A US venture capitalist has won a US government auction to buy up a horde of bitcoins seized by law enforcement when closing down the clandestine trading site SilkRoad, federal authorities announced Thursday. The government posted the 30,000 bitcoins June 26 for sale and received 63 bids, The New York Times reported. The FBI shut down SilkRoad.com in October 2013, accusing its operators of drug trafficking, computer hacking and money laundering.
The seized bitcoins are valued at around 19 million dollars on Thursday, according to their market price, but it is unknown how much was paid by the successful bidder, venture capitalist Tim Draper. Draper won the auction in conjunction with bitcoin exchange Vaurum. Draper said he would use the bitcoins to promote the use of the digital currency as a development tool in places such as Latin America and parts of Asia. "Bitcoin frees people from trying to operate in a modern market economy with weak currencies," he said. "With the help of Vaurum and this newly purchased bitcoin, we expect to be able to create new services that can provide liquidity and confidence to markets that have been hamstrung by weak currencies," cites dpa. US to auction 30,000 bitcoins seized in raid on Silk Road market, The US government is preparing to auction off roughly 30,000 bitcoins appropriated from the Silk Road online black market. The virtual bitcoins to be auctioned off were seized from the Silk Road website last fall. The anonymous website was a major sales point for illegal drugs and other underground goods. The US Marshals Service posted an announcement of the auction on Thursday. Bitcoins are an unregulated online currency that are not backed by gold, silver or any other commodity. Authorities say Silk Road generated more than $1 billion in illicit business from January 2011 to October 2013, when alleged operator Ross William Ulbricht was arrested in a public library in San Francisco. Ulbricht has pleaded not guilty. The website took commissions in bitcoins, which are hard to track. The marshals are auctioning off 29,657 bitcoins in 10 blocks, which means buyers will need to pony up nearly $1.8 million each. The Marshals Service is keeping another 144,342 bitcoins, worth about $87 million at current rates, that were found on Ulbricht's computer. He's contesting their forfeiture. Nine months on the US Marshals service - the body tasked with selling off the seized assets – is preparing to auction 30,000 bitcoins of the Silk Road stash. "This auction is for the bitcoin contained in wallet files that resided on Silk Road servers," the US Marshals Service wrote in a press release. "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." After the Marshals' announcement of the auction, the value of bitcoin dropped by around two percent, reflecting market anxiety. The government's decision to sell off the bitcoins could cause a significant shake-up on the cryptocurrency market. Many worry that if Ulbricht's larger stash of 144,000 is sold in the same auction style as the Silk Road asset, the market will be flooded with cheap coins which will lower the value of the currency. Source: The Voice Of Russia
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