theguardian, Tuesday 24 June 2014 16.03 BST Jump to comments (2) The notice on the Silk Road following the FBIs seizure of its servers. The notice on the Silk Road following the FBIs seizure of its servers. Photograph: David Colbran/Demotix/Corbis The US government is preparing to auction off more than 29,000 bitcoins seized from the Silk Road website when its alleged chief Ross Ulbricht was arrested, in a move that could net it over $17m. Ulbricht, 30, was arrested in October 2013, charged with running the Silk Road, then the worlds biggest online black market. The FBI seized the sites assets, as well as Ulbrichts. The anonymous nature of the Silk Road meant the bulk of those assets were in bitcoin, the cryptocurrency which exists only in digital form. Ulbricht held 144,000, and the Silk Road another 29,656. Ulbrichts bitcoins remain in the care of the FBI, but a judge signed a forfeiture order on the Silk Road coins - which had no nominated owner, and were judged to be proceeds of crime. Ulbricht, who has not been tried, contests the forfeiture of the 144,000 bitcoins. The US Marshals Service is now trying to dispose of the seized Silk Road assets. The organisation has broken them up into blocks of 3,000 bitcoins each, and put out a call to interested parties to register as bidders until Monday 23 June. Registration required, amongst other things, a $200,000 deposit to ensure that bidders were legitimate. The initial auction, of nine blocks of 3,000 bitcoins - with each block worth about $1.7m at current exchange prices of around $588 - and one of 2,656 bitcoins, worth around $1.5m, will take place on Friday. Bidders need to email in a signed scan of their bid form, between 6am and 6pm, in a blind auction in which bidders dont see rivals bids, and the government treats the highest submitted price as the prevailing bidder. Winning bidders will have to pay in cash. When the FBI seized Ulbrichts bitcoins, in early October 2013, the value of one bitcoin was $127. In the intervening period, the price spiked at almost ten times that, $1155 per coin - leading the Manhattan attorney-general to state the value of the 29,656 bitcoins as $28m in January - but has now settled at around $588. Even so, the government has still made a profit of $13.5m just by holding on to the Silk Road bitcoins for nine months. Were it to sell Ulbrichts personal assets at the same price, that profit would rise to an astonishing $66m. Owing to the public nature of the bitcoin blockchain, users have been able to keep an eye on the seized money since Ulbrichts arrest, and the news of the upcoming auction was first broken when the two accounts which had held Ulbrichts and the Silk Roads bitcoin were cleared out on Thursday 12. The money can now be found residing in two different wallets – at least until the sale completes. theguardian/technology/2014/jun/24/us-auction-seized-silk-road-bitcoins?guni=Network%20front:network-front%20main-3%20Main%20trailblock:Network%20front%20-%20main%20trailblock:Position5
Posted on: Tue, 24 Jun 2014 16:30:38 +0000
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