Category: Auction

Real Estate Giant Holding Live Luxury Home Auction for Bitcoin

Real Estate Giant Holding Live Luxury Home Auction for BitcoinA major Australian real estate group is holding a luxury home auction that can be paid for with two cryptocurrencies. There will be a live auctioneer who will call out bids in BTC. The property owner says he wants to keep as many coins as possible. Also read: Crypto Enthusiasts Unite in 4 Indian Cities […]

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US Marshals Seeks New Recruit to Dispose of Seized Crypto

The U.S. Marshals Is Looking to Hire Someone to Dispose of Seized CryptoThe U.S. Marshals is looking to hire an individual who can manage cryptocurrencies for the Asset Forfeiture Division. Over the last few years, the law enforcement agency has seized thousands of bitcoins from a variety of investigations. Now the Marshals are in need someone who is competent enough to handle matters like wallet creation, managing […]

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Auction of Seized Bitcoin Draws Interest From 110 Countries

Auction of Seized Bitcoin Draws Interest From 110 CountriesWilsons Auctions on Feb. 28 successfully sold off 315 bitcoin seized by the Belgian police from dark web drug dealers. The 24-hour online auction attracted interest from buyers from 110 countries. Also read: Europe’s Regulatory Head Seeks Further Control of Crypto Assets Wilsons Sells Off $420k of Confiscated Crypto Irish auctioneer Wilsons won the contract […]

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Cryptograffiti’s Latest ‘Running Bitcoin’ Portrait Sees Auction Bids of Over $30K

Cryptograffiti's Latest 'Running Bitcoin' Portrait Sees Auction Bids for Over $30KIn roughly three days, on Feb. 7, Cryptograffiti’s latest art auction on Bitify will come to an end. “Running Bitcoin,” a tribute to the legendary cryptographer Hal Finney, currently has a bid of $31,000 at the time of writing. Over the past few months, Cryptograffiti has been creating very interesting pieces and unique auctions that […]

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The Daily: Epic Founder Addresses Fortnite Crypto Rumors, Robinhood Recruiting in London

The Daily: Epic Founder Addresses Fortnite Crypto Rumors, Robinhood Recruiting in LondonIn today’s edition of The Daily we cover reports that Robinhood is working under the radar to hire staff in London for an expansion into the U.K., an auction of seized cryptocurrency in Northern Ireland, and comments from the founder of Fortnite developer Epic Games about rumored cryptocurrency partnerships. Also Read: Mckinsey: Despite Billions of […]

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US Marshals Service Announces Auction of 660 BTC

US Marshals Service Announces Upcoming Auction of 660 BTCThe United States Marshals Service (USMS) has announced an auction of 660 BTC that is scheduled to take place on Nov. 4. Under the auction rules, interested participants must formally identify themselves to the USMS and submit deposits of $200,000. Also Read: Trump Tariffs to Impact Chinese Mining Hardware Manufacturers USMS to Auction Forfeited BTC in […]

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Chainbet Protocol Adds Trustless Multiplayer Bets, Auctions, and Dice Rolls

Chainbet Protocol Adds Trustless Multiplayer Bets, Auctions, and Dice RollsJust recently news.Bitcoin.com reported on the Chainbet protocol created by the developer Jonald Fyookball, designed to add trustless betting features to the Bitcoin Cash network. Following the launch of this concept, the Openbazaar developer Chris Pacia messed around with the idea and completed the first on-chain atomic bet. Now, this week the Chainbet contributors Fyookball, […]

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South Korea Mulls Over How to Cash Out State-Owned Cryptocurrency

South Korea Mulls Over How to Cash Out State-Owned CryptocurrencyThe South Korean government is mulling over how to cash out the cryptocurrency it recently confiscated. While the most likely option is to auction the coins off using the government-owned auction platform, various concerns have been raised. Also read: Yahoo! Japan Confirms Entrance Into the Crypto Space Cashing Out BTC The South Korean government is contemplating […]

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Crypto Auctions: Where Do Arrested Bitcoins End Up?

Seizure of Crypto, what governments and police do with arrested Bitcoins.

From their early days, cryptocurrencies have been associated by many with black markets and illicit activities. Bitcoin’s feature of allowing direct payments to be made from one party to another without the involvement of financial institutions, has been also utilized as a way to avoid institutional controls and settle illegal transactions.

A recent study of University of Technology Sydney (UTS) found that “approximately one-quarter of Bitcoin users and one-half of Bitcoin transactions are associated with illegal activity”

On the other hand, given that there are almost 28.5 mln Bitcoin wallets that hold more than 0.001 BTC and many users own several wallets – with some inactive – the magnitude of this phenomenon is considerably reduced.

Regardless, it is a fact that some illegal activities are done with cryptocurrencies. While it seems quite simple to seize a fiat account or appropriate cash, the nature of cryptocurrencies makes this process much more complicated. Let’s analyze some cases where the government authorities seized cryptocurrency assets due to illegal activities and find out where they end up.

International authorities did not try to underestimate the issue. Europol recently recognized that “three to four bln pounds of criminal money in Europe is being laundered through cryptocurrencies”.

Europol’s Executive Director Rob Wainwright underlined that:

“Proceeds from criminal activity are being converted into Bitcoins, split into smaller amounts and given to people who are seemingly not associated with the criminals but who are acting as ‘money mules’. These money mules then convert the Bitcoins back into hard cash before returning it to the criminals”.

Silk road

In this complicated scenario, international prosecutors reacted by performing some important police operations. One of the most widely known operations was carried out in Oct. 2013 with the closure of Silk Road.

Silk Road was a website that operated as an online black market for selling illegal drugs, and used Bitcoin for settling the deals between site users. After two years of investigation, the US Federal Bureau of Investigation (FBI) arrested the founder and seized over 170,000 Bitcoins, which, at that time, accounted for about 1.5 percent of all the Bitcoins in circulation.

The closure of Silk Road was not the only activity carried out by international authorities to fight against illicit markets around cryptocurrencies. In Nov. 2014, the police of Hesse, Germany, together with Europol and the FBI, operated against illegal online shops Hydra and Silk Road 2.0, which were also engaged in the sale of drugs.

According to law enforcers, these shops were used by approximately 150,000 people, who each month used to buy drugs worth millions of euros using Bitcoins. This operation resulted in the seizure of of 126 Bitcoin from the owners of the websites.

Bulgarian case

But maybe the most impressive operation rolled out by international authorities has been done on May 19, 2017 by the Bulgarian police with the support of the Southeast European Law Enforcement Center (SELEC). The joint forces stopped an organized criminal group that was recruiting corrupt customs officers in many European countries, with the purpose to infiltrate a virus in the customs’ computerized systems and avoid the payment of taxes.

The offenders choose the Bitcoin as a way of investing the money resulted by their activities, considering them rather difficult to be tracked. As a result of the police investigation, an impressive number of 213,519 Bitcoin has been seized.

Cryptocurrency auctions

The seizing of cryptocurrencies has been increasingly the result of international investigations, with examples of this measure taken in many countries including the US, Germany, Bulgaria and UK. National authorities have started thinking about what to do with the seized coins. The US was one the first countries to approach the issue and started organizing auctions selling the appropriated cryptocurrencies.

The United States Marshals Service (USMS), a federal law enforcement agency within the U.S. Department of Justice, auctioned different lots of Bitcoins catched by different state authorities. One of the most recent sale has been held on Jan. 11, 2018 where the USMS auctioned a total of 3,813 Bitcoin in three different lots respectively of A) 2,500; B) 500; C) 813.

Given the value of the Bitcoin at approximately 11,500 USD the closing day of the auction (Jan. 19), the result granted an amount of around $44 mln in revenue to the state. Similarly, in Germany, the authority of the state of Hesse hope to gain millions from the sale of the 126 seized Bitcoins.

What about Bulgaria? According to calculations, the value of the 213,000 seized Bitcoins would be enough to pay off one-fifth of Bulgaria’s national debt. At present, the proportion would be a little different as the debt of the country is around $16 bln whereas the value of that pot of bitcoins would be around $2 bln.

However today it’s not clear whether or not the authorities really possess these coins. The head of Bulgarian Special Prosecutor’s Office, Ivan Geshev, recently said that the Prosecutor’s Office and the Interior Ministry had not seized Bitcoins.

More auctions to come

The fight against the misuse of funds for financing black markets and illicit activities has to tie up more its activities towards the use of crypto currencies. Given the extreme rapidity through which cryptocurrencies can be moved between wallets, states, and continents, a stronger collaboration between international authorities would also be necessary to conduct special operations.

Seizing and then auctioning cryptocurrencies, in case of a confirmed illicit use, could be both a strong deterrent for criminal users and, in some instances, a good source of income for state revenues.                

Uniformity between the various international authorities on the approach regarding the auctioning procedures could be a desirable development, in order to guarantee a fair and transparent process around the redistribution of the cryptocurrency assets. A rigorous process of identification could also guarantee that the participants are not connected to any illicit activities, and to avoid the process to start over again.

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