Guess who's now a big owner of Bitcoins? The feds.
About $28 million worth of the virtual currency, at today's prices, was forfeited this week in the Silk Road money laundering case per order of U.S. District Judge J. Paul Oetken, the U.S. Attorney's office in New York announced.
The FBI on Thursday seized the 29,655 Bitcoins and the Silk Road hidden website as part of the civil forfeiture action filed in federal court in Manhattan on Sept. 30, U.S. Attorney Preet Bharara said. The virtual coins apparently will be the first ever to be auctioned by the government.
The fate of another $130 million worth of the virtual currency seized in the same case remains up in the air, the prosecutor's office added.
The Silk Road website's owner – Ross William Ulbricht – has been charged with one count of narcotics conspiracy, one of count of conspiracy to commit computer hacking, and one count of money laundering conspiracy.
The case has been pointed to as evidence the Bitcoins and other virtual currency can be prime avenues for money laundering by drug dealers and terrorist organizations.
“These Bitcoins were forfeited not because they are Bitcoins, but because they were, as the court found, the proceeds of crimes,” Bharara said in a statement.
“With today's forfeiture of $28 million worth of Bitcoins from the Silk Road website, a global cyber business designed to broker criminal transactions, we continue our efforts to take the profit out of crime and signal to those who would turn to the dark web for illicit activity that they have chosen the wrong path,” the federal prosecutor said.
The government said it also seized an additional 144,336 Bitcoins (worth more than $130 million) found on computer hardware belonging to Ulbricht, but he has filed a civil claim on that action, contesting that forfeiture.
Finextra reported Friday that the FBI has yet to give a timeline for the sale of the bitcoins and that a fast sell-off of the virtual currency could lead to a drop in prices, creating some fear among Bitcoin holders.
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