Original URL: http://www.theregister.co.uk/2014/01/17/feds_prepare_to_sell_28million_worth_of_bitcoin/

Feds to flog off $28m in Bitcoin from Silk Road drug souk seizure

Calling it a biz 'designed to broker criminal transactions' doesn't stop them cashing in

By Jasper Hamill

Posted in Government, 17th January 2014 19:02 GMT

American officials are preparing to sell off $28m worth of Bitcoin which was seized during the operation to shut down the Silk Road online drugs market last year.

In a statement, US prosecutor Preet Bharara announced the forfeiture of 29,655 Bitcoins.

She said: "With today’s forfeiture of $28m worth of Bitcoins from the Silk Road website, a global cyber business designed to broker criminal transactions, we continue our efforts to take the profit out of crime and signal to those who would turn to the dark web for illicit activity that they have chosen the wrong path.

"These Bitcoins were forfeited not because they are Bitcoins, but because they were, as the court found, the proceeds of crimes.”

Of course, disposing of the Bitcoin is likely to be tricky.

"We have not yet determined exactly how the Bitcoins will be converted and liquidated,” Manhattan US Attorney Office spokesman Jim Margolin told Forbes.

It is likely the coins will be auctioned off, just like other property seized during a criminal operation.

The Silk Road was run by a shadowy figure or group called Dread Pirate Roberts, who prosecutors claim is actually Ross Ulbricht, a 29-year-old man who is currently in prison awaiting trial.

In September last year, a Manhattan federal court charged Ulbricht with one count of narcotics conspiracy, one of count of conspiracy to commit computer hacking, and one count of money laundering conspiracy.

He is contesting the forfeiture of the 144,336 Bitcoins seized from his computer after claiming he legitimately owns them. These are now worth about $130m. ®