US Marshals: Latest Bitcoin Auction Timed To Avoid Market Disruption

By November 17, 2014 Bitcoin Entertainment
Click here to view original web page at www.coindesk.com
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The US Marshals Service (USMS) has revealed it intends to auction potentially all of the 144,000 BTC confiscated from Ross Ulbricht during its Silk Road investigation in the coming months, but that it has elected to break up the sales in order to prevent disruptions to the bitcoin market.

The USMS announced on 17th November that it will auction off just 50,000 BTC previously owned by Ulbricht, who stands accused of operating the now-defunct Silk Road online black marketplace. The bidding registration for this auction, which is currently underway, will be open to interested parties until 1st December.

USMS spokesperson Lynzey Donahue told CoinDesk that the USMS intends to hold additional auctions for the remainder of Ulbricht's bitcoin holdings in the months ahead, but that it has yet to set dates for any subsequent sales. When asked, Donahue acknowledged that the auctions were being held over an undisclosed period of time to avoid potential market problems.

Donahue said:

“We didn’t want to flood the market with the sale of too many bitcoins at any one time."

The agency confirmed that the auction process will be the same as the one held in July, when nearly 30,000 BTC was ultimately sold to Draper Fisher Jurvetson founding partner and noted bitcoin investor Tim Draper. Unlike the upcoming auction, those bitcoins were confiscated directly from the Silk Road servers, not from Ulbricht himself.

The USMS also noted that significant changes in the price of bitcoin that have taken place in recent months did not factor into the agency’s decision to hold the auction.

The price of bitcoin has declined from roughly $650 at the time of the initial auction in July to a press time figure of $384.

Past auction participants weighing new round

CoinDesk reached out to a number of venture capitalists and investors who submitted bids in the July auction, including eventual winner Tim Draper. Overall, it seems that while some participants are looking to take part, others are still weighing the announcement.

Harry Yeh, founding partner at bitcoin-focused investment firm Binary Capital, said that that his fund will be submitting a bid. Binary took part in the last auction and, at the time, Yeh noted that such events present a unique opportunity for financial firms to acquire large quantities of bitcoin without the added costs that can come from buying over an exchange or off market.

Bitcoin entrepreneur and Digital Currency Group founder Barry Silbert said that his team is looking at the new auction and “evaluating running another bidding syndicate".

Image via Shutterstock

Ross UlbrichtSilk RoadUS Marshals Service

The USMS announced on 17th November that it will auction off just  50,000 BTC previously owned by Ulbricht, who stands accused of operating the now-defunct Silk Road online black […]

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