The United States
Marshals Service announced on Wednesday that it would auction 50,000
Bitcoins, worth nearly $12 million, seized in connection with the online
marketplace Silk Road.
The Bitcoin auction,
to be held on March 5, comes more than two months after the service’s
second Bitcoin auction in December, when it also sold 50,000 Bitcoins.
The latest auction is
for Bitcoins seized from the computer hardware belonging to Ross
Ulbricht, who was convicted in Federal District Court in Manhattan this
month on charges related to the operation and ownership of Silk Road.
The website was shut down in October 2013 after the authorities said it
was online bazaar for illegal drugs and other illicit activities.
The timing of the
latest auction comes as investors and even Bitcoin enthusiasts are
questioning whether the virtual currency is a desirable investment. In
the last year, Bitcoin’s price has slid, from a high of around $1,150 at
the end of 2013 to about $235 on Wednesday afternoon. At the time of
the second auction, Bitcoin was trading at about $370. The service said
11 registered bidders took part in its December auction.
The United States
Marshals Service announced on Wednesday that it would auction 50,000
Bitcoins, worth nearly $12 million, seized in connection with the online
marketplace Silk Road.
The Bitcoin auction,
to be held on March 5, comes more than two months after the service’s
second Bitcoin auction in December, when it also sold 50,000 Bitcoins.
The latest auction is
for Bitcoins seized from the computer hardware belonging to Ross
Ulbricht, who was convicted in Federal District Court in Manhattan this
month on charges related to the operation and ownership of Silk Road.
The website was shut down in October 2013 after the authorities said it
was online bazaar for illegal drugs and other illicit activities.
The timing of the
latest auction comes as investors and even Bitcoin enthusiasts are
questioning whether the virtual currency is a desirable investment. In
the last year, Bitcoin’s price has slid, from a high of around $1,150 at
the end of 2013 to about $235 on Wednesday afternoon. At the time of
the second auction, Bitcoin was trading at about $370. The service said
11 registered bidders took part in its December auction.
.
Bidders in the third
Bitcoin auction will have a six-hour period on March 5, from 8 a.m. to 2
p.m., to submit sealed bids for the coins, which have been broken into
several lots. The first series contains 10 blocks of 2,000 Bitcoins,
while the second series contains 10 blocks of 3,000 Bitcoins. Bidders
can participate in both series and can bid on multiple blocks.
Registration for
interested parties to participate in the auction was scheduled to began
on Tuesday at 9 a.m., but federal offices in Washington were closed for
weather-related reasons, said Lynzey Donahue, a spokeswoman for the
Marshals Service. The registration period, which began instead on
Wednesday, will end at noon on March 2. The Marshals Service will notify
eligible bidders on March 3, with the winner, or winners, notified on
March 6.
To be eligible to
participate in the auction, bidders must prove their identities and show
that they have a required amount in cash. They also have to certify
that they are not affiliated with Silk Road or Mr. Ulbricht.
Including 144,336
Bitcoins found on computer hardware belonging to Mr. Ulbricht, the
government has recovered 173,991 Bitcoins. After the auction next month,
the Marshals Service will have sold about 130,000 Bitcoins.
SecondMarket, an
upstart exchange based in New York, nearly swept the government’s
Bitcoin auction in December, winning 48,000 of the 50,000 Bitcoins for
sale. The venture capitalist Timothy C. Draper, who won all of the
nearly 30,000 Bitcoins in the government’s first auction in June, won
the remaining 2,000 Bitcoins in the second.
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