The Feds Set Their Fifth Bitcoin Auction; Expect More in the Future

By Jim Daly
@DTPaymentNews

The notion of the federal government auctioning off Bitcoin seized in drug busts and other actions looks like it’s an idea with some staying power. The U.S. Marshals Service on Monday scheduled yet another auction of the virtual currency in the wake of the four it conducted in 2014 and 2015 to sell Bitcoin seized from the now-convicted Ross Ulbricht, operator of the notorious Silk Road online underground market where Bitcoin was the medium of exchange.

In this fifth auction, however, the origin of the 2,719.33 Bitcoin to be sold Aug. 22 is much more diverse, coming through asset forfeitures from eight criminal, civil, and administrative cases. Bitcoin seized in four cases brought by U.S. Customs and Border Protection, a unit of the Department of Homeland Security, also will be sold.

The biggest source is 1,294 Bitcoin seized in a California drug case with links to Silk Road, which the FBI busted in late 2013. A couple of scraps from the Ulbricht case, 2.8 Bitcoin, also are included.

In all, the Bitcoin were worth $1.61 million at Monday’s late-afternoon price of $592.16 for one unit of the virtual currency, according to Bitcoin information service CoinDesk.

Asked if the Marshals Service plans more Bitcoin sales going forward, a spokesperson told Digital Transactions News by email that “yes, we anticipate doing so.”

The Marshals Service began bidder registration for the upcoming auction Monday. Bidders must put down $100,000 to participate in the six-hour online sale. In previous auctions, the virtual currency was sold in blocks, but this time plans call for it to be sold as one block.

There were four winning bidders in the fourth Bitcoin auction last Nov. 5. Some 44,000 Bitcoins valued at more than $14 million at the time were sold. The Marshals Service did not identify the winning bidders, but one was the Bitcoin exchange itBit, which secured five blocks totaling at least 10,000 Bitcoins.