US will auction bitcoins seized from Silk Road, bidders must deposit $200,000

The United States government announced Thursday that it will sell the nearly 30,000 bitcoins it seized last year from Silk Road, a notorious online marketplace for drugs and hitmen, in a 12-hour auction on June 27.

The auction will be conducted by the U.S. Marshals Service, and will require would-be bidders to register by June 23 and make a refundable $200,000 wire transfer to a government bank.

News of the auction has been bubbling on Reddit all day, where readers pointed to transfers on the blockchain, which records the currency’s movements, to suggest that Uncle Sam was getting set to unload bitcoins once controlled by Silk Road’s owner, who is best known as Dread Pirate Roberts.

The auction will be conducted by selling nine blocks of 3000 bitcoins, and then a block of 2,657 bitcoins.

Bitcoins are currently valued at around $650 apiece so the auction, which is being conducted under criminal forfeiture laws, could net the U.S. government around $20 million.

This could be the first of several auctions as the Marshal’s Service, in a press release announcing the auction, stated that it is holding more bitcoins belonging to Ross Ulbricht aka Dread Pirate Roberts:

All the bitcoins that were held in an FBI wallet have been transferred to two U.S. Marshals wallets. One wallet is being used for this auction, and the other wallet is being used to hold the remaining approximate144,342 bitcoins that are part of the civil forfeiture and criminal action brought against Ross Ulbricht and the assets of Silk Road.

Ulbricht is in prison awaiting trial for attempted murder related to his hiring a fake hitman to kill people he believed had betrayed him.