Bitcoins worth £9 million to be sold at auction after police seizure

6 months ago

About £9 million in Bitcoins will be auctioned in Sydney, Australia, after police confiscated the digital currency as proceeds of crime.

Ernst & Young transaction partner Adam Nikitins said the accountancy firm was running the process.

The June auction is only the second such Bitcoin auction in the world after the US Marshals Service sold 144,000 over two years ending in 2015 that had been confiscated from Ross Ulbricht, who founded online drug bazaar Silk Road, Nikitins said.

Nikitins expects strong interest in the auction because the Bitcoin price has become less volatile since the US auctions. Ernst & Young has received expressions of interest from the US, 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,” he said.

Bitcoin is a type of 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 verifying other users’ transactions, and receive Bitcoins in exchange.

Nikitins would not reveal from whom the Bitcoins were seized, but said registered bidders would be told.

The Victoria state government confirmed it had 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.

In the US, Ulbricht, 32, was sentenced in the US District Court in May last year to life in prison after he was convicted of charges accusing him of operating that website for nearly three years from 2011 until his 2013 arrest.

Like the US auction, the Australian Bitcoins will be mostly sold in lots of 2,000. One lot will contain 2,518.

Bidders can register from Wednesday until June 7 for the 24,518 Bitcoins on offer. The 48-hour sealed auction will take place from June 20.

Based on Tuesday’s Bitcoin price of £365.60, the cryptocurrency is valued at almost £8.9 million.

Bitcoins can also 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 £753.