U.S. Marshals To Hold Bitcoin Auction For $50 Million Worth Of Cryptocurrency.
Roger Aitken , CONTRIBUTOR
Opinions expressed by Forbes Contributors are their own.
The U.S. Marshals Service (USMS), the nation’s oldest federal law enforcement agency whose federal marshals have served the country since 1789, is to conduct a sealed bid auction for approximately 3,813 Bitcoins – currently worth around $51.5 million.
The auction is in connection with various federal criminal, civil and administrative cases.
There is no disclosed reserve price for this auction, which will take place over a six-hour period on January 22 from 9:30 a.m. until 3:30 p.m. Eastern Standard Time (EST), and the United States Marshals Service saying it “reserves the right to sell some, all or none of the Bitcoins for any reason.”
It is the sixth Bitcoin auction that the USMS have held to date.
In order to register, potential bidders must complete all the necessary registration requirements by noon EST on January 19th 2017
via email (USMSBitcoins@usdoj.gov).
A $200,000 deposit is required to participate, with deposits being returned to non-winning bid (within five business days),
While the deposit of the winning bidder is retained by USMS and credited towards the purchase price.
The sealed bid auction for approximately 3,813 Bitcoins separated into three series, as follows:
Series A (5 blocks of 500 Bitcoins);
Series B (5 blocks of 100 Bitcoins); and,
Series C (1 Block of c.813 Bitcoins).
Individuals will not have the opportunity to view other bids and nor will they have the opportunity to change their bid once submitted.
Bids to U.S. Marshals Service will only be accepted by email from pre-registered bidders only.
While open to foreign citizens (non-U.S. nationals), bids will not however be accepted from any person or entity that appears on the U.S. Treasury Department’s Office of Foreign Assets Control list of “Specially Designated Nationals.”
And, all deposit and purchase funds must be received from a U.S. bank.
The required items for registration include:
A manually signed pdf copy of the “Bidder Registration Form”;
A copy of a Government-issued photo ID for the Bidder (or Control Person(s) of Bidder);
A Deposit in US Dollars sent by Electronic Funds Transfer (EFT) originating from a bank located within the United States;
A copy of the EFT transmittal receipt. (Note: The USMS accepts EFTs via Automated Clearing House (ACH) Credit or Fedwire).
Should the winning bid(s) for any of the three series of cryptocurrency blocks fail to send funds to USMS by wire transfer from a bank located in the U.S. by 2:00 P.M. EST, on Tuesday, January 23, 2018, or not close the transaction through no fault of the USMS, it is explained that the bidder will “forfeit” their deposit(s) to the USMS.
The winning bidder(s) will be notified January 22.
Bidding In The Auction
A single registration form allows an individual to bid on multiple blocks from Series A, Series B, and Series C at the same per Bitcoin price.
It does not allow multiple bids at differing per-Bitcoin prices to be submitted.
Consequently if one wants to bid multiple prices on the different blocks, then additional registration forms and additional deposit funds
($200,000 a time) will be need to be submitted.
As an example, if a bidder wanted to purchase two blocks of Series A and one block of Series B at different prices (e.g. say $X per Bitcoin for 500 Bitcoins from Series A, $Y per Bitcoin for 500 Bitcoins from Series A, and $Z per Bitcoin for 100 Bitcoins from Series B),
they need to submit three separate registration forms – and total deposit of $600,000.
A fact sheet on the auction process explains that the USMS will notify all bidders about their eligibility to participate in the auction by email no later than 5:00 PM EST on Friday, January 19, 2018.
And, should the USMS determine that any individual is not an eligible bidder, deposit funds will be returned, and they will not be eligible to participate in the online auction.
Individuals participating will not have the opportunity to view other bids and nor will they have the opportunity to change their bid once submitted.
The Bitcoins being auctioned by the USMS were forfeited in a number of federal criminal, civil and administrative cases, include:
An overview of the article and information is displayed below by
CLICKING THE LINK
United States v. Approximately 85.6971800 Bitcoins (Dakota Hower), District of Idaho (Case No. 17-00288)
United States v. Aaron Michael Shamo, et al, District of Utah (Case No.16-00631)
United States v. Daniel Robert Summerfield, Eastern District of California (Case No. 17-00135)
United States v. Alexander Konstantinovich Tverdokhlebov, Eastern District of Virginia (Case No. 17-00009)
FBI Administrative Forfeiture of Various Bitcoin from Drew Callahan
USPIS Administrative Forfeiture of 64.99255187 Bitcoins from wallet XXXXfVLXA
USPIS Administrative Forfeiture of 5.80090739 Bitcoins from wallet XXXXJngi4
USPIS Administrative Forfeiture of 11.6279 Bitcoins from wallet XXXXJPWT7
USPIS Administrative Forfeiture of 53.05495044 Bitcoins from wallet XXXX4z96W
Department of Homeland Security, United States Customs and Border Protection – Various cases
Asset Forfeiture Statistics
In terms of asset forfeiture made as a whole by the U.S. Marshals Service, the value of assets on hand as of September 30, 2016 stood at $1.5 billion, with the amount distributed to victims of crime and claimants being $183 million and the amount shared with participating state and local law enforcement agencies at $305 million.
The U.S. Marshals Service plays a critical role in identifying and evaluating assets that represent the proceeds of crime as well as efficiently managing and selling assets seized and forfeited by the Department of Justice.
The Marshals Service manages a wide array of assets, including art, antiques, cash, collectibles, commercial businesses, financial instruments, real estate, vehicles, jewellery, vessels and aircraft. Proceeds generated from asset sales are used to operate the program, compensate victims and support various law enforcement efforts.
With regard to the proceeds from the sales attributable to each case – related to these Bitcoin sales – a spokesman for the USMS said that they “will be handled differently, depending on the case.”
While there is no disclosed reserve price for the auction that takes place on January 22, the USMS stated that it “reserves the right to sell some, all or none of the Bitcoins for any reason.” Bids received before or after the online auction period will not be considered as will those bids that do not conform to the instructions.
Clearly, having to make a deposit of $200,000 to take part in the auction may preclude many investors, but syndicates could bid through a single named individual. For further details on the bidding process view this link.
Follow Roger, an ex-FT writer who has penned various investment stories, on Twitter @AitkenRL, LinkedIn, Forbes, Google+. He won a State Street Institutional Press award in 2015.