US To Auction $1.6 Million Worth of Bitcoin From Various Cases (reuters.com) 67
An anonymous reader shares a Reuters report: The U.S. government said on Monday it plans to auction over 2,700 bitcoin that were forfeited during several cases, including the prosecution of the creator of the online black market known as Silk Road. The U.S. Marshals Service said that the online auction would be held on Aug. 22, and that potential bidders must register by Aug. 18. The bitcoin are worth about $1.6 million, according to the Bitstamp exchange. The auction is the latest by the Marshals Service of the digital currency. It completed four prior auctions from June 2014 to November 2015 of bitcoin seized during the prosecution of Ross Ulbricht, who authorities say ran Silk Road.
Auction of bitcoin? (Score:3)
I suppose bitcoin is not technically currency, but it still seems kind of pointless to auction off bitcoins . Imagine if the headline were "Feds to auction off $1.6M in forfeited cash". You would expect the auction price to be very, very close to 1.6M. The arbitrage on bitcoins may be such that it comes in slightly less than 1.6M, but not much.
Re:Auction of bitcoin? (Score:5, Interesting)
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Cash is seized all the time and never sold at auction.
Bitcoin is not money. Bitcoin is a commodity.
It happens that it is intended to act as much like a commodity based currency as possible under the current laws and the available technology. But that doesn't make it money, under either the general laws about money or the specific laws about how to dispose of a seized non-money asset.
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They are liquidating it. All seized property is sold at auction.
Currency is not.
Also.... how do they handle small amounts of stocks and bonds?
There's no need to hold your own auction, when the item is a commodity, and there are large public exchanges.
If they go through the expense and wasted time of holding their own auction, 'stead of hiring a good broker to liquidate it on
the open market, then they're just stupid; they'll wind up getting less than market value for their goods......
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All seized property is sold at auction.
Really? They sell drugs at auction? That's awesome! I could use a good deal on heroin. I don't have any use for kiddie porn, but it's interesting to hear they sell it at auction. Assault weapons, I'm on the fence. I don't have an immediate need for one, but if I can get a bargain at one of these auctions, it might come in handy some day...
Re: Auction of bitcoin? (Score:5, Funny)
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But what if you miss an individual who is willing to pay a little more for what you have?
The point of having the auction is that any interested party can participate, not just those sampled. The reason the government uses auctions to sell unwanted property is because they get the most return. It works very well.
Stop trying to make it sound like auctions are stealing away from us, when they're doing the exact opposite.
Re: Auction of bitcoin? (Score:2)
Auctions are for tangible things that are difficult to liquidate.
Auctions are for whatever the fuck they choose to auction off. FTFY.
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But what if you miss an individual who is willing to pay a little more for what you have?
They're not going to pay a little more than $X US, for a liquid asset if the same number of coins can be purchased on
a public exchange for $X US. There will have to be a discount to entice them to even participate in your
private little auction event which will have onerous requirements and hoops for the buyer to jump through
Versus other Bitcoin transactions.
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So obviously Bitfinex since they aren't wasting money on deposit insurance or excessive security, right?
They should do the deal with price determined by price of ALL well-known Exchanges and execute the transaction on whichever exchange
they can make the fastest execution on And ensure an arrangement with to execute the transaction which
provides them the cash before depositing their BTC to the exchange itself.
In other words, the Gov't need not rely on their insurance, because the Government will be rece
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I would like to extend on this - The Justice Department does have rules around this. When stocks (Google, MSFT, etc.) are sized they are sold on a exchange that meets minimum liquidity and transparency. Liquidity should be obvious - you don't want to crush the market by dumping a big block all at once. Transparency because you don't want a inside cartel depressing prices.
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Which exchange do they choose? The one who will give them the best exchange rate?
Absolutely. They will likely get a much better selling price Than if they held their own auction though. Their auction will be highly-inefficient..... Also, it's a PITA to qualify to bid in their auctions, if I recall, and settle the transaction Versus the interested Buyer just going to an exchange --- the only reason for a buyer to go through all the hassle involved in bidding on their auctions is to get a substanti
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They should be giving them to all the exchanges that got hacked, so they can refund their customers!
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Who would buy? (Score:5, Insightful)
This transfer would kill any pseudo-anonymity in the blockchain. Coins assigned to feds, Feds assigned to you, then can come back and lean on you to account for who you transferred coins to... Opening the question, does a bitcoin's market value depend on who owned it previously?
Re:Who would buy? (Score:5, Interesting)
Coin Washing service would quickly dissolve any link to you. Which is exactly what I would do. Once the Coins are disassociated with any person, they are useless.
Re:Who would buy? (Score:4, Funny)
with a free trip to a FPITA prison
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How is "coin washing" not "money laundering"?
Re: Who would buy? (Score:1)
"...Opening the question, does a bitcoin's market value depend on who owned it previously?..."
I think we are about to find out. It is an eventuality that every Bitcoin in existence will have a nefarious (or popular) history associated with it. For example: a Bitcoin that was used for payment to assassinate a public figure, or a Bitcoin used by a celebrity to purchase a hamburger --- those coins may fetch a premium to a collector.
Assuming that Bitcoin doesn't die off, of course.
Don't know why "the Fed", is
Re: Who would buy? (Score:2, Insightful)
Dollars are anonymous, Bitcoin has a history tired directly to it (block chain). Though, if you have very good history and documentation of a particular dollar bill that Elvis Presley used to purchase a hamburger with (ie: a picture of him holding said dollar with visible serial numbers), that'd be collectible too.
With Bitcoin, that history is automatic and permanent.
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You're wrong. Setup another receiving address on a proxy IP of some sort and transfer it back to yourself. It's not hard.
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IP address? What does that have to do with it?
It would be simple to follow the transfers as the coins move through the blockchain.
Re:Who would buy? (Score:5, Insightful)
The lock on my front door does a good job keeping knuckleheads away but if the US Government wanted to break into my apartment it would be useless to prevent them. That being the case should I stop locking my door when I leave the apartment because it isn't useful against the government actors?
Not sure what to make of this. (Score:5, Funny)
So I will reply with a haiku.
Federal Auction?
Or gigantic honeypot?
Caveat Emptor.
Just one question (Score:2)
Help them (the government) ease into handling e-currencies for profit.
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1.6 Million (Score:1)
1.6 Million worth of bitcoins? Hardly.
They will be auctioned and nobody with half a brain will pay anything close to current market value for them, and if the auction sells them for dirt cheap, that will bring the value of bitcoin tumbling down, further defeating the purpose of even participating in the auction.
And even if you win the auction, no exchange is mad enough to give you that kind of money right away (chances are, they don't even have that kind of money in hand). You are going to have to sit on yo
Re:1.6 Million (Score:4, Insightful)
Bitcoin's market value is approximately 10 billion dollars. This is not going to affect the price much. And "destroying" the coin won't make bitcoin any less valuable. Just as destroying gold doesn't make the remaining gold left valuable.
Can government stop bitcoin? Yes. By imprisoning and killing people who use it. Outside of that - it will be very difficult (if not impossible).
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I've not noticed anywhere I've shopped on-line that excepts bitcion. Any idea who does?
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See: http://spendbitcoins.com/place... [spendbitcoins.com]
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I've shopped at newegg but not recently.
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Cool story bro.
When do they auction off the drugs? (Score:2)
Oh yeah, I forgot, they "destroy" the drugs so nobody takes them. It would be wrong to auction them off and keep the proceeds. Then they would be dealers. Its much better that we take their word for it when they take away all of the stuff that belongs to bad guys and sell it, except for the drugs which we never see again because they don't sell it at a public auction. You can be sure if you never see it again that it was destroyed since you can always believe the good guys. Why would they lie? Only b
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They don't destroy it, they use it to bait other people.
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.. that state actors can seize property for their own gain.
Really think about it for a second.
Quite frankly anything seized and not returned should be destroyed (in the case of currency) or donated to a registered charity with a small fee assessed to the seizing department (which should also be destroyed).
No, it should continue to be the property of whoever holds legal ownership. If someone doesn't own something legally, it should revert to the previous owner.
Forfeiture laws are inherently abusive, and exist because of a society that's built on the "values" of government greed and punitive justice.
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Reportedly, in the case of the Silk Road bitcoins, the Feds asked around for who owned them. Since the owner(s) would be tied to criminal activity, nobody came forward. What should the FBI have done?
Come to my auction (Score:2)
I'm auctioning off $100 bills, starting at $110 each. Get 'em before they're gone!
One of them is a very rare misprint- it has both the back AND the front printed upside down. I'm asking $200 for that one.
Inspection of property? (Score:2)
I wonder if potential bidders will be allowed to inspect these coins for validity? Would suck to buy $1.6m of Bitcoin to find out they are worthless/already spent.
This would be like buying a box of confiscated iTunes gift cards; which of them have been used or had the PINs copied off before being put in the box?
each block requires 100k registration to bid (Score:2)