Bitcoin (BTC)

US Government Move to Sell Seized Bitcoins Worth $8.5 Million

Sell Seized Bitcoins

A judge in a Utah Federal court has assented to the requests of the US government to sell off more than 513 bitcoins (BTC) and 512 Bitcoin Cash (BCH). These bitcoins were seized from the alleged ringleader of an online pharmaceutical ring. Judge Dale Kimball approved the sale of the cryptocurrencies, which were only worth about $500,000 at the time of the arrest of the accused individual but are now worth about $8.4 million for the BTC and close to $1 million for the BCH. Proceeds from the proposed sale will be held until full resolution of the case.

According to court documents presented by the US Attorney’s Office in Utah, the push is being made to capitalize on the premium value of these cryptocurrencies and avoid them losing value to any speculative bubble.

The Bitcoin and Bitcoin cash seizures were made when Aaron Shamo was picked up a year ago by authorities on accusations of selling controlled opioid drugs and counterfeit pharmaceuticals on the illegal dark web. Also, to the cryptocurrency seizure, more than 500,000 pills were seized along with US$1million in cash. Mr Shamo has pleaded not guilty to a dozen charges.

The sale of the seized cache of cryptocurrencies is expected to commence in 2018 at the expiration of a 60-day waiting period. The Treasury Executive Office for Asset Forfeiture is expected to take custody of the proceeds of the sale when this is concluded. Final decisions will then be made on where the money ends up, according to Melodie Rydalch who is the spokeswoman for federal prosecutor’s office. It is customary for proceeds of sales of seized assets to go to the federal agency that investigated the case.

If current prices of Bitcoin and Bitcoin Cash persist to the time of the sale, this will be the largest haul of cash ever made from a cryptocurrency seizure in US history.

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All the talk against the legality of Bitcoin and other cryptocurrencies does not seem to have prevented governments and law enforcement agencies from trading off caches of cryptocurrencies seized from accused or convicted criminals. There have been several high-profile seizures and sales of cryptocurrencies, including the following instances:

  • US Marshals Service auctioned nearly 30,000 bitcoins seized from notorious dark web drug marketplace Silk Road in 2014. They were purchased by Tim Draper, a well-known Silicon Valley venture capitalist.
  • In November 2017, ex-Secret Service agent Shaun Bridges had his 1,400 bitcoins seized by US authorities before his sentencing.
  • In May 2016, Australian authorities announced that it would commence a sale of more than 24,518 Bitcoins that had been “confiscated as proceeds of crime”.
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