$37,000,000 in Bitcoin (BTC) for Sale by US Government

[plvbob0070]

Bitcoin auction has been a thing for crypto investors. Last November 2018 when the last auction happened. The amount of Bitcoin in the upcoming auction was acquired through criminal and illegal cases.

The registration for the big auction is now open for those who are located in the US, and can join the said event if they were able to register on time. February 12 is the deadline while the online auction will happen on February 18, 2020, from 8 am - 2 pm EST.

The winner will be notified through email, the same date with the auction. The auction is oper for everyone as long you have the capability of meeting the required deposit amounting to $200,000.

The federal law enforcement agency will put an estimated 4,040 Bitcoin or an amount of (current value is $38,563,173).

Source:
https://dailyhodl.com/2020/02/03/37000000-in-bitcoin-btc-for-sale-by-us-government-registration-for-online-auction-begins/

Here's the link to US Marshals Service where you can see more and additional information regarding the auction.
https://www.usmarshals.gov/assets/2020/febbitcoinauction/

We all heard of Bitcoin auction even for once right? It's usually done by the government whenever there's a bitcoin involvement. I know not everyone does this but after 2018, here's a chance for those who do auctions.

Auction is not my thing, of course, I don't have that much money needed to meet the requirements. It's is really indeed for wealthy people only. I can only buy bitcoin through exchange depending on the amount of money I can invest. Since I lack knowledge regarding this, I have questions, what can you say about buying Bitcoin that was used in doing illegal activities? Does it have any differences with the usual thing we do? Does it have lesser value because it was from illegal activity or does it cost higher because of the bidding? And what does the government do after receiving money from the auction? Do they use it in a proper way or simply, do they add it to the government's asset?

Sorry for the multiple questions but I'm just curious about it. Also a disclaimer, I'm not posting this to promote the site, not the event, I just want to share the news with everyone.

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[YuginKadoya]

Pretty sure the government would have their own reason needing money from an Auction but that amount of Bitcoin was pretty sick, and just like you, I don't have a thing for Bidding as well I don't have the knowledge in doing so, And the financial back-up to register, I guess if this Bitcoin would be bought by some normal consumer those Bitcoin will surely return in Circulation and I guess even though the Bitcoin was from some illegal transaction Bitcoin will still be Bitcoin whatever you think about it, I guess it is OK for me if I am the one who won that amount of Bitcoin the most important thing here is that 4040 BTC will be in good hands.

[rdbase]

Put up a thread about this auction of 4040BTC when heard about it yesterday and if it will affect the current price https://bitcointalk.org/index.php?topic=5223241.0
Feel free to post your thoughts if it will cause another bull run like back in 2017 when there was a similar auction by the US government back in 2016.

[gentlemand]

I have questions, what can you say about buying Bitcoin that was used in doing illegal activities? Does it have any differences with the usual thing we do? Does it have lesser value because it was from illegal activity or does it cost higher because of the bidding? And what does the government do after receiving money from the auction? Do they use it in a proper way or simply, do they add it to the government's asset?

Tim Draper, a major VC investor, bought 30,000 coins seized from the Silk Road. I'm sure he would have no trouble at all moving them on for just the same price as any other coin. They've basically been 'cleaned' by passing through government hands.

This lot don't release their sold prices. From hints from failed bidders it's usually slightly below the market rate but not significantly. It all depends on who turns up on the day to bid. The UK police recently did a public auction of seized BTC and the prices were more than the headline rate on average with a few exceptions where people clearly didn't understand the difference between BTC and BSV etc and radically overpaid.

https://thenextweb.com/hardfork/2019/09/27/uk-police-bitcoin-cryptocurrency-criminally-seized-auction-ethereum-ripple-satoshi-vision/

Dunno where the money would go. Maybe back into their own budget. Who cares?

[squatter]

I have questions, what can you say about buying Bitcoin that was used in doing illegal activities? Does it have any differences with the usual thing we do? Does it have lesser value because it was from illegal activity or does it cost higher because of the bidding? And what does the government do after receiving money from the auction? Do they use it in a proper way or simply, do they add it to the government's asset?

Tim Draper, a major VC investor, bought 30,000 coins seized from the Silk Road. I'm sure he would have no trouble at all moving them on for just the same price as any other coin. They've basically been 'cleaned' by passing through government hands.

This lot don't release their sold prices. From hints from failed bidders it's usually slightly below the market rate but not significantly.

That only proves that failed bidders bid below the market rate. If anything, these bitcoins carry a premium for the same reason that "tainted bitcoins" carry a discount.

The fact that Tim Draper won every single lot in that Silk Road auction suggests he paid a premium.

And what does the government do after receiving money from the auction? Do they use it in a proper way or simply, do they add it to the government's asset?

According to the USMS website:

Proceeds generated from asset sales are used to operate the [Asset Forfeiture] program, compensate victims and support various law enforcement efforts.

[gentlemand]

That only proves that failed bidders bid below the market rate. If anything, these bitcoins carry a premium for the same reason that "tainted bitcoins" carry a discount.

The fact that Tim Draper won every single lot in that Silk Road auction suggests he paid a premium.

Who knows? I do remember keeping a close eye out and everyone who spoke of their bid said theirs was under market. Can't remember how many said anything but it was a few.

It doesn't really mean anything. There'll be good days and bad days when the buyers don't show up in the same numbers. It's not much of a reflection of the market elsewhere. There's only so many buyers at this level and only so many who bothered to qualify.

[fillippone]

Quoting here a post of mine because of context:

Billionaires Lick Their Lips As U.S. Marshals Auction Off Over 4,000 Bitcoin

• U.S. Marshals will auction off approximately $37 million worth of bitcoin on February the 18th.
• Officials could have made ten times their money if they had HODL’d the leading cryptocurrency.
• Billionaire bitcoin investor Tim Draper is likely lining up once again to bid on the auction.

This is what I would do if I were Tim Draper (who's already sitting on 40,000 BTC

• I would buy all the bitcoin
• I would declare a boating, hacking, kebab accident
• I would send all the money to a mixing service
• In your face g-men! Bitcoin fixes that!

Yes.
I would do that just because.
And hate for chainalaysis (and all the subsequent actions and consequences) is growing big on me.
(see my message in signature: [PAXOS+COINJOIN]Your privacy is a threat to exchange business?#deletepaxos.

[Artemis3]

That only proves that failed bidders bid below the market rate. If anything, these bitcoins carry a premium for the same reason that "tainted bitcoins" carry a discount.

The fact that Tim Draper won every single lot in that Silk Road auction suggests he paid a premium.

Who knows? I do remember keeping a close eye out and everyone who spoke of their bid said theirs was under market. Can't remember how many said anything but it was a few.

It doesn't really mean anything. There'll be good days and bad days when the buyers don't show up in the same numbers. It's not much of a reflection of the market elsewhere. There's only so many buyers at this level and only so many who bothered to qualify.

What is the point of bidding if you do it at market rate or above? For that you can simply go to an exchange...

If i had the money, i would do the same: Bid at lower price than market, else its pointless.

[gentlemand]

What is the point of bidding if you do it at market rate or above? For that you can simply go to an exchange...

If i had the money, i would do the same: Bid at lower price than market, else its pointless.

Slippage. That's the whole reason many go to OTC trades.

No way could you obtain several thousand BTC in one go without risking driving the market batty. You could try it over a few days but even then others may notice strong and sustained buying and raise their sells.

Paying slightly above market for a one time buy could save you money vs buying on the open market.

[Dabs]

If I were Tim Draper, I would do something else ... I'd work with Wasabi or JoinMarket to create the biggest and longest sequence of consecutive Coin Joins to mix my 40,000 BTC with everyone else's on that day. It will be a day scheduled ahead of time so the most number of participants can join in. Hopefully get a whole bunch of whales and others and even the "traditional" mixers ... I mean, who wouldn't want their coins linked to "clean virgin whitelisted gov" coins ...

I see, 40k BTC, going to get mixed in with an additional 100k from all over the place, using several rounds of Coin Join. Going to be awesome when Chainalysis says everyone's coins are clean because they all came from the auction.

[Happy Waters]

What is the point of bidding if you do it at market rate or above? For that you can simply go to an exchange...

If i had the money, i would do the same: Bid at lower price than market, else its pointless.

Slippage. That's the whole reason many go to OTC trades.

No way could you obtain several thousand BTC in one go without risking driving the market batty. You could try it over a few days but even then others may notice strong and sustained buying and raise their sells.

Paying slightly above market for a one time buy could save you money vs buying on the open market.

I love a good bargain, and your logic is solid during flat and Bull markets. In a bear market you can find plenty of bargains without help from the Feds.

[gentlemand]

I love a good bargain, and your logic is solid during flat and Bull markets. In a bear market you can find plenty of bargains without help from the Feds.

A beary market would be keen to latch on to sustained buying too. Everyone looks for that glimmer of hope and will grab it if it arrives.

And there's a class of buyer who'll regard a government endorsed sale as more desirable than a regular one. If people are willing to pay a premium for freshly mined coins, these ones have an attractive stamp of authenticity too.  

[fillippone]

<...>


What is the point of bidding if you do it at market rate or above? For that you can simply go to an exchange...

If i had the money, i would do the same: Bid at lower price than market, else its pointless.

I think it would be the same concept behing people payin more for coinbae UTXO's: to some actors having "clean" coins is something worth a premium over market rate.
These coins would of course have an "History" but whatever happened before the auction transaction would be forgiven thanks to U.S. Marshal.

Of course fungibility, once again, is major limit in bitcocin protocol, and needs to be fixed as soon as possible (via shnorr/taproot et al. ) or is something will keep distorting markets.

If I were Tim Draper, I would do something else ... I'd work with Wasabi or JoinMarket to create the biggest and longest sequence of consecutive Coin Joins to mix my 40,000 BTC with everyone else's on that day. It will be a day scheduled ahead of time so the most number of participants can join in. Hopefully get a whole bunch of whales and others and even the "traditional" mixers ... I mean, who wouldn't want their coins linked to "clean virgin whitelisted gov" coins ...

I see, 40k BTC, going to get mixed in with an additional 100k from all over the place, using several rounds of Coin Join. Going to be awesome when Chainalysis says everyone's coins are clean because they all came from the auction.

Yes, basically my idea, only better explained!

[The Sceptical Chymist]

The auction is oper for everyone as long you have the capability of meeting the required deposit amounting to $200,000.

Eh....yeah, I guess I won't be partaking in this particular auction.  Nor would I really want to be buying bitcoin from the US government.

What is the point of bidding if you do it at market rate or above? For that you can simply go to an exchange...

I agree--it's not like there should be a premium for this particular batch of bitcoins.  They're not collectibles.  And I'm sure the government is going to make a nice profit from this, basically legally stealing from criminals.  Meanwhile the rest of us are taxed to death.  Grr.

No way could you obtain several thousand BTC in one go without risking driving the market batty. You could try it over a few days but even then others may notice strong and sustained buying and raise their sells.

I'd say if you were going to buy that amount of bitcoin, you'd have the patience to spread the buy orders out over more than a few days.  People with lots of money do basically the same thing in the stock market all the time.  It's certainly possible to buy thousands of bitcoins without moving the market much--I think it would just take patience and tons of cash.

[buwaytress]

@Artemis, ask someone who's actually bought bitcoin at an auction. Some of the notables in this forum (well ok I only know one actually) actually got most of his early stash cheap from a similar auction. Cut price.

Although, the last auction I watched in the UK (also seized crypto sold by police) actually sold many of their lots for over market price. Guess some people still don't know how to exchange or P2P...

[squatter]

That only proves that failed bidders bid below the market rate. If anything, these bitcoins carry a premium for the same reason that "tainted bitcoins" carry a discount.

The fact that Tim Draper won every single lot in that Silk Road auction suggests he paid a premium.

Who knows? I do remember keeping a close eye out and everyone who spoke of their bid said theirs was under market.

Again, that just proves that the losing bidders bid too low. That doesn't indicate that government-auctioned bitcoins sell for a discount.

Has there ever been a single case of government-auctioned bitcoins where the winner(s) claimed to have bought under market? I doubt it. That's probably another indication that they actually sell at a premium.

This really boils down to common sense. Why would virgin bitcoins warrant premiums up to 30%, but government-approved bitcoins warrant a discount?

[pixie85]

@Artemis, ask someone who's actually bought bitcoin at an auction. Some of the notables in this forum (well ok I only know one actually) actually got most of his early stash cheap from a similar auction. Cut price.

Although, the last auction I watched in the UK (also seized crypto sold by police) actually sold many of their lots for over market price. Guess some people still don't know how to exchange or P2P...

I don't think that people paid premium on that auction because they're stupid and don't know what the exchange price is. They did the same exact thing when silk road money went on auction.

We all know how shady some exchanges are. They sell your data or leak it, they manipulate prices, fake volume, they get hacked, they get seized, they go bankrupt, they launder dirty money. When you buy at a government auction you get all the paperwork. You get legit bitcoin that nobody will seize from you and you get it in person right onto your hardware wallet if that's how you like it. People will pay premium for this.

[bgaf]

Are there special tax rules when buying these coins directly from the government? That could be a massive incentive for the bidders than doing large otc orders on large exchanges.

I'm thinking the same way too. There's a chance that those bidders will received something special or any privilege from winning the bids of btc. I doubt there is a trader who will join this affair instead they will wait on market price to crash and bid their buy orders there.

Do you think that this 4k btc also drive the btc price on its current level? Somehow btc is increasing since the Us government auction it last February 5.

Also I wonder why would US bid these bitcoins anyway for?

[bryant.coleman]

I have questions, what can you say about buying Bitcoin that was used in doing illegal activities? Does it have any differences with the usual thing we do? Does it have lesser value because it was from illegal activity or does it cost higher because of the bidding? And what does the government do after receiving money from the auction? Do they use it in a proper way or simply, do they add it to the government's asset?

Tim Draper, a major VC investor, bought 30,000 coins seized from the Silk Road. I'm sure he would have no trouble at all moving them on for just the same price as any other coin. They've basically been 'cleaned' by passing through government hands.

This lot don't release their sold prices. From hints from failed bidders it's usually slightly below the market rate but not significantly. It all depends on who turns up on the day to bid. The UK police recently did a public auction of seized BTC and the prices were more than the headline rate on average with a few exceptions where people clearly didn't understand the difference between BTC and BSV etc and radically overpaid.

https://thenextweb.com/hardfork/2019/09/27/uk-police-bitcoin-cryptocurrency-criminally-seized-auction-ethereum-ripple-satoshi-vision/

Dunno where the money would go. Maybe back into their own budget. Who cares?

Tim Draper is the same guy who claimed that BTC will be eventually having an exchange rate of $250,000 per coin (the deadline he gave for achieving that level was 2022). The price that he paid for the 30,000 coins was never disclosed, but it was rumored that he (as well as the others who purchased Silk Road coins) paid a price which was higher than the prevailing exchange rate at that time. One reason given for the higher price was that the coins are now 100% clean, since they have been passed through the hands of the US Marshals.

[slaman29]

That's a lot of millions of dollars worth of bitcoin, I wonder why they didn't decide to at least try keep a little of it. Can't remember now but isn't there also a government somewhere with a lot of stash of seized btc that they supposedly haven't sold yet? Would be incredible revenue if the moonshot happens for btc!