In an unexpected move, the federal government stalled announcing the winners of its recent bitcoin auction. The auction, which took place on Friday, June 27, featured nearly 30,000 bitcoins for sale. The massive stock of the relatively new cryptocurrency was acquired after federal authorities shut down the online marketplace known as the "Silk Road." Silk Road existed as a sort of virtual black market, where consumers could access purveyors of a wide array of drugs, services and illegal staples on the deep web. Bitcoin was the preferred method of payment considering its potential for anonymity.
Valuation of auction
Specifically, the federal government was auctioning off 29,656 of the 144,336 bitcoins they obtained through the closing of Silk Road. The total valuation of the repossessed bitcoins, including the nearly 30,000 auctioned off on Friday, is nearly $89 million. This is $4 million higher than the lot was worth at the start of the auction, but considerably lower than its peak under federal ownership, which was nearly $150 million. Lynzey Donahue, a spokeswoman for the U.S. Marshals Office, the agency that conducted the auction, indicated to the New York Post that 63 total bids were received on Friday from 45 bidders.
Though the initial plan was for the US Marshals Office to begin contacting the winners of the auction regarding their awards shortly after the end of bidding on Friday, the first notifications did not end up being released until after the end of the business day on Monday. Shortly following the auction closing, a spokesman for the US Marshals Office was only able to offer the New York Post a cryptic answer regarding the cause of the delay.
"Not today," said the spokesman. "I'm not at liberty to say why. The process is ongoing."
News of the results began to break on social media late Monday night, with one prominent investor tweeting that the syndicate he had set up to bid in the auction had been "outbid on all blocks."
Perhaps the largest hurdle that bitcoin has faced in becoming a more mainstream form of currency is that its associations are typically with slightly stigmatized entities, such as Silk Road. The bitcoin market has also shown itself, over the last few years, to be incredibly volatile, defining itself by extreme peaks and valleys but growing rapidly nonetheless. The auction held by the US Marshals office deviated from the typical bitcoin-associated benefit of anonymity by requiring names, addresses, social security numbers and financial records from all potential bidders.