4000+ Bitcoin Up for Auction

[Krislaw]

The U.S Marshal service has decided to put approximately 4,040 Bitcoin siezed from criminals, civil and administrative cases on an auction.

Image Source: Crypto Coin Trader Facebook Group
What bothers me right now is
- What if the winner decides to dump right away?
- Why ask for a 200,000$ deposit?
- Does the proceed go to people after the auction?
- Why not sell an asset worth 40mln dollars at current price and use the money to pay depts?

[squatz1]

This is something that the government does every so often for seized bitcoin.The auction is for about 4000 bitcoin, as you said before, which is why it makes sense that they want a deposit of about $200,000 -- as the full price of the auction (when making each bitcoin worth 9000) is approx $36 million.

It wouldn't make sense for the person to dump immediately, as the amount of people in this auction is going to drive up the price of bitcoin close to or above market value -- so the person bidding wouldn't make any money if they were to sell immediately. An auction like this also helps the buyer acquire a large deal of bitcoin, without having to use some sort of exchange (which probably wouldn't be able to support this volume) or use an OTC exchange which would probably take out a good amount of fees.

With your question regarding why don't they just sell the crypto at current prices -- they can't, no exchange would be able to support that volume. There's also probably some sort of regulation forcing the government to sell the crypto in some sort of auction. Anyone could buy it as well, Coinbase and Gemini could try to scoop it for below market price and sell it on their own exchange.