US Government to Auction $18M Worth of Silk Road Bitcoins

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US Government to Auction $18M Worth of Silk Road Bitcoins

The federal government intends to put $18 million worth of digital currency to an auction later this month with a view to generating cash.

The 29,000 bitcoins up for auction were taken from the Silk Road site. The little known website facilitated payments for illegal trade including sale of drugs and other contraband. The US Marshals Service will oversee the auction.

Bitcoins are virtual currencies under no regulation and lack support of gold, silver or any other commodity, according to USA Today.

“The U.S. Marshals are preparing to auction nearly 30,000 bitcoins in connection with a civil forfeiture and criminal action brought against Ross Ulbricht and the assets of Silk Road in October 2013 in federal court in the Southern District of New York,” a section of the Press Release from US Marshals read.

Since bitcoin is virtual currency, authorities will be auctioning sets of numbers that are held online in a public ledger. The auction is scheduled for June 27.

The bitcoins will be split into blocks of 3,000, each worth around $1.8 million. The sale will be spread over a period of 12 hours.

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There is still controversy around another 144,000 bitcoins that were held by Ross Ulbricht, the founder and operator of Silk Road.

Federal agents put Ulbricht behind bars on October 1 last year.

He was charged with offenses related to gaining illegal access to computer systems, drug trafficking and money laundering. Ulbricht is still custody without bail. He faces a separate charge in Maryland regarding a murder-for-hire plan.

Court papers showed that the Risk Road business had close to 1 million customers and $1.2 billion worth of sales. It’s reported that Ulbricht earned as much as $80 million in commission.

According to Bloomberg, the price of bitcoin dropped on the news.  Bitcoin traders might be trying to ensure authorities don’t make much from the sale.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com

 

 

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Deepak Tiwari, a law graduate, has been working as a journalist for six years now. He currently writes on Bitcoin, economic, and Forex related news at ForexMinute, the brand new financial news portal which is making waves among Forex traders around the globe for the innumerable Forex resources it offers for readers, traders and brokers. His other specialties include writing on law & governance, finance, internet marketing, careers, politics, international relations & diplomacy, etc.