Financial News

  • 14 June 2014, 2:53

Seized Silk Road Bitcoins Auctioned By US Govt

The US government is to auction 30,000 bitcoins valued at $18m (£10.6m) which were seized during the FBI raid on the Silk Road black market website.

The online hub was notorious for transactions involving illegal drugs and criminal activities, and was shut down last October.

The bitcoins were contained on Silk Road servers, and will be auctioned over a 12-hour period on June 27.

Nine blocks of 3,000 bitcoins and one block of 2,657 bitcoins will be up for grabs.

The US Marshals Service said it will only accept all-cash offers for the bitcoins.

Those wishing to take part in the auction must transfer a $200,000 (£117,000) deposit to the US government in advance, and provide a copy of government-issued photo identification.

Bitcoin is a virtual currency which is not backed by any government or central bank.

Each bitcoin is 'mined' by users who use powerful computers to carry out complex mathematical equations.

Bitcoins are currently worth $602.24 (£354.59) each. They fell below the $600 (£353.27) mark at one point following the announcement of the government auction, but soon recovered.

Ross William Ulbricht, who is alleged to be the owner of the Silk Road, has been charged by the US with drug trafficking, computer hacking and money laundering.

He denies all of the charges.

Bidders have been asked to certify that they are not acting on behalf of anyone representing Silk Road or Ulbricht.

Bitcoins contained on the computer hardware belonging to Ulbricht are not part of the auction.

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