Weird. Why not sell them in much, much smaller increments? You stand a way better chance of getting full market value if you don't enforce the artificial liquidity constraint of "only buyers who want a zillion bitcoins right now". Or just legitimately sell them on an exchange. Is there a reason the gov't would be obligated to go about it inefficiently?
They are the U.S. Marshals. They are most likely acting on a federal court order that says words to the effect of, "Auction this stuff." They sell vehicles, boats, buildings, anything that can be seized by the government. Auctions are the only method I've ever seen them use, I think because that allows the public to bid and avoids conflicts of interest (e.g., an agent's brother-in-law gets first crack at whatever they're selling).
This is a typical assest forfeiture auction. They don't want to deal with multiple buyers or non-cash-on-the-spot buyers. They value disposing of assets quickly and cleanly over getting market value.
"The U.S. Marshals Service (USMS) offers property for sale to the public which has been forfeited under laws enforced or administered by the United States Department of Justice, its investigative agencies (Drug Enforcement Administration, Federal Bureau of Investigation, and Bureau of Alcohol, Tobacco and Firearms), and certain other federal law enforcement agencies. "
My guess here is that bitcoin is considered property and not currency, and there are laws around this.
Not sure about why not split them up, but usually there's a requirement that seized assets are auctioned off. Since the government can't treat that bitcoin amounts as currency doing an exchange like that probably violates some rule. I believe that they have to do similarly with any other security (stocks, bonds, etc.) that's been seized.
It's actually efficient to do it this way. The price may be higher b/c buyers are willing to pay a premium to buy coins off-exchange.
Also interesting to note that in previous auctions it looks like USMS only conveyed a "bill of sale" for the bitcoins. We don't know what arrangements were made for conveying the bitcoins themselves. I would speculate that they were transferred to a wallet designated by the buyer, but it's possible they were not.
It looks like they are not interested in maximum profit indeed. Maybe they'd like to be very sure about where they are going? Or maybe it is some legal constraint, like a country cannot subscribe to a consumer exchange?
Someone will jump through the hoops, and "earn" a profit in the process. Then, because the marshals set up the hoops just like they were told, some of that profit will find its way back to one or more of the more senior marshals involved in this farce. In USA we prefer our corruption giant-sized.
> The USMS will not transfer any bitcoins until it has confirmed receipt of purchase funds from the buyer.
I wonder if you can reverse the wire and keep the bitcoins.
> The USMS will not transfer bitcoins to an obscene public address, a public address apparently in a country restricted by the Office of Foreign Assets Control (OFAC), a public address apparently associated with terrorism, other criminal activities, or otherwise hostile to the United States.
How would a bitcoin address be located in a foreign country? Or even located anywhere?
And wouldn't anyone participating in this create a brand new address with the private key in cold storage?
>I wonder if you can reverse the wire and keep the bitcoins.
Once cleared, wires can't be reversed without the recipient's permission. Their liquid, irreversible nature is why people use them (and not, say, checks or ACH) for high value transactions.
> a public address apparently in a country restricted
I think apparently is the key word here. For example if you're running a company in restricted country X and it's known/advertised that this address is associated with your company, it would match.
I wonder whether they will get a better deal through a sale like this than simply selling them on an exchange (or exchanges). Do they sell on an exchange when they need to dispose of other assets that have exchanges for trading?
I wonder if this makes legal precedence that the US GOV is giving it's stamp of approval that bitcoin is valid and legal.
i.e. when they seize drugs they don't auction them off because they are illegal. When they seize fake iPhones I'm sure they don't auction them off because they are fake and illegal.
Buy auctioning BitCoins it seems to me they're saying "It's a legal thing you are allowed to buy and sell".
Bitcoin is a legal thing you are allowed to buy and sell.
The Bitcoiners' dream is to have it be recognized as currency; as a commodity it's just fine, or did you believe all that Bitcoin activity is happening illegally somehow?
Yes, but they have already sold them (tens of thousands) in previous auctions. This auction is from another bunch of coins seized from other law breakers.
Which market, the shady one or the really shady one? At what price? Do Bitcoin exchanges support all-or-none orders? What if the size of the order is a significant fraction of the order book depth? etc.
My guess is that "United States vs Bitcoin wallet" could be an instance of civil forfeiture, where instead of going through the steps required to prosecute someone, US authorities are putting literally money in the defense position and effectively automatically taking it. Which yields some tragically comedic titles like: The United States Government vs $25,180 in United States Currency.
[+] [-] numlocked|9 years ago|reply
[+] [-] sverige|9 years ago|reply
[+] [-] DougWebb|9 years ago|reply
[+] [-] omgitstom|9 years ago|reply
My guess here is that bitcoin is considered property and not currency, and there are laws around this.
Edit: Looks like they are treating bitcoin as property -https://www.usmarshals.gov/foia/directives/asset_forfeiture....
[+] [-] simcop2387|9 years ago|reply
[+] [-] zekevermillion|9 years ago|reply
Also interesting to note that in previous auctions it looks like USMS only conveyed a "bill of sale" for the bitcoins. We don't know what arrangements were made for conveying the bitcoins themselves. I would speculate that they were transferred to a wallet designated by the buyer, but it's possible they were not.
[+] [-] cloudjacker|9 years ago|reply
Their last auction was 44,000 bitcoin worth $20 million
[+] [-] thomasrossi|9 years ago|reply
[+] [-] martinko|9 years ago|reply
[+] [-] jessaustin|9 years ago|reply
[+] [-] koolba|9 years ago|reply
I wonder if you can reverse the wire and keep the bitcoins.
> The USMS will not transfer bitcoins to an obscene public address, a public address apparently in a country restricted by the Office of Foreign Assets Control (OFAC), a public address apparently associated with terrorism, other criminal activities, or otherwise hostile to the United States.
How would a bitcoin address be located in a foreign country? Or even located anywhere?
And wouldn't anyone participating in this create a brand new address with the private key in cold storage?
[+] [-] superuser2|9 years ago|reply
Once cleared, wires can't be reversed without the recipient's permission. Their liquid, irreversible nature is why people use them (and not, say, checks or ACH) for high value transactions.
[+] [-] mikeash|9 years ago|reply
[+] [-] viraptor|9 years ago|reply
I think apparently is the key word here. For example if you're running a company in restricted country X and it's known/advertised that this address is associated with your company, it would match.
[+] [-] advisedwang|9 years ago|reply
[+] [-] charlesdm|9 years ago|reply
[+] [-] grecy|9 years ago|reply
i.e. when they seize drugs they don't auction them off because they are illegal. When they seize fake iPhones I'm sure they don't auction them off because they are fake and illegal.
Buy auctioning BitCoins it seems to me they're saying "It's a legal thing you are allowed to buy and sell".
[+] [-] UweSchmidt|9 years ago|reply
The Bitcoiners' dream is to have it be recognized as currency; as a commodity it's just fine, or did you believe all that Bitcoin activity is happening illegally somehow?
[+] [-] ErikAugust|9 years ago|reply
[+] [-] mrb|9 years ago|reply
[+] [-] mikerichards|9 years ago|reply
Forfeiture is a scummy thing by the feds, but I'll take a 2017 vette with those bitcoins.
[+] [-] desireco42|9 years ago|reply
[+] [-] wmf|9 years ago|reply
[+] [-] bluedino|9 years ago|reply
[+] [-] desireco42|9 years ago|reply
[+] [-] cbanek|9 years ago|reply
I hope the bitcoin wins.
[+] [-] DINKDINK|9 years ago|reply
https://en.wikipedia.org/wiki/Civil_forfeiture_in_the_United...
[+] [-] rotoole|9 years ago|reply
[+] [-] omarchowdhury|9 years ago|reply
[+] [-] vmarsy|9 years ago|reply
> 2,719.32669068 bitcoins
> The required deposit to participate in this auction is $100,000.00 USD.
As of today 2719 Bitcoin equals $1,597,793 (Source: google)
This is a weird auction, putting Bitcoin risks aside, Bitcoin is a currency. Is there auctions such as "FOR SALE: 1,000,000€" ?
[+] [-] mahyarm|9 years ago|reply
For Sale: X gallons of gas. As of today X gallons of gas equals $X (source: my local gas station)
[+] [-] maxander|9 years ago|reply
[+] [-] nimish|9 years ago|reply
[+] [-] joe5150|9 years ago|reply
[+] [-] kondro|9 years ago|reply
[+] [-] revelation|9 years ago|reply
[+] [-] kalleboo|9 years ago|reply
[+] [-] tedunangst|9 years ago|reply