US Federal Marshalls to auction seized Bitcoins from Silk Road

Shawn Knight

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silk road

When the FBI brought down the world’s largest online drug marketplace last year and arrested alleged mastermind Ross Ulbricht, they also took possession of the site’s assets – nearly 30,000 Bitcoins. On Thursday, the US Federal Marshalls moved those coins in preparation to auction them off later this month.

In what’s being described as an eBay-style auction, the government will essentially trade real money for virtual currency. Those without deep pockets need not apply as the coins will be sold in blocks of 3,000 Bitcoins (roughly $1.8 million worth) over a 12-hour period on June 27.

silk road

Bids will be placed via e-mail using a form on the US Marshals’ website. Those interested in participating must register between June 16 and June 23 as well as make a refundable deposit of $200,000 using a bank wire transfer from an account in the US.

It’s unclear whether or not this is the best time to cash out but one thing is for sure: Bitcoin traders clearly see an opportunity here. Once news of the sale spread, Bitcoin value took a sharp nose-dive. As of writing, coin value is down roughly $45.

Ulbricht’s personal stash of Bitcoins – 144,341 to be exact – isn’t being included in the auction. The alleged mastermind claims the coins aren’t subject to civil forfeiture rules. His lawyer, Joshua Dratel, said the civil forfeiture action has been stayed pending the outcome of the criminal case.

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I suspect from the lot size that these guys didn't consult any marketing, trading, or finance people beforehand. Large positions must be unwound...not lopped off in giant chunks.
 
I'm wondering if the starting price is going to be their current value. If it was a dollar a bitcoin, I would be all over that but I know that is unrealistic XD
 
They should auction his personal stash as well, he isn't exactly going to be needing them where he's going, at least I hope so.
 
I have a feeling they will convict him then sell his personal stash. The problem however is the sudden release of a total of 173,997 bitcoins onto the market and the sharp nosedive its price will take as a result.

Granted the feds are used to printing money whenever they feel like it with no regard for inflation. And I'm sure they already have plans to give that money to another country instead of fixing our problems here.
 
I have a feeling they will convict him then sell his personal stash. The problem however is the sudden release of a total of 173,997 bitcoins onto the market and the sharp nosedive its price will take as a result.

Which is why they should be selling off the position in smaller chunks. Fast, large liquidation = price dives; slow, deliberate liquidation = $$$$.

Granted the feds are used to printing money whenever they feel like it with no regard for inflation. And I'm sure they already have plans to give that money to another country instead of fixing our problems here.

Technically, California is still part of the United States.
 
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