U.S. Marshals to Auction 50,000 Bitcoins Seized from Silk Road’s Ross Ulbricht

USMS (the U.S. Marshals Service) announced that it will auction off 50,000 Bitcoin belonging to Ross Ulbricht, the alleged mastermind of the original Silk Road.

Prosecutors and Ross Ulbricht, alleged owner of online drug bazaar Silk Road, agreed in January 2014 that the U.S. government could sell the Bitcoins it had seized from his computer. Photo: BitCoin Opp/Flickr

Prosecutors and Ross Ulbricht, alleged owner of online drug bazaar Silk Road, agreed in January 2014 that the U.S. government could sell the Bitcoins it had seized from his computer. Photo: BitCoin Opp/Flickr

The United States Marshals Service has recently announced that it will auction 50,000 bitcoins seized last year from accused Silk Road operator Ross Ulbricht.

The auction is scheduled for December 4 and comes about five months after the Marshals Service’s first Bitcoin auction in June, when it sold 29,656 bitcoins of those seized from Silk Road, which was shut down in October 2013 after authorities said it was online marketplace for illegal drugs and other illicit activities.

Silk Road was an online drug marketplace where its anonymous users could buy and sell all sorts of drugs. The purchases were made via digital currency and sales have totaled more than $1 billion.

Ross Ulbricht has been charged with narcotics trafficking, computer hacking, and money laundering. He faces a minimum of 30 years in prison and a possible maximum sentence of life in prison. His trial has been postponed until January.

In general, the auction was regarded as a success, attracting the attention of a number of prominent technology personalities, including Barry Silbert of SecondMarket, Pantera Bitcoin and Coinbase. The venture capitalist Tim Draper was the auction’s sole winner and got Bitcoin worth about $19 million at that time.

Before the auction, analysts and investors considered that auctioning such a large amount of bitcoin, which illustrated a considerable percentage of the average daily trading volume, would push the price of the bitcoin down.

The latest auction is for bitcoins found on computer hardware belonging to Ross Ulbricht, who is accused of creating Silk Road, the online drug market. Prosecutors and Ulbricht agreed in January that the US government could sell the virtual currency it had seized.

Bidders will have a six-hour window on December 4 to submit a sealed bid for the bitcoins, which have been broken into multiple lots. The first series contains ten blocks of 2,000 Bitcoins, while the second one contains ten blocks of 3,000 Bitcoins.

Bidders can be engaged in both series and can bid on numerous blocks. Bidders must disclose their identity and any connection they have to Ulbricht or Silk Road. Registration to bid began this Monday at 9 a.m. and ends at noon on December 1.

During the agency’s first auction in June, the Marshals Service, which had promised not to publish the identities of bidders and winners, mistakenly revealed the names of more than a dozen people interested in bidding in the auction. A spokesperson for the US Marshals Service told that the agency aimed to send a bcc email to interested bidders and accidentally cc’d the list instead.

Although only recipient email addresses were leaked, many of those email addresses contained the names of people. Multiple high-level investors and representatives of the Bitcoin community were reportedly on the list.

The government’s auctions represent only a small fragment of the total amount of bitcoin seized from Silk Road. Including 144,336 bitcoin found on computer hardware belonging to Ulbricht, the government has restored 173,991 bitcoins.

Lynzey Donahue, a spokesperson for the agency, said that the Marshals Service anticipated selling the remaining Bitcoins “in the coming months,” but “no exact dates have been determined.”

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