U.S. holds final auction of bitcoins from Silk Road case
By Nate Raymond and Gertrude Chavez-Dreyfuss NEW YORK (Reuters) - The U.S. government on Thursday held its final auction of bitcoins seized during the prosecution of the creator of Silk Road, an online black market where the virtual currency could be used to buy illegal drugs and other goods. The U.S. Marshals Service said a six-hour online auction it held for about 44,341 bitcoins worth more than $17.2 million drew 11 registered bidders and 30 bids. No further details will be released until the bitcoins have been transferred to any winners, which could occur by Monday, said Lynzey Donahue, a Marshals Service spokeswoman. The bitcoins in the auction are the last remaining in custody in connection with the federal prosecution of Ross Ulbricht, who authorities say ran Silk Road. Silk Road operated for more than two years, generating more than $214 million in sales of drugs and other illicit goods using bitcoins, before being shut down in October 2013, prosecutors said. Bitcoins are used as a vehicle for moving money around the world quickly and anonymously via the Web without the need for third-party verification. The Marshals Service conducted auctions in June and December 2014 for nearly 80,000 bitcoins seized during the raid of Silk Road, and one this past March for 50,000 bitcoins. Thursday's auction includes 21 blocks of 2,000 bitcoins and one block of over 2,341 bitcoins. Winners will be notified Friday. Among those who said they planned to participate in the auction was Genesis Global Trading, a subsidiary of Digital Currency Group (DCG), according to Barry Silbert, a prominent bitcoin investor and DCG founder and chief executive officer. DCG, a holding firm focused on investing and developing businesses that deal in bitcoin and other cryptocurrencies, recently raised a round of funding from some large U.S. financial companies such as Bain Capital Ventures and Mastercard. DCG's former predecessor SecondMarket, also founded by Silbert, won a previous bitcoin auction. Billionaire venture capitalist Tim Draper, who was also successful in two prior bitcoin sales, meanwhile in an email said he was not participating the latest auction. "It seems like the world is waking back up to bitcoin," he wrote. The latest auction comes amid a surge the price of the virtual currency, with the price of a single bitcoin hitting $500 on Wednesday for the first time since August 2014. The price later fell, and by late Thursday, one bitcoin was worth $388, according to the Bitstamp exchange. (Reporting by Nate Raymond and Gertrude Chavez-Dreyfuss; Editing by W Simon and Lisa Shumaker)
