The U.S. Marshals Service is back into auctioning bitcoins following the agency's seizure of 50,000 bitcoins during the prosecution of Ross Ulbricht, allegedly the owner of Silk Road. Registration has begun on Nov. 17 and shall end on Dec. 1. The online auction for the seized bitcoins is scheduled on Dec. 4.
Silk Road is an Internet black market retail company that sells illegal drugs and other goods. It has almost 1 million anonymous users who could make all sorts of drug-related transactions through the Tor browser. Purchases are typically made using bitcoins and sales can reach more than $1 billion.
The site was shut down by the authorities in October 2013 wherein Ulbricht was arrested and charged with selling $1.2 billion worth of ecstasy, cocaine, heroin and other illegal drugs. He now faces a minimum of 30 years to stay in prison and could be given the maximum sentence of life in prison if found guilty. The trial of his case is set to begin on Jan. 5.
Ulbricht enters a plea of not guilty. One month following his arrest, a new Internet drugs portal known as Silk Road 2.0 appeared over the Internet. Eventually, the site was shut down by the FBI on Nov. 5. Moreover, the officials arrested Blake Benthall who is allegedly the site's founder.
The bitcoins which are scheduled for an auction on Dec. 4 are said to have a total value of almost $19.8 million. Bitcoin is a digital currency that was launched in 2009. Its value is determined through market supply and demand. The latest trading value of a bitcoin reached almost $400 on Monday.
The auction, which is the second one organized by the agency, shall be divided into two rounds. The first round will allow people to bid on 10 blocks of 2,000 bitcoins. The second round will accept bids for another 10 blocks of 3,000 bitcoins. Those who have preregistered and have deposited $100,000 will be given a 6-hour window on Dec. 4 to accomplish sealed bids on rounds where they have a registration to bid.
Similar to the first auction, bidders must reveal their identity and disclose any connection that they may have with Ulbricht or the Silk Road.
It should be noted that when the agency held the first auction in June, it erroneously leaked the names of more than a dozen people who were interested in bidding. While the U.S. Marshals Service had promised to keep the bidders' identities a secret, it had unintentionally cc'd an email list to interested bidders instead of sending a bcc email.
The winning bidder of the auction will be announced Dec. 5. Payment is then required to be accomplished on Dec. 8.
