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US To Auction $1.6 Million Worth of Bitcoin From Various Cases (reuters.com)

Posted by msmash on from the tread-carefully dept.

An anonymous reader shares a Reuters report: The U.S. government said on Monday it plans to auction over 2,700 bitcoin that were forfeited during several cases, including the prosecution of the creator of the online black market known as Silk Road. The U.S. Marshals Service said that the online auction would be held on Aug. 22, and that potential bidders must register by Aug. 18. The bitcoin are worth about $1.6 million, according to the Bitstamp exchange. The auction is the latest by the Marshals Service of the digital currency. It completed four prior auctions from June 2014 to November 2015 of bitcoin seized during the prosecution of Ross Ulbricht, who authorities say ran Silk Road.

14 of 67 comments (clear)

  1. Auction of bitcoin? by clodney · · Score: 2

    I suppose bitcoin is not technically currency, but it still seems kind of pointless to auction off bitcoins . Imagine if the headline were "Feds to auction off $1.6M in forfeited cash". You would expect the auction price to be very, very close to 1.6M. The arbitrage on bitcoins may be such that it comes in slightly less than 1.6M, but not much.

    1. Re:Auction of bitcoin? by 110010001000 · · Score: 4, Interesting

      Um, no. Due to the fluctuation of Bitcoin and the extended settlement time of Federal auctions you wouldn't be very smart to bid over 60-70% of value.

    2. Re:Auction of bitcoin? by Luthair · · Score: 2, Interesting

      Which seems like further reason for the Feds to liquidate it themselves rather than auctioning it off. Probably some arcane part of the law I guess, or just stupid bureaucracy.

    3. Re: Auction of bitcoin? by 110010001000 · · Score: 5, Funny

      Which exchange do they choose? The one who will give them the best exchange rate? How would they determine who would give them the best deal? Maybe they could setup an auction. Plus maybe they could open up the auction to everyone, not just a few exchanges. They could call them "Federal Property Auctions".

    4. Re: Auction of bitcoin? by Anonymous Coward · · Score: 2, Insightful

      But what if you miss an individual who is willing to pay a little more for what you have?

      The point of having the auction is that any interested party can participate, not just those sampled. The reason the government uses auctions to sell unwanted property is because they get the most return. It works very well.

      Stop trying to make it sound like auctions are stealing away from us, when they're doing the exact opposite.

    5. Re:Auction of bitcoin? by prograsm · · Score: 2

      Having purchased government surplus vehicles at auction, this is something any potential bidders would be wise to take note of. It can take 6 months for the government to deliver, despite collecting money immediately.

  2. Who would buy? by scorp1us · · Score: 5, Insightful

    This transfer would kill any pseudo-anonymity in the blockchain. Coins assigned to feds, Feds assigned to you, then can come back and lean on you to account for who you transferred coins to... Opening the question, does a bitcoin's market value depend on who owned it previously?

    --
    Slashdot's rate-of-post filter: Preventing you from posting too many great ideas at once.
    1. Re:Who would buy? by Archangel+Michael · · Score: 4, Interesting

      Coin Washing service would quickly dissolve any link to you. Which is exactly what I would do. Once the Coins are disassociated with any person, they are useless.

      --
      Agent K: A *person* is smart. People are dumb, stupid, panicky animals, and you know it.
    2. Re:Who would buy? by Joe_Dragon · · Score: 3, Funny

      with a free trip to a FPITA prison

    3. Re:Who would buy? by GLMDesigns · · Score: 4, Insightful

      This doesn't make any sense whatsover. The federal government can "buy" and "sell" BTC under aliases and do the same thing, Complete anonymity is one of the things that people desire in a cryptocurrency but it is not essential. Second there is more to anonymity then prevent government agencies from tracking you down, Some folks just like privacy and find Facebook and Google and others intrusive. Bitcoin pseudo-anonymity works quite well under those circumstances.

      The lock on my front door does a good job keeping knuckleheads away but if the US Government wanted to break into my apartment it would be useless to prevent them. That being the case should I stop locking my door when I leave the apartment because it isn't useful against the government actors?

      --
      If you're scared of your govt then you need to further restrict its powers
      Vote 3rd Party in 2016 and beyond
    4. Re: Who would buy? by Anonymous Coward · · Score: 2, Insightful

      Dollars are anonymous, Bitcoin has a history tired directly to it (block chain). Though, if you have very good history and documentation of a particular dollar bill that Elvis Presley used to purchase a hamburger with (ie: a picture of him holding said dollar with visible serial numbers), that'd be collectible too.

      With Bitcoin, that history is automatic and permanent.

  3. Not sure what to make of this. by Anonymous Coward · · Score: 5, Funny

    So I will reply with a haiku.

    Federal Auction?
    Or gigantic honeypot?
    Caveat Emptor.

  4. Re:1.6 Million by GLMDesigns · · Score: 3, Insightful

    Sorry but you're not making any sense. There are almost 1,000,000 transaction every 10 minutes.

    Bitcoin's market value is approximately 10 billion dollars. This is not going to affect the price much. And "destroying" the coin won't make bitcoin any less valuable. Just as destroying gold doesn't make the remaining gold left valuable.

    Can government stop bitcoin? Yes. By imprisoning and killing people who use it. Outside of that - it will be very difficult (if not impossible).

    --
    If you're scared of your govt then you need to further restrict its powers
    Vote 3rd Party in 2016 and beyond
  5. each block requires 100k registration to bid by anniversary · · Score: 2

    https://www.usmarshals.gov/ass...