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For Sale By The U.S. Marshals: 3,813.0481935 Bitcoins (Approximately)

PLEASE READ ALL INSTRUCTIONS CAREFULLY.

Back in 2014 and 2015, the U.S. government held three Bitcoin auctions in connection with the prosecution of Silk Road founder Ross Ulbricht.

Venture capitalist Tim Draper won the 2014 auction which drew some 45 bids from names including Barry Silbert and Coinbase.

Ulbricht challenged the legality of the forfeiture but ultimately dropped the case allowing the government to collect the proceeds from the auctions.

 

Ultimately, it kind of seems like the government should have thought twice about the firesale, because they sold 144,336 Bitcoin for roughly $48 million. That’s just “slightly” less than the $2.9 billion (with a “b”) they would have fetched had the Justice Department waited and sold them when Bitcoin peaked late last year.

Asked by CNBC whether they regretted missing out on what, when the inquiry was made back in October, was a $600 million payday, the U.S. Marshals said they “don’t look for investment opportunities and there was no reason for them to hold onto the bitcoins.”

Well, having learned exactly nothing from that experience, the Marshals are going to go ahead and auction off another 3,813 Bitcoins seized in connection with all manner of federal, civic and administrative cases.

marshals

If you’ve got $200,000 to put up as a deposit you can participate in the auction which will take place over six hours on January 22. Bidder registration opened Thursday and the deadline is this coming Friday.

So you know, go ahead and put your bids in before these idiots decide to maybe hang on to their Bitcoin stash instead of selling it for what, in retrospect, will amount to pennies on the dollar.

***********************

Via U.S. Marshals Service

PLEASE READ ALL INSTRUCTIONS CAREFULLY.

FAILURE TO COMPLY WITH ANY OF THE FOLLOWING INSTRUCTIONS WILL RESULT IN DISQUALIFICATION FROM THIS SEALED BID AUCTION.

This sealed bid auction is for approximately 3,813.0481935 bitcoins (structure details below). The required deposit to participate in this auction is $200,000.00 USD.

These bitcoins were forfeited in various federal criminal, civil and administrative cases, including:

  • United States v. Approximately 85.6971800 Bitcoins (Dakota Hower), District of Idaho (Case No. 17-00288)
  • United States v. Aaron Michael Shamo, et al, District of Utah (Case No. 16-00631)
  • United States v. Daniel Robert Summerfield, Eastern District of California (Case No. 17-00135)
  • United States v. Alexander Konstantinovich Tverdokhlebov, Eastern District of Virginia (Case No. 17-00009)
  • FBI Administrative Forfeiture of Various Bitcoin from Drew Callahan
  • USPIS Administrative Forfeiture of 64.99255187 Bitcoins from wallet XXXXfVLXA
  • USPIS Administrative Forfeiture of 5.80090739 Bitcoins from wallet XXXXJngi4
  • USPIS Administrative Forfeiture of 11.6279 Bitcoins from wallet XXXXJPWT7
  • USPIS Administrative Forfeiture of 53.05495044 Bitcoins from wallet XXXX4z96W
  • Department of Homeland Security, United States Customs and Border Protection, Case Numbers; 2016330700028201, 20161603000009401, 201110100007601, 2017390100065401, 2017110100022201, 2017390100068001, 2017390100065401, 2017390100014601

This sealed bid auction for approximately 3,813.0481935 bitcoins separated into three series: Series A (5 blocks of 500 bitcoins), Series B (5 blocks of 100 bitcoins) and Series C (1 Block of approximately 813.0481935 bitcoins). You will not have the opportunity to view other bids. You will not have the opportunity to change your bid once submitted.

Series Bitcoins per Block Blocks Available Total Bitcoins Available in Series Required Deposit
A 500 5 2,500 $200,000
B 100 5 500 $200,000
C 813 1 813.0481935 $200,000
Total 3,813.0481935

Phase I: Bidder Registration
Opens: Thursday, January 11, 2018
Deadline: Noon EST, Friday, January 19, 2018

All interested parties must first register with the USMS. You are not eligible to submit a bid or otherwise participate in this auction unless you have submitted all required documents and have received confirmation from the USMS that you are an eligible bidder. Any registration documents received after the deadline will not be considered. Registration documents that were submitted in prior USMS auctions are not valid for this auction – you must submit new registration documents to be considered for this auction.

Required Registration Items:

  • A manually signed pdf copy of the Bidder Registration Form
  • A copy of a Government-issued photo ID for the Bidder (or Control Person(s) of Bidder)
  • Deposit in US Dollars sent by Electronic Funds Transfer (EFT) originating from a bank located within the United States
  • A copy of the EFT transmittal receipt

You must deliver the Required Registration Items by email to USMSBitcoins@usdoj.gov. The USMS will notify all bidders about their eligibility to participate in the auction by email no later than 5:00 PM EST on Friday, January 19, 2018. If the USMS determines that you are not an eligible bidder, the deposit funds will be returned, and you will not be eligible to participate in the online auction.

The deposit of the winning bidder will be retained by USMS and credited towards the purchase price. If the winning bidder fails to close on the transaction through no fault of the USMS, the winning bidder will irrevocably forfeit the deposit to the USMS. The deposit of any bidder whose bid is not selected as a winning bid will be returned to the original account from which the deposit was received. We will begin processing return of deposits immediately following the close of the bitcoin transaction(s). We hope to process all returns within five (5) business days, but high participation may result in slightly longer return times.

Bidder Registration Form:

Bidders must register to participate in this auction. One registration form allows you to bid on multiple blocks from Series A, Series B, and Series C at the same per bitcoin price, but does not allow you submit multiple bids at varying per-bitcoin prices. If you wish to have the ability to bid multiple prices on multiple blocks, you will need to submit additional registration forms and additional deposit funds. The following examples are provided for your convenience:

Example 1: Bidder wants to purchase three (3) blocks of Series A for the same per-bitcoin price (e.g. $X per bitcoin for 1,500 Series A bitcoins). Bidder should submit ONE registration form with a $200,000 deposit, and will use ONE Bid Form to bid on all three Series A blocks.

Example 2: Bidder wants to purchase three (3) blocks of Series A and one (1) block of Series B for the same per-bitcoin price (e.g. $X per bitcoin for 1,500 Series A bitcoins, and $X per bitcoin for 100 Series B bitcoins). Bidder should submit ONE registration form with a $200,000 deposit, and will use ONE Bid Form to bid on all four blocks at the same per-bitcoin price (for both Series A and Series B).

Example 3: Bidder wants to purchase two (2) blocks of Series A and one (1) block of Series B at different prices (e.g. $X per bitcoin for 500 bitcoins from Series A, $Y per bitcoin for 500 bitcoins from Series A, and $Z per bitcoin for 100 bitcoins from Series B). Bidder should submit THREE separate registration forms, and a total deposit of $600,000 (or $200,000 for each registration), and will use THREE Bid Forms, one for each separate per-bitcoin bid price. Note that each registration allows the bidder to submit the same per-bitcoin price bid for Series A, Series B and Series C.

Bid Deposit:

Please follow the EFT instructions below to submit a bid to the USMS.

The USMS accepts EFTs via Automated Clearing House (ACH) Credit or Fedwire. Please contact your financial institution to determine which method is most appropriate.

ACH Credit Instructions

Standard Entry Class Code CCD
Transaction Code* 22
Receiving DFI Identification (ABA Routing Number) 051036706
DFI Account Number 15180001
Amount $[Enter deposit amount]
Receiving Company Name U.S. Marshals Service
Comments Bitcoin Auction

*ACH debits are not permitted to this ABA routing number. All debits received will be automatically returned.

Fedwire Instructions

ABA Number 021030004
ALC 15180001
  Physical Address Federal Reserve Bank of New York
33 Liberty Street
New York, NY 10045 
Amount $[Enter deposit amount]
Wire Comments Bitcoin Auction

Phase II: Online Auction Period
Date: Monday, January 22, 2018, from 9:30 AM EST to 3:30 PM EST

Only eligible registered bidders who have received an official Bid Form from the USMS may participate in the online auction.

In order for your bid to be considered by the USMS, you must send via email to USMSBitcoins@usdoj.gov a signed pdf copy of the Bid Form within the online auction period window, which extends from 9:30 AM EST until 3:30 PM EST on Monday, January 22, 2018. Bids received before or after the online auction period will not be considered. Bids that do not conform to the instructions will not be considered.

The prevailing bids will be determined by the following criteria:

  1. The eligible bidder who offers the highest price will be the prevailing bidder;
  2. If there are multiple bids at the highest price, the first bid received will prevail; and
  3. If a winning bidder defaults, the next highest bidder will be declared the winning bidder.

Bids are considered open until the USMS has declared that the bid is not a winning bid.

Phase III: Award and Sale Close 

No later than 5:00 P.M. EST on Monday, January 22, 2018, the USMS will notify the winning bidder that their bid has been selected. The winning bidder must send the purchase price funds (less the deposit amount) by a wire transfer originating from a bank located within the United States and provide a wire transmittal receipt to the USMS by 2:00 P.M. EST, on Tuesday, January 23, 2018. It is the responsibility of the winning bidder to understand their bank’s deadline for initiating wire transfers in order to ensure that the domestic wire transfer is initiated and a wire transmittal receipt provided to the USMS by the deadline. Failure to provide the USMS with a copy of the wire transmittal receipt by the deadline will result in disqualification, forfeiture of the deposit, and award to another bidder.

No bitcoin transfer will be made until the USMS has confirmed receipt of all purchase funds. The bitcoin transfer process will begin immediately following receipt of purchase funds. The winning bidder will be given private instructions related to the transferring of the bitcoins.

***

TERMS OF SALE

  • Payment. The bid must be an all cash offer. Bids that are contingent on financing terms of any kind will not be considered. All bids must be made in U.S. dollars.
  • Receipt of Funds. The winning bidder should be prepared to wire purchase funds to the USMS by 2:00 PM EST on Tuesday, January 23, 2018. If the winning bidder does not provide the USMS with a copy of the wire transmittal receipt by this date and time, the bidder will be disqualified and another winning bidder will be selected. FAILURE TO INITIATE A WIRE TRANSFER AND PROVIDE THE USMS WITH A COPY OF THE WIRE TRANSMITTAL RECEIPT BY TUESDAY, JANUARY 23, 2018, AT 2:00 PM EST WILL RESULT IN FORFEITURE OF THE BIDDER’S DEPOSIT. The winning bidder is responsible for any wire transfer fees associated with his or her payment.
  • Bitcoin Transfer. The USMS will not transfer any bitcoins until it has confirmed receipt of purchase funds from the buyer. The USMS will not transfer bitcoins to an obscene public address, a public address apparently in a country restricted by the Office of Foreign Assets Control (OFAC), a public address apparently associated with terrorism, other criminal activities, or otherwise hostile to the United States.
  • Transfer Fees. Any transfer fees associated with the transfer of the bitcoins will be paid by the buyer. The buyer will be given an opportunity to select the amount of fees charged in the transfer.
  • Block Transactions. The USMS will only sell and transfer the bitcoins in a single block to a single bitcoin address.
  • Bidder Qualification. The USMS reserves the right to reject any bid for any reason whatsoever. The USMS reserves the right to sell all, some or none of the bitcoins at auction.
  • Bill of Sale. The winning bidder will receive a signed Bill of Sale from the United States Marshals Service.

ADDITIONAL INFORMATION

  • The USMS does not make any representations or warranties regarding Bitcoin.
  • Questions related to the auction process should be directed to USMSBitcoins@usdoj.gov. The USMS in its discretion will respond directly to email communications or will post additional items to the “Frequently Asked Questions” section below. The USMS will not respond to any telephone inquiries from the general public. The USMS will not answer any questions regarding (a) the associated criminal or civil cases that resulted in the seizure of the bitcoins being auctioned, or (b) Bitcoin characteristics, uses or value.
  • The USMS will not sell to any person in violation of USMS Policy 13.7, Persons Prohibited from Purchasing Forfeited Property.

FREQUENTLY ASKED QUESTIONS

  • How did the USMS get the authority to sell these bitcoins?

The USMS authority to dispose of forfeited property can be found at 28 C.F.R. 0.111(i).

  • Can a foreign citizen participate in the auction?

Yes. However, bids will not be accepted from any person or entity that appears on the U.S. Treasury Department’s Office of Foreign Assets Control list of “Specially Designated Nationals.”
All deposit and purchase funds must be received from a U.S. bank. No exceptions.

  • Can I form a syndicate of buyers to participate in the auction?

Yes. The person or entity that registers to bid on this auction must satisfy all registration requirements, including certifying that the bidder is not acting in concert with the defendants or defendant entities (See USMS Policy 13.7, Persons Prohibited from Purchasing Forfeited Property). This certification extends and applies to all members of a syndicate. The primary bidder should perform whatever due diligence the bidder feels is necessary in order to comfortably make that certification.

  •  How much money do I need to make a bid?

You are responsible for ensuring that you have enough available funds to cover your bid. If you are selected as a winning bidder, you must initiate a wire transfer and provide the USMS with a copy of the wire transmittal receipt by Tuesday, January 23, 2018, at 2:00 PM EST. Failure to initiate a wire deposit in the full amount of your bid, less the initial deposit, will result in forfeiture of your deposit.

  •  Is there a reserve price for this auction?

There is no disclosed reserve price for this auction. The United States Marshals Service reserves the right to sell some, all or none of the bitcoins for any reason.

  •  What information about the auction process or results will the USMS release?

The USMS will contact the winning and losing bidders directly. The USMS will not proactively release any information to the general public pertaining to the auction process or results, except for the number of registered bidders and the number of bids received.

  • How will my deposit be returned if I am not a winning bidder?

The USMS will initiate the return of losing bid deposits within (5) business days following the transfer of bitcoins to the winning bidder.

Losing bid deposits will be first returned (i.e., refunded) to the financial institution and account from which they originated.

If the USMS encounters difficulty (e.g., the wire cannot be rejected) then you will be required to complete and submit a Vendor Request Form. The Vendor Request Form will give you the option to receive your return (i.e., payment) electronically or by check.

Payments will be initiated within five (5) business days following the submission of a completed Vendor Request Form. Payments to a foreign financial institution (i.e., an overseas account) will require additional time to process and confirm.

Please note, all payments are subject to the Treasury Offset Program (TOP). The Debt Collection Improvement Act of 1996, 31 United States Code § 3716, requires the Department of the Treasury and other disbursing officials to offset Federal payments to collect delinquent debts owed to the United States, or delinquent debts owed to states, including past-due child support. For more information on TOP, please visit Treasury’s Bureau of Fiscal Service website at Debt Collection – TOP.

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1 comment on “For Sale By The U.S. Marshals: 3,813.0481935 Bitcoins (Approximately)

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