About $13m in bitcoins will be auctioned in Sydney in June after Victorian police confiscated the digital currency as proceeds of crime.
Ernst & Young is running the process, which is only the second such bitcoin auction in the world after the US Marshals Service sold 144,000 bitcoins over a two-year period that had been confiscated from Ross Ulbricht, who founded the online drug bazaar Silk Road, the accountancy firm’s transaction partner, Adam Nikitins, said.
Based on Tuesday’s single bitcoin price of $533.80, the cache of cryptocurrency is valued at almost $13.1m.
Nikitins expects strong interest in the auction since the bitcoin price has become less volatile after the US auctions. Ernst & Young has received expressions of interest from the United States, Europe and Australia, he said.
“Over the last few months, the price of bitcoins has been steadily rising and the volatility has gone out of it,” Nikitins said.
Nikitins would not say who the bitcoins were confiscated from, but said registered bidders would be told.
The Victoria state government has confirmed that it seized about 24,500 bitcoins in late 2013 from a Melbourne drug dealer.
Richard Pollard, 32, was sentenced in the Melbourne county court in October to 11 years in prison after pleading guilty to drug trafficking on the Silk Road website.
The haul of bitcoins will be mostly sold in lots of about 2,000.
Bitcoin is a digital currency that allows people to buy goods and services and exchange money without involving banks, credit card issuers or other third parties. The coins are created by users who “mine” them by lending computing power to verify other users’ transactions, receiving bitcoins in exchange.
Bitcoins also can be bought and sold on exchanges with US dollars and other currencies. Their value has fluctuated over time. At its height in late 2013, a single bitcoin was valued above $1,100.
Bidders can register until 7 June for the 24,518 bitcoins on offer. The 48-hour sealed auction will take place from 20 June.
Source: The Guardian