U.S. Marshals Conducted 3rd Auction for Selling 50,000 Bitcoins From Silk Road

The U.S. Marshals Service put a set of 50,000 bitcoins, seized from the Silk Road, on sale.

Photo: Nate_892/Flickr

Photo: Nate_892/Flickr

The U.S. Marshals Service has organized an auction for another set of bitcoins confiscated from the Silk Road marketplace. This time, the agency will auction off 50,000 bitcoins, worth $13.5 million.

The auction started on Thursday morning and lasted for six hours. The winners will be announced on Friday, March 6th, 2015.

All the 50,000 bitcoins were divided in 20 blocks: 10 blocks of 3,000 bitcoins and 10 blocks of 2,000 bitcoins. Participants will not be able to see other bids and will not be able to change the bid after it is submitted.

Like in previous auctions, those who had any connections to Ulbricht or the Silk Road will not be allowed to take part in the auction.

The Marshals Service has already conducted two auctions last year, the first in June and the second in December. The agency auctioned off 29,655 and 50,000 bitcoins, respectively.

To participate in this auction, the bidders must prove their identities and show they have enough money to make a deposit before placing a bid.

Silk Road was an underground online trading platform, which accepted digital currency for illegal items, such as guns and drugs. The marketplace was closed in 2013, following a raid by the Marshals Service and an arrest of its founder Ross Ulbricht.

In total, about 80,000 bitcoins were seized from the servers of the online platform. Ulbricht, 30, was charged with engaging in narcotics conspiracy, money laundering, computer hacking and operating a criminal enterprise. He faces 20 years to life in prison and if his appeal doesn’t go through, he will be sentenced on May 15, 2015.

VC investor Tim Draper told Reuters he would participate in the auction. “Probably the best deal anyone will get,” he said.

Notably, Draper managed to become the sole winning bidder of the first auction in June, while in December he also obtained bitcoins, amounting to 2,000. At the time, he projected to invest the money in bitcoin startups, accelerated by Boost, an investment firm opened by his son, Adam Draper.

The other 48,000 bitcoins were taken by Barry Silbert, the founder of SecondMarket. According to the entrepreneur, he is going to take part in the auction this year, although he has not yet created a syndicate for sale. Pantera Capital investment fund, established by Dan Morehead, is also participating.

The price of bitcoin, which was around $600 at the last auction, now is just about $270.

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