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In a press release on Thursday, the US Attorney's office for the Southern District of New York announced the forfeiture of 29,655 bitcoins that were seized from a Silk Road server during a raid in October. At current exchange rates, that purse is worth about $25 million (£15.3 million), up from $3.5 to 4 million when it was seized. The US Attorney's office also announced that the Silk Road website will be forfeited along with the bitcoins.
A spokesperson for the US Attorney's office told Forbes that the bitcoins will be auctioned off, although he could not say when the auction will take place. It will be the federal government's first-ever auction of bitcoins, and as Forbes points out, there is no legally-certified US Bitcoin exchange, so converting the stash into cash first will likely not be an option.
Ross Ulbricht, who allegedly went by the name of Dread Pirate Roberts and who is suspected of being the mastermind behind the Silk Road, has been in custody since federal agents arrested him at the Glen Park branch of the San Francisco Public Library three months ago. That day, feds also seized a cache of 144,000 bitcoins that belonged to Ulbricht personally. While the government is seeking to auction off those bitcoins as well, Ulbricht is contesting the forfeiture in civil court.
Just two days after the Silk Road and its assets were seized, Bitcoin enthusiasts discovered the wallet. At the time, it contained almost-27,000 bitcoins seized from the Silk Road that were being held by the federal government. As Bitcoin transactions are public, several people began transferring very small amounts of bitcoin into the federally-held wallet so as to send a message to the authorities in the "public field" of the transaction. Some messages included "Public Note: I THOUGHT OF SNIFFING FARTS WHILST SENDING THESE BITCOINS TO YOU" as well as "Public Note: hey computer geek, who control this address. 'Ross Ulbricht' is not the bad guy, you are a bad guy. Please open your eyes, dont be brainwashed, and think your self!!!" Those micro-transactions will also be included in the auction, it seems.
Manhattan US Attorney Preet Bharara seemed to go out of his way to point out that the impending Bitcoin forfeiture is not targeting Bitcoin, simply illicit trade in general. "With today's forfeiture of $28 million (£17.1 million) worth of bitcoins from the Silk Road website, a global cyber business designed to broker criminal transactions, we continue our efforts to take the profit out of crime and signal to those who would turn to the dark Web for illicit activity that they have chosen the wrong path. These bitcoins were forfeited not because they are bitcoins, but because they were, as the court found, the proceeds of crimes."
This story originally appeared on ars technica
This article was originally published by WIRED UK
