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US Marshals auctioning $20M worth of Silk Road’s Bitcoins

Nov 18, 20143 mins

Second multi-million dollar auction of Bitcoins from Silk Road closing

Credit: Reuters

The US Marshals office this week said it would auction off almost 50,000 or about $20 million worth of alleged Silk Road creator Robert Ulbricht’s Bitcoins.

The auction, which is the second sale of Silk Road’s Bitcoin collection, will take place during a 6-hour period on Dec. 4 from 8:00 a.m. until 2:00 p.m. EST. Bids will be accepted by email from pre-registered bidders only, the US Marshall’s office stated. In June a more than $17 million in Bitcoins seized from the Silk Road take-down was auctioned off.

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 “To register, potential bidders must complete all registration requirements by noon EST Dec. 1. Registration documents that were submitted for the Marshals’ June Bitcoin auction are not valid for this auction. Interested bidders must submit new registration documents to be considered for this auction. The 50,000 bitcoins are offered in 20 blocks: 10 blocks of 2,000 bitcoins and 10 blocks of 3,000 bitcoins. The winning bidder(s) will be notified on Dec. 5,” the US Marshals stated.

 Bidders will also have to verify that they have not been associated with Ulbricht or Silk Road in the past.

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 The United States and Ulbricht agreed to the sale of these Bitcoins, which was approved by a court order in U.S. District Court for the Southern District of New York on Jan. 27, 2014, the Marshals office stated.

 According to a New York Times article: The government’s auctions represent only a small fraction of the total amount of Bitcoin seized in connection with Silk Road. Including 144,336 Bitcoin found on computer hardware belonging to Ulbricht, the government has recovered 173,991 Bitcoins. A spokeswoman for the Marshals Service, Lynzey Donahue, said in an email that the agency anticipated selling the remaining Bitcoins “in the coming months,” but that “no exact dates have been determined.”

 According to FBI allegations Ulbricht created Silk Road in approximately January 2011 and owned and operated the underground website until it was shut down by law enforcement authorities in October 2013.

“Silk Road emerged as the most sophisticated and extensive criminal marketplace on the Internet, serving as a sprawling black market bazaar where unlawful goods and services, including illegal drugs of virtually all varieties, were bought and sold regularly by the site’s users. While in operation, Silk Road was used by several thousand drug dealers and other unlawful vendors to distribute hundreds of kilograms of illegal drugs and other unlawful goods and services to well over a hundred thousand buyers and to launder hundreds of millions of dollars deriving from these unlawful transactions,” the FBI stated.

In addition the agency stated, Ulbricht designed Silk Road to include a Bitcoin-based payment system that served to facilitate the illegal commerce conducted on the site, including by concealing the identities and locations of the users transmitting and receiving funds through the site.

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