So That’s What The Feds Are Doing With Seized Bitcoins

Author

Lauren Orsini

November 20, 2014

What are the Feds doing with all that Bitcoin they seized from Silk Road last year? Auctioning it off to interested parties, as it turns out.

The US Marshals Service announced Monday that it’d be auctioning off 50,000 bitcoins, worth roughly $19 million, on Dec. 4. It is a silent auction, where potential bidders must submit their bids in advance with no prior knowledge of other bidders’ offers.

This is the US Marshals Service’s second Bitcoin auction, about five months after it first began to sell off the assets seized in last October’s Silk Road raid. (Last time, venture capitalist Tim Draper was the auction’s sole winner, taking home an amount of Bitcoin worth $19 million at the time.) This latest auction is for bitcoins the Feds found on a computer belonging to alleged Silk Road creator Ross Ulbricht. Ulbricht and prosecutors reached a deal in January that would allow these Bitcoins to be sold. 

See also: Former Bitcoin Exchange CEO Arrested In Silk Road Drug Trafficking Scheme

It’s a powerful reminder that, while Bitcoin may be a pseudonymous currency, there is nothing anonymous about it, and the Feds can find and charge any user they need to. Though the black market site Silk Road was located on the Dark Web and extremely covert, the Feds were able to find its creators by following the trail of the bitcoins exchanged.

There will be no concern, however, about tracing the bidders on these particular bitcoins up for auction. All bidders are required to register and prove their identities before being allowed to make an offer. They must also vow that they are not affiliated with Silk Road or its alleged creator in any way.

Photo by fdecomite on Flickr

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