The U.S. government is now planning to sell BitCoins!
What’s the catch?
Well according to the U.S. Marshals Service website, the service will be holding a one-day auction on June 27th to re-sell almost 30k bitcoins. The same bitcoins that were seized from the Silk Road servers, which stored wallet files.
The exact sum figure being 29,656.51306529 bitcoins. They won’t be sold as a lump sum, but instead will be sold separately in blocks of ~3,000 starting June 16th.
As of Sunday, the charts place BTC’s value at around $580 USD.
Assuming the current value does not drop, one block of 3,000 BTC will be worth around 1.74 million dollars. The total net of all the blocks coming out to 17.2 million dollars and accounting for 0.23% of crypto coins in circulation.
Regardless, Bitcoin’s price fell below $600 as the commonly volatile prices are no surprise to Bitcoin enthusiasts. It is speculated, that the recent depreciation can be attributed to shifting viewpoints for what the USMS Bitcoin auction may mean for Bitcoin’s long-term growth. Since the Reddit Bitcoin community is already filled with panic, only time will tell.
The USMS site states the following, making it explicitly clear that these coins are not from DPR’s personal belongings, but rather Silk Road servers:
THIS AUCTION IS FOR THE BITCOINS CONTAINED IN WALLET FILES THAT RESIDED ON SILK ROAD SERVERS, INCLUDING THE SERVERS ASSIGNED THE FOLLOWING INTERNET PROTOCOL ADDRESSES: 22.214.171.124; 126.96.36.199; 188.8.131.52; 184.108.40.206; 220.127.116.11; AND 18.104.22.168 (“SILKROAD SEIZED COINS”).
THIS AUCTION DOES NOT INCLUDE THE BITCOINS CONTAINED IN WALLET FILES THAT RESIDED ON CERTAIN COMPUTER HARDWARE BELONGING TO ROSS WILLIAM ULBRICHT, THAT WERE SEIZED ON OR ABOUT OCTOBER 24, 2013 (“DPR SEIZED COINS”).
Nonetheless, the auction has some limitations and requirements.
- All bidders must register
- Provide a copy of a Government-issues photo ID
- Quite a large $200,000 USD deposit sent by wire transfer, originating from a bank within the United States
- The bid must be an all cash offer, no financing terms will be considered
- USMS reserves the right to reject any bid for any reason
This also leads one to speculate why they split the Bitcoins up into blocks, could it be just for flexible pricing? Or is it an ulterior motive to try to track the BTC that belong to those “blocks”; since they (USMS) are putting an ID on each block.
A dubious USMS notice states:
No bitcoin transfer will be made until the USMS has confirmed receipt of all purchase funds from the buyer. The USMS will not transfer bitcoins to an obscene public address, a public address apparently in a country restricted by the Office of Foreign Assets Control (OFAC), a public address apparently associated with terrorism, other criminal activities, or otherwise hostile to the United States.
For those who are quick to forget:
Silk Road was an online illegal drug, and hacking marketplace that used the anonymous crypto-currency dubbed “Bitcoins”.
The online marketplace offered drugs from heroin to LSD, weapons including semi-automatic assault rifles, ammunition, banking trojans, forged passports, social security cards and various other contraband.
Believed to be caught red handed in a San Francisco public library. Ulbricht was charged with an extensive list of crimes from illegal narcotics trafficking to hacking.
The winners of the auction will be notified on June 30th and will have until the next day to begin the wire transfer, or else they risk losing their $200,000 USD deposit.