Bitcoins seized from Silk Road on offer in a second auction

December 4, 2014, 1:54 PM UTC
Photo courtesy: George Frey — Bloomberg/Getty Images

The U.S. Marshals Service is preparing for another Bitcoin auction Thursday.

The sale is of seized digital currency from the raid of online bazaar Silk Road. A total of 50,000 Bitcoins worth about $18.5 million will be up for grabs.

The auction comes about five months after the government agency’s first ever Bitcoin auction where it sold about 30,000 of the total 173,991 Bitcoin seized in its October 2013 bust of Silk Road, which authorities said was an online source for illegal drugs and other illicit activities.

The Bitcoin were found on the computer hardware belonging to Ross Ulbricht, who is said to have created the marketplace.

The Marshals Service is hoping the second auction runs smoother than the first. The agency accidentally released a list of potential bidders, which were intended to remain private, prior to the auction. It was the agency’s first experience running a digital auction and the learning curve was steep. Setting up an online auction is drastically different from the hard asset auctions for items such as cars and jewelry that the Marshals Service typically runs.

After the initial flub, the June auction went off as planned. The venture capitalist Tim Draper was the auction’s sole winner, laying claim to all 30,000 Bitcoin. Draper planned to use the currency to help launch the Bitcoin trading platform Vaurum.

Similar to the first auction in June, bidders will have a six-hour time block to submit a sealed bid for the currency. The 50,000 total inventory has been split into several lots: 10 blocks of 2,000 Bitcoin, and 10 blocks of 3,000 Bitcoin. Participants are allowed to bid on multiple blocks in both series, and the winners will be notified Friday.