News

FBI will cash out Bitcoin cache

January 29, 2014

Last fall the FBI shut down the notorious Silk Road black market website, arrested its founder for money laundering (among other charges), and confiscated the company's assets, including nearly 174,000 bitcoins. Now the bureau has been granted permission to sell off a portion of the digital currency.

According to a report by Finextra, the FBI will be allowed to sell approximately 29,655 bitcoins it found on a Silk Road server in the September raid — total value around $28 million. The United States Attorney for the Southern District of New York, Preet Bharara, approved the forfeiture, green-lighting the sale.

Silk Road founder Ross Ulbricht is contesting the Fed's seizure of 144,336 bitcoins discovered on computer hardware that he owned. That cache is valued at more than $130 million. Ulbricht has asserted in court documents that he is the rightful owner of the currency.

According to the Finextra article, a sell-off of Silk Road assets by the FBI would flood the Bitcoin market, potentially reducing the value of current owners' holdings. As yet, no date has been set for the sale.

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