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The US Marshals Service announced Monday it will auction 50,000 bitcoins, worth about $20 million, seized last year from accused Silk Road operator Ross Ulbricht.
The auction, the second conducted by the agency in the past five months, will be held on December 4. The Marshals Service’s first auction in June resulted in the sale of 29,656 bitcoins that the government seized along with the defunct online drug market last fall. Tim Draper, a prominent investor in Silicon Valley, was later identified as the winning bidder of the entire lot.
The bitcoins in the latest auction were seized in October 2013 from digital wallets residing on computers belonging to Ross Ulbricht, the online drug market’s alleged mastermind. Ulbricht, who was arrested by the FBI at the same time, agreed in January that the US government could sell the bitcoins.
The auction will be split into two rounds, with 10 blocks of 2,000 bitcoins being offered in the first round and another 10 blocks of 3,000 bitcoins in the second. Bidders who have preregistered and made deposits of $100,000 will have a six-hour window on December 4 to submit sealed bids on rounds for which they have registered to bid.
Like in the first auction, prospective bidders must disclose their identity and any connection they have to Ulbricht or Silk Road. Registration to bid began Monday and ends December 1.
Identification proved a sticky situation during the agency’s first auction in June. The Marshals Service, which had promised to keep secret the identities of bidders and winners alike, mistakenly leaked the names of more than a dozen people interested in bidding in the auction. A spokeswoman for the US Marshals Service told CNET at the time that the agency intended to send a bcc email to interested bidders and unintentionally cc’d the list instead.
Although only recipient email addresses were disclosed, many of those email addresses contained the names of people — as some email addresses do. Several high-level investors and people within the Bitcoin community were reportedly on the list.
Silk Road was an online drug marketplace where its nearly 1 million anonymous users could buy and sell all sorts of drugs using the secure Tor browser. The purchases were typically made with Bitcoin and sales are said to have totaled more than $1 billion.
Ulbricht, 30, has been charged with narcotics trafficking, computer hacking, and money laundering. He faces a minimum of 30 years in prison and a possible maximum sentence of life in prison if convicted. His trial is scheduled to begin on January 5.
