US auctions off 50,000 bitcoins worth $18.6m after Silk Road closure

U.S. Marshals began auctioning off 50,000 bitcoins on Thursday, the ones seized during the prosecution of the alleged owner of Silk Road, an Internet black-market bazaar where authorities say drugs and other illegal goods could be bought. The six-hour online auction was for around $18.6 million worth of bitcoins. As part of a civil forfeiture proceeding, alleged site founder Ross Ulbricht and the government reached a deal in January in which the bitcoins on his hardware would be sold and the proceeds held, pending the outcome of his case. The remaining bitcoins from Ulbricht’s hardware will be auctioned in the coming months.

My expectation is that most bids will be aggressively to the downside in the hope of getting a post-Black Friday bargain.

Stephen Englander, global head of G10 foreign exchange strategy at CitiFX

The previous set of 29,655 bitcoins, which were recovered from Silk Road’s servers, were won at auction by a single bidder, Silicon Valley venture capitalist Tim Draper. Draper said on Wednesday he would be among the bidders participating in the auction. Others who have said they will bid in the auction include the Bitcoin Investment Trust and Pantera Capital. Ulbricht, known online as “Dread Pirate Roberts,” according to prosecutors, faces trial January 5 on charges including conspiracy and narcotics trafficking. He has pleaded not guilty. Bitcoin prices were down 0.96 per cent early Thursday at $371.37 each.