US Marshals Will Sell 50,000 Silk Road’s Bitcoins

The American government announced it is going to auction 50,000 Bitcoins soon. This decision was taken after Ross Ulbricht was recently convicted for running the online black market dubbed “Silk Road”.

This will not be the first auction being conducted by the US marshals service: in relation to Silk Road, it is the 3rd auction for Bitcoins seized. The prosecutors claimed that the cryptocurrency seized allowed customers buy and sell drugs and other illegal products beneath the radar of law enforcement. Ross Ulbricht, 30, was found guilty a few weeks ago by a federal jury in Manhattan – of drugs and other charges, including helping to enable about $200 million of anonymous online drug sales using cryptocurrency.

According to prosecutors, Ross Ulbricht had been operating Silk Road market under the nickname “Dread Pirate Roberts” until FBI shut down the service in October 2013. In the court, Ross conceded that he did create Silk Road, but then handed it over to the third party and was not responsible for illegal activity conducted there.

US marshals service announced that 50,000 Bitcoins (an online virtual currency) would be offered in 10 blocks of 2,000, and 10 blocks of 3,000. All bidders are required to register for the 6-hour auction three day before the auction, and winners will be notified next day after the auction.

It must be noted that previous auctions could bring the US government more money, as Bitcoins have lost roughly 80% of the value since its peak closing high of $1,147.25 in December 2013. Such volatility is explained by Bitcoin’s decentralized nature and small trading volume. Now the value of one digital coin is about $230. The US government auctioned about 30,000 Bitcoins seized from Silk Road in June 2014, and 50,000 Bitcoins more in December – at the time of the auctions, Bitcoin rate was respectively about $601 and $369 per coin.

As for the site operator, he consented to the latest auction in connection with a civil forfeiture proceeding. Ross Ulbricht faces up to life in prison – he will be sentenced in the criminal case on 15 May.