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US Government to auction $18 million of the Silk Road's Bitcoins

Graham CLULEY

June 14, 2014

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US Government to auction $18 million of the Silk Road's Bitcoins

If you know what the Silk Road is then you’re either someone who has a predilection for purchasing drugs online and engaging in other criminal activity, or you’re someone who follows the latest computer security news with a keen interest.

Hopefully it’s the latter. But whichever camp you fall into, you might be fascinated to hear about the latest development.

Silk Road, of course, is the underground marketplace that the FBI busted in October last year. The site, hidden from casual visitors on the dark web accessible only via tools like Tor, allowed its members to buy and sell hard drugs, fireams and computer hacking tools.

When the FBI shut it down it was a huge coup for the authorities, as Silk Road is thought to have generated a staggering $1.2 billion in online sales during its three years of existence.

Now, the US Marshals service is trying to get some of that money back.

On its website it is advertising that it will be holding an auction for the 29,656.51306529 bitcoins it found on wallet files held on Silk Road servers.

And, if you’re interested in bidding for the bitcoins (worth an eastimated $17.8 million) all you have to do is provide the following to the authorities:

  • A manually signed pdf copy of the Bidder Registration Form
  • A copy of a Government-issued photo ID for the Bidder (or Control Person(s) of Bidder)
  • $200,000 USD deposit sent by wire transfer originating from a bank located within the United States (please provide receipt of transfer)

So, if you have a spare $200,000 kicking around, burning a hole in your pocket, maybe you’d like to take a punt at bidding for some of these Bitcoins? Of course, you have to feel comfortable with the authorities knowing who you are (after all, they might take an interest in what precisely you’re intending to do with so much of the digital currency).

A statement on the webpage makes clear that the bitcoin haul does *not* include bitcoins found on the computer of Ross William Ulbricht – the 29-year-old man who the authorities allege is Dread Pirate Roberts, the notorious administrator of the Silk Road.

THIS AUCTION DOES NOT INCLUDE THE BITCOINS CONTAINED IN WALLET FILES THAT RESIDED ON CERTAIN COMPUTER HARDWARE BELONGING TO ROSS WILLIAM ULBRICHT, THAT WERE SEIZED ON OR ABOUT OCTOBER 24, 2013 (“DPR SEIZED COINS”).

It is thought that Ulbricht’s own digital wallets may have contained enough Bitcoins to be worth more than $85 million at current exchange rates.

Of course, it’s not illegal to own Bitcoins. And it’s perfectly possible that he acquired that many Bitcoins through entirely legal practices.

Ulbricht has pleaded not guilty to the charges levied against him, and is expected to stand trial late this year.

It seems that the Silk Road is getting a reputation for finding it hard to hang on to its Bitcoins. In February it was reported that hackers had raided the relaunched Silk Road 2.0, created in the wake of Ulbricht’s arrest, of virtually all of its Bitcoin reserves, making off with an estimated $2 million.

The bidding process begins on 27 June. Let us know if you’re planning to take part, and feel free to send a few in the direction of the Hot for Security team if you’re feeling charitable.

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