updated 09:05 am EDT, Fri June 13, 2014
Bitcoin pool seized during Silk Road takedown expected to fetch over $17M
The United States Marshals Service will be selling off the collection of Bitcoin it seized following the take-down of black-market drug site Silk Road. Almost 30,000 Bitcoins will be sold in the online auction on June 27th, with the pool estimated at current exchange rate prices to be worth a total of $17.91 million at the time of writing, down from the $27 million it was originally expected to fetch during initial reports of the sale in January.
Details of the auction in the USMS notice show it is for serious investors in the cryptocurrency, according to information noticed by Ars Technica. Bidders are required to provide a registration form, a copy of government-issued photo ID, and a $200,000 deposit by June 26th. The USMS is also refusing to accept bids from those "acting on behalf of or in concert with the Silk Road and/or Ross William Ulbricht," the site's owner.
The auction will consist of ten blocks of Bitcoins, with nine blocks of 3,000 and one of 2,656.51. More Bitcoins were involved in the take-down, with the amount being sold being Bitcoin quantities contained "in wallet files that resided on Silk Road servers." It does not include Bitcoins in wallet files stored on hardware belonging to Ulbricht, even though these funds were also seized at the same time.
Silk Road was closed in October last year, with Ulbricht charged with a variety of offenses, including narcotics trafficking conspiracy, computer hacking conspiracy, and money laundering conspiracy. Between February 2011 and July 2013, Silk Road is estimated to have generated more than $1.2 billion in business, leading the site into far darker territory than drug sales. The FBI accused Ulbricht of participating in a murder-for-hire scheme, offering the Bitcoin equivalent of $150,000 to murder a Silk Road user attempting to extort $500,000 from the site with the threat of exposing other Silk Road users, though this was left off the complaint due to a lack of connecting evidence.