Feds to sell off $18 million in bitcoin

The U.S. Marshals Service is selling off about $18 million worth of bitcoin seized from the online black market Silk Road later this month.

The shady marketplace, a notorious haven for drugs and other illicit purchases, was taken down by the FBI last year. The government now wants to auction off nearly 30,000 bitcoins seized at the time to the highest bidder, the Marshals Service announced late on Thursday.

{mosads}Only bidders who register with the agency will be able to take part in the 12-hour auction on June 27. Winners will be notified on June 30.

The government is selling off nine blocks of 3,000 bitcoins each and one block of 2,656 bitcoins.

October’s action against Silk Road was a major victory for the government and was lauded by the site’s critics in Congress. The site sold a slew of drugs, malicious software and other illegal products but operated solely in bitcoins in order to keep users anonymous.

Use of the virtual currency on the site gave it a stigma that major Wall Street banks and lawmakers are only now overcoming.

Ross Ulbricht, who allegedly operated the site under the pseudonym Dread Pirate Roberts, has pleaded not guilty to the charges and is set to go to trial in November.

His bitcoins seized by the government will not be going up for auction, the Marshals Service said.

The bitcoin exchange rate was down slightly overnight, after the news of the auction. One bitcoin is currently worth about $600, down from a high of more than $1,000 late last year.