US Government Set to Sell Seized Bitcoins from Dark Web Racket

The government is about to sell 513 Bitcoin and 512 Bitcoin Cash worth around $10 million.

The United States government received the nod from a federal judge in the state of Utah to sell all the seized Bitcoin and Bitcoin Cash from a dark web racket.

After taking down the illicit business, which was run by Aaron Michael Shamo, the federal authorities seized a Ford pickup truck and a BMW car along with 513 Bitcoins and 512 Bitcoin Cash. The combined worth of these assets is nearly $10 million, and they will be sold at an auction.

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On March 2017, Shamo was found guilty of conspiracy to distribute a controlled substance, aiding the importation of a controlled substance, intentional adulteration of drugs, use of the US mail in drug trafficking, conspiracy to commit money laundering, and engaging in monetary transactions in property derived from specified unlawful activity, along with his accomplices Drew Wilson Crandall, Mario Anthony Noble, and Sean Michael Gygi.

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After the verdict, the seized assets went to the United States Marshals Service (USMS) for safekeeping. But the government had concerns about safety and asked permission to liquidate them. The government also has to pay a monthly sum of $465 to the USMS for holding the cryptocurrency.

A section of the court document reads: “The vehicles [Bitcoin and Bitcoin Cash] have been seized and are in the custody and control of the United States Marshals Service. Every month, the USMS is accruing $465/month in storage fees for these vehicles. The total expenses for these two vehicles currently is $5,010.70. The BTC and BCH have been transferred to a Government wallet. Due to the volatile market for cryptocurrencies, the BTC and BCH risk losing value during the pendency of the forfeiture proceedings.”

As per the court order, the US government has to wait for 60 days to start the sale. The cryptocurrency can be sold at more than one exchange, but they have to be transferred in increments of less than 50 coins to prevent fraud or error.

This is not the first time that the US government is engaging in the selling of seized cryptocurrencies. Last October, the government disclosed the sale 144,336 bitcoins, which were seized after shutting down the infamous Silk Road. In that sale in 2014, the government sold the coins at a rate of $336 per coin, with a total value of $48 million. Today, that same number of bitcoins is worth $2.4 billion.

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