ANNOUNCEMENT: Since the Silk Road 2.0 bust by the feds a few other Darknet Markets have fallen. Silk Road 3 is up and running with a big selection of goods.
Details of the bitcoin auction
The U.S. Marshals Service (USMS) will be auctioning off these bitcoins on Nov. 5, 2015. The auction will be held during a six hour period from 8 am to 2 pm EST. The total number of btc available in this auction will be approximately 44,341.
According to the USMS press release, the bitcoins will be auctioned off in 22 blocks, where 21 blocks will be of 2,000 BTC, while 1 block will be of approximately 2,341 BTC. All the winning bidders will be notified on Nov. 6, 2015.
Only cash offers will be accepted for this auction, which means any other type of payment such as bank transfer, credit card, etc. will be rejected. As always, all the bids will be accepted only from the pre-registered bidders.
How to register for the auction?
The registration period for the auction starts from Oct. 19, 2015 and will end on the noon of Nov. 2, 2015. Therefore, all the potential bidders must complete their registration requirements by that time.
All the documents that were submitted for registration of previous bitcoin auctions held by the USMS will not be considered valid for this auction, which means interested bidders will have to submit new registration documents if they wish to be considered for this auction.
Unfortunately, foreign investors are not allowed to directly register for this auction, as this auction is only open for the citizens of the United States. Therefore, any foreign investor will have to register through somebody who is working for them in the United States.
Furthermore, all the bidders will have to deposit an amount of $100,000 before the start of the auction. This step has been taken by the USMS to weed out any non-serious bidders. All the applicants who want to register for this auction will have to submit a photo ID issued by the U.S. government among other things.
Details of the previous auctions
Although the crackdown against the Silk Road was part of a joint operation between the U.S. Federal Bureau of Investigation (FBI) and the U.S. Secret Service, it was the U.S. Marshals Service that was given the charge of handling the seized goods from the Silk Road, which was mostly bitcoins. A total of approximately 174,000 BTC were confiscated at the time of seizure.
So far, the USMS has held a total of three auctions where most of the bitcoins seized from the Silk Road have been sold to the qualified members of the US public. The first auction of 30,000 BTC was held in June 2014, which attracted 45 bidders who made 63 bids. The Draper University founder and billionaire venture capitalist Tim Draper won this auction by shelling out an estimated $18 million at that time.
The second auction had 50,000 BTC on sale but it recorded a way lower turnout when compared to the first auction. It had only 11 bidders who made 27 bids. Most experts believed that the lower turnout was due to the declining value of bitcoin at that time. Incidentally, price of bitcoin was experiencing huge volatility in those days and was hovering between $360 and $370. Bitcoins in this auction were partially won by Tim Draper, alongside Second Market founder Barry Silbert.
The third auction was held in March 2015, in which another 50,000 BTC, worth $13.4 million, were sold to the highest bidder. Although there were 14 bidders who competed for the bitcoins in the third auction, almost 47,000 or 94% of the bitcoins were bought by the Cumberland Mining, a secretive bitcoin company.
Therefore, the coming auction to be held on Nov. 5, 2015 will be the fourth and final auction of the bitcoins seized from the Silk Road creator Ross Ulbricht. Authorities are hoping that a higher number of bidders will turnout for this auction as these are the last of the famous Silk Road bitcoins. This final auction will sell approximately 44,341 BTC worth more than $10 million based on present exchange rates.
History of the btc being sold in this auction
In Oct. 2013, the Silk Road mastermind Ross William Ulbricht was arrested by the U.S. authorities. A total of 144,000 BTC were seized from Ross Ulbricht’s laptop. Additionally, 29,655 BTC were held in wallets on the Silk Road at the time it was closed. This brought the total amount of bitcoins seized during the shutdown of the Silk Road to approximately 174,000 BTC.
On Jan. 27, 2015, the U.S. government and Ross Ulbricht agreed to the sale of the confiscated bitcoins during the trial. According to this agreement, Ross Ulbricht allowed the United States to sell any portion or all of the confiscated bitcoins. The manner of the sale of bitcoins was also left to be determined by the U.S. government.
Conviction and sentencing of Ross Ulbricht
Silk Road was the most famous online marketplace to buy and sell illegal narcotics and other banned products. After being arrested for operating Silk Road, Ross Ulbricht was charged with conspiracy to traffic narcotics, computer hacking, money laundering and attempting to kill six people. Although murder charges were later dropped from the indictment, Ross was convicted for all the other charges in connection with his ownership and operation of Silk Road on Feb. 2015.
Ulbricht was sentenced to life imprisonment of twenty years without the possibility of parole on May 29, 2015. He is imprisoned in the Metropolitan Detention Center, Brooklyn. He has also been ordered to a civil asset forfeiture of more than $183 million.
At the time of Ross Ulbricht’s arrest, the total bitcoins seized from him by the USMS was the largest single seizure of bitcoin ever. Although since the busting of the Silk Road several other darknet markets have fallen, the bitcoins seized from Ulbricht still remains with the USMS. However, this will come to an end on Nov. 5, 2015 when last batch of the famous Silk Road btc will be auctioned off to their highest bidders.