U.S. Government to Sell Bitcoin, Bitcoin Cash Seized from Cyber Criminal
A U.S. federal judge in Utah has approved the auction of hundreds of units of bitcoin and bitcoin cash seized from a dark web dealer, CCN has learned. The sale will be part of a larger liquidation of assets belonging to convicted criminal Aaron Michael Shamo.
There were 513 units of bitcoin and 512 bitcoin cash tokens in Shamo’s possession at the time of his conviction. All of them will be auctioned off, along with two automobiles. At current prices, the sale will amount to roughly $8.5 million.
Shamo was convicted on May 31, 2017 along with fellow dark web operators for several drug-related offences, including trafficking and conspiracy to commit money laundering.
The official court document released by Utah district judge Dale Kimball indicated that it was too costly to store the seized cryptocurrencies for a prolonged period. Based on the court documents, storing the coins cost taxpayers $465 per month.
The decision to liquidate the coins comes amid growing concerns over price volatility, with government officials seeking an imminent sale of the cryptocurrencies before they lose their value. In October it was disclosed that the U.S. government lost nearly $2.4 billion on the sale of 144,336 bitcoins when the cryptocurrency was priced at just $336 a unit.
According to the official court document:
“The vehicles [bitcoin and Bitcoin Cash] have been seized and are in the custody and control of the United States Marshals Service. Every month, the USMS is accruing $465/month in storage fees for these vehicles. The total expenses for these two vehicles currently is $5,010.70. The BTC and BCH have been transferred to a Government wallet. Due to the volatile market for cryptocurrencies, the BTC and BCH risk losing value during the pendency of the forfeiture proceedings.”
Once considered the exclusive domain of dark web criminality, bitcoin has catapulted into the mainstream over the last 12 months. The price explosion has drawn the attention of various levels of government, from the Securities and Exchange Commission (SEC) to the District Court system.
Although bitcoin remains a popular cryptocurrency in the criminal underworld, altcoins with stronger privacy features are gaining prominence. Coins such as Monero, Zcash and Ethereum are becoming more popular among cyber criminals. Zcash appears to have the best privacy protection among the three, which analysts say could generate higher adoption among criminals in the future.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.