The U.S. Marshals Service, the oldest law enforcement agency in the United States dating from 1789 when President Washington appointed the first thirteen Marshals, is auctioning some 660 Bitcoins next month, worth $4,220,040 at current prices. The cryptocurrency being auctioned relates to forfeitures from various federal criminal, civil and administrative cases.
This latest auction follows ones conducted by the agency at the start of 2018 (January 22) for 3,813 Bitcoins that were worth around $51.5 million at the time, and a subsequent Bitcoin auction on March 19. The latter was their seventh such auction to that point in time, which comprised around 2,170 Bitcoins, which were worth approximately $24 million at the cryptocurrency’s then market price on exchanges.
The Marshals Service manages a wide variety of assets, including real estate, commercial businesses, cash, financial instruments, vehicles, jewelery, art, antiques, collectibles, vessels and aircraft. Specifically, they handle the distribution of proceeds and payments to victims of crime and other innocent third parties.
As of September 30, 2017, the value of assets on hand was $1.8 billion within the Department of Justice Asset Forfeiture Program, which was reported in a factsheet by the U.S. Marshals dated April 13, 2018. That figure was up from $1.5 billion as of September 2016. And, the amount distributed to victims of crime and claimants in fiscal 2017 was stated at $144.7 million, with $332.5 million shared with participating state and local law enforcement.
The cryptocurrency (Bitcoins) being offered in this sealed bid auction, which derived from assets seized by the FBI and the U.S. government authorities amongst other parties (see list below), are in seven blocks and consist of Series A (six blocks of 100 Bitcoins) and Series B (one block of 60 Bitcoins).
As well as a need to register a bidder’s interest, a deposit of $200,000, which is returnable to non-winning bidders, will also be required to participate. Failed bids will see the return of deposits immediately following the close of the Bitcoin transaction(s).
Those participating in the auction, which will occur over a six-hour time period on November 5 between 8 am until 2 pm Eastern Standard Time (EST). They will not have the opportunity to view other bids or the opportunity to change their bid once submitted.
Registration & Requirements
Those interested in participating in the auction process must firstly register by complete all necessary registration requirements as at noon EDT later this month on October 3. Bids will be accepted from pre-registered bidders via email only.
One registration form allows a party to bid on multiple blocks from Series A and Series B at the same per Bitcoin price. However, it does not permit multiple bids to be submitted at differing per-bitcoin prices.
Should potential investors wish to table multiple bids/prices on multiple blocks, they will need to submit additional registration forms and extra deposit funds (i.e. So, two differing bids/prices on different blocks will need $400,000 to be deposited, while three differing bids in a similar fashion will call for $600,000).
The required registration items for this auction include the following, namely:
- 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 U.S. Dollars sent by Electronic Funds Transfer (EFT) originating from a bank located within the U.S.; and,
- A copy of the EFT transmittal receipt.
Those wanting to participate must ensure they deliver the necessary registration items by email to USMSBitcoins@usdoj.gov. The USMS will then notify all bidders regarding their eligibility to participate in the auction by email no later than 5:00 PM EDT on Thursday, November 1, 2018.
But should the USMS determine that a party is not an “eligible bidder”, then the deposit funds will be returned, and they 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. In the event that 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 USMS will seek to notify the winning bidder(s) by 5:00 P.M. EST on Monday, November 5, 2018. However, the number of bids received and the complexity of the review process may require additional review time, the agency indicated.
Foreign citizens can participate in the auction, but it should be noted that 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.” And, all deposit and purchase funds must be received from a U.S. bank.
The list of cases from which the Bitcoins in this auction were forfeited following various federal criminal, civil and administrative cases are as follows.
- HSI-USCBP Administrative Forfeiture of 1 Bitcoin
- United States v. Thomas Mario Costanzo (Case No. 17-585)
- United States v. Loui Ong (Case No. 17-191)
- United States v. Anton Peck (Case No. 16-cr-171)
- HSI-USCBP Administrative Forfeiture of 0.76 Bitcoin
- HSI-USCBP Administrative Forfeiture of 0.22 Bitcoin
- HSI-USCBP Administrative Forfeiture of 5.07545536 Bitcoin and 3.98147685 Bitcoin
- HSI-USCBP Administrative Forfeiture of 6.95 Bitcoin
- DEA Administrative Forfeiture of 27.152318 Bitcoin
- HSI-USCBP Administrative Forfeiture of 6.9 Bitcoin
- United States v. 7.26611032 Bitcoin (Case No. 18-cv-00553)
- DEA Administrative Forfeiture of 24.99934127 Bitcoin
- United States v. Theresa Tetley (Case No. CR 17-00738)
- DEA Administrative Forfeiture of 11.46069937 Bitcoin
- DEA Administrative Forfeiture of 0.07602526 Bitcoin
- DEA Administrative Forfeiture of 0.06140349 Bitcoin
- DEA Administrative Forfeiture of 0.55265864 Bitcoin
- United States v. Sky Justin Gornik (Case No. 17CR2796)
- United States v. Ralph Robert James Sergo (Case No. 17-14009)
- DEA Administrative Forfeiture of 9.88988757 Bitcoin
- United States v. Nathan Anthony Ott (Case No. 1:17-CR-225)
- DEA Administrative Forfeiture of 22.55 Bitcoin
- DEA Administrative Forfeiture of 0.782281 Bitcoin
- DEA Administrative Forfeiture of 3.43208747 Bitcoin
- DEA Administrative Forfeiture of 12.08794092 Bitcoin
- FBI Administrative Forfeiture of a combined 115 Bitcoin in series.