Dollar Collapse

Feds Looking to Sell $25 Million Worth of Bitcoins Seized During Silk Road Raid

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Another instance to show the ridiculous nature of civil forfeiture laws  has surfaced. When the feds took down the online marketplace called Silk Road, they seized roughly 30,000 Bitcoins, that were the result of some sort of illicit dealings. On the website, anything was up for sale, in an E-bay like setting. However, since anything was up for grabs, mostly black market items like drugs and guns were sold. The FBI was not too happy with this and shut the entire site down, taking assets with them (mostly Bitcoin).

As I have mentioned before, Silk Road was a great way for drug users and gun buyers to make sure they got quality product because sellers had ratings similar to the way E-bay and Amazon work. Now with the site shut down, everyone is worse off.

The Bitcoins seized in the raid were worth roughly $6 million at the time, but now the price has increased to $850 per bitcoin, making the potential profit for the feds at about $25 million. There are no U.S. Bitcoin exchanges dealing in these kinds of volume of the online currency, so it is expected that the feds will auction them off, much like they would auction a car or house seized from a drug offender.

Ross Ulbricht, who is being charged with being the founder of the Silk Road website, with the alias Dread Pirate Roberts, had 144,000 Bitcoins seized in the raid, but he has filed a claim to these coins. He claims that he is not the Dread Pirate Roberts, but that the Bitcoins are his and that he should get them back.

 

Image: btckeychain, Flickr

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