Threat of penny auction for the Silk Road coins?

[fancy_pants]

If the FBI requires a limited number of people to show ID and bid in closed auction for the Silk Road coins, then isn't a Nebraska style penny auction a huge threat?  Seems like one or two whales could snap up all the auction spots and pull it off.

http://www.livinghistoryfarm.org/farminginthe30s/money_10.html

Do we know if the FBI has any protections in place to prevent such a catastrophe from happening?

[bryant.coleman]

1. If FBI sells 144K coins, then the value of BTC will collapse.

2. Also, if the FBI sells coins, then that shows that they recognize it as a form of legal asset.

[fancy_pants]

1. If FBI sells 144K coins, then the value of BTC will collapse.

yeah, for about 2 days.

2. Also, if the FBI sells coins, then that shows that they recognize it as a form of legal asset.

Nobody cares what the FBI thinks is a legal asset. They are executive branch, not legislative.

[bryant.coleman]

1. If FBI sells 144K coins, then the value of BTC will collapse.

yeah, for about 2 days.

No one knows. May be for 2 days.... or may be for 2 years.

[2bfree]

1. If FBI sells 144K coins, then the value of BTC will collapse.

2. Also, if the FBI sells coins, then that shows that they recognize it as a form of legal asset.

If BTC collapses I will buy

[Elwar]

It will be years before the case is over.

[hilariousandco]

1. If FBI sells 144K coins, then the value of BTC will collapse.

yeah, for about 2 days.

If they dumped them all very quickly I doubt it'd recover as quickly as that.

[oakpacific]

If they dump, that means they want to make money.

And if they want to make some money, why would they trust this money with a random foreign exchange?

[pedrog]

1. If FBI sells 144K coins, then the value of BTC will collapse.

2. Also, if the FBI sells coins, then that shows that they recognize it as a form of legal asset.

What, you think they are going to sell those coins on MTGox or Bitstamp?

It will probably end up with guys like the Winklevoss twins, who can pay millions to buy those coins in bulk.

[hilariousandco]

1. If FBI sells 144K coins, then the value of BTC will collapse.

2. Also, if the FBI sells coins, then that shows that they recognize it as a form of legal asset.

What, you think they are going to sell those coins on MTGox?

It will probably end up with guys like the Winklevoss twins, who can pay millions to buy those coins in bulk.

They'll be waiting a while if they do  .

I do wonder what sort of person/entity will buy them all? Would the USG split them up into lots or what? Somebody could really fuck with the price of BTC if they bought them all. I've got a feeling DPR is going to have a long legal battle to retain ownership of them, even though I'm sure he'll lose.

[countryfree]

I believe the FBI would sell its BTC at a discount. All goods sell below their their market value at government auctions.

[oakpacific]

I believe the FBI would sell its BTC at a discount. All goods sell below their their market value at government auctions.

Usually, but not always, and those who didn't follow the rules paid dearly for it: http://en.wikipedia.org/wiki/Brown%27s_bottom

[Korbman]

The FBI wouldn't dump the coins to market since that's not how they operate when dealing with seized assets.

BurtW put it best in the other DPR thread:

1) Yes the ownership is or will be, of course, contested.  So they cannot sell them until that is settled.
2) He probably had to turn over the keys in order to contest the ownership and/or to cut a deal.  In any case AFAWK the FBI does control the two addresses.
3) They will not sell them until everything (ownership, guilt, etc.) is all settled and appealed.
4) When they sell them they will not use any exchange, they will auction them off just like they do all other seized assets (gold, cars, boats, houses) through their already established methods and protocols.
5) I expect that they want the most USD they can get (not the least) - as this all goes directly into their budgets.
6) These people are not stupid and (for the most part) they do follow the law or their own internal regulations.  We are not talking about the CIA or NSA here.
7) They do not give a shit as to what Bitcoin is, whither a currency, asset, "digital gold" or whatever.  That is not their job.  They just want the most USD they can get to line their budgets.

I could be wrong.  I would be willing to bet on this but the event (sale of the BTC) is so many years in the future that placing a bet is not very practical.  I wish I could in order to just shut up the hundreds of threads on this same subject every day, day after day.  It gets very tedious.

I guess I could bet "The FBI will not sell or otherwise dispose of the DPR coins in the next year"  but who would be stupid enough to take the opposite side on this bet?

[hilariousandco]

The FBI wouldn't dump the coins to market since that's not how they operate when dealing with seized assets.

BurtW put it best in the other DPR thread:

1) Yes the ownership is or will be, of course, contested.  So they cannot sell them until that is settled.
2) He probably had to turn over the keys in order to contest the ownership and/or to cut a deal.  In any case AFAWK the FBI does control the two addresses.
3) They will not sell them until everything (ownership, guilt, etc.) is all settled and appealed.
4) When they sell them they will not use any exchange, they will auction them off just like they do all other seized assets (gold, cars, boats, houses) through their already established methods and protocols.
5) I expect that they want the most USD they can get (not the least) - as this all goes directly into their budgets.
6) These people are not stupid and (for the most part) they do follow the law or their own internal regulations.  We are not talking about the CIA or NSA here.
7) They do not give a shit as to what Bitcoin is, whither a currency, asset, "digital gold" or whatever.  That is not their job.  They just want the most USD they can get to line their budgets.

I could be wrong.  I would be willing to bet on this but the event (sale of the BTC) is so many years in the future that placing a bet is not very practical.  I wish I could in order to just shut up the hundreds of threads on this same subject every day, day after day.  It gets very tedious.

I guess I could bet "The FBI will not sell or otherwise dispose of the DPR coins in the next year"  but who would be stupid enough to take the opposite side on this bet?

While I generally agree with most of these assumptions, Bitcoin is a brand new entity to them, so I don't know how they'll liquidate it. I'm sure they've had many meetings over this. Regardless, it's gonna draw a lot of media attention and big names when they come to sell either on the market or auction, but I'm sure DPR will drag the legal battle out for a long time - well, unless he gives them up as part of a plea deal, which I reckon he might cos he looks pretty much screwed at the moment either way.

[DeboraMeeks]

IMO I doubt it will happen that way as they too wouldn't want to lose something worth that much for pennies ,Anyway it should take years for the coins to be sold and most of the news regarding that are to lower the price.