U.S. Announces Third Bitcoin 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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