Feds get go-ahead to sell $28 million bitcoin stash; eBay UK to open virtual currency category

Feds get go-ahead to sell $28 million bitcoin stash; eBay UK to open virtual currency category

The FBI has been given the go-ahead to liquidate up to $28 million worth of bitcoins seized during the shutdown of the Dark Web marketplace Silk Road.

Preet Bharara, the United States Attorney for the Southern District of New York, on Thursday approved the forfeiture of approximately 29,655 bitcoins that were swiped from the Silk Road server in September last year.

At the time of the raid, the Government also seized an additional 144,336 Bitcoins (worth over $130 million) that were found on computer hardware belonging to Silk Road founder Ross William Ulbricht.

Ulbricht continues to thwart the attempts of the Feds to liquidate his assets, using the courts to contest the forfeiture of the bitcoins by asserting that he is the rightful owner of the stash.

The FBI has yet to give a timeline for the sale of the bitcoins in its possession, sparking fears among holders of the crypto-currency that a sudden sell-off could lead to more volatility in the exchange rate and downward pressure on prices.

Both eBay president John Donahoe and PayPal president David Marcus have become vocal supporters of the virtual currency movement in recent months. In November, Donahoe told the FT that PayPal could one day incorporate bitcoins, describing the interest in digital currencies as a "very powerful thing".

Comments: (2)

A Finextra member
A Finextra member 20 January, 2014, 09:27Be the first to give this comment the thumbs up 0 likes

So, of the 12 million bitcoins in existence, this illegal site has 1.5% of them. Not sure what cut they take of sales, but say it's a tenth - that means that at least 15% of bitcoins are used for criminal reasons.

Barry Mac
Barry Mac - LSE - London 22 January, 2014, 21:03Be the first to give this comment the thumbs up 0 likes

Compare that 28m to the amount of money in old fashioned (much more untraceable) cash used by organised crime. "2.7 per cent of global GDP"

http://www.unodc.org/unodc/en/frontpage/2011/October/illicit-money_-how-much-is-out-there.html

The bitcoin system is a public ledger. https://blockchain.info/address/1F1tAaz5x1HUXrCNLbtMDqcw6o5GNn4xqX 

 

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