Daily Management Review

US Marshals Service arranges a grandiose Bitcoin auction


08/09/2016


US Marshals Service put on auction 2719 Bitcoins, confiscated in several criminal cases. The total value of items may exceed $ 1.6 million.



Francis Storr
Francis Storr
The auction is scheduled for August 22, and participants can register starting from 18 August. Bitcoins were seized within nine criminal cases. For the last two years, the US Marshals Service has already held four such auctions.

Among the most famous crimes is case of Ross William Ulbricht, an owner of underground trading platform Silk Road. He was convicted of drug trafficking, hacker attacks, and money laundering, and then sentenced to life in prison. Calculations on Silk Road were held exclusively in Bitcoins.

Bitcoins were also seized in the case of Carl Force, a former officer of Drug Enforcement Administration (DEA). Force appropriated a significant amount of Bitcoins during the Silk Road investigation.

In 2015, the New York prosecutor's office had closed 73 fraudulent sites related to Bitcoin. Then, undercover prosecutors found fraudulent sites owned by YouYou Finance company. Most of these sites offered an unusually high return on Bitcoin-deposits. 

Earlier, the District Court in Miami during the hearing of the criminal case on charges of money laundering ruled that Bitcoin is not money, thereby indirectly legalizing transactions in cryptocurrency, Bloomberg reported.

The case participant was a resident of Miami, Michael Espinoza, who sold Bitcoins worth $ 1.5 thousand to undercover policy agents. The law enforcers explained this step by need to purchase a hacked database of credit card numbers. During the operation, Espinoza was arrested and charged with money laundering.

The court hearing Espinoza’s case said the cryptocurrency is an individual property, so the owner was free to buy or sell it. Given vague legislation in respect of transactions with cryptocurrency, Miami court decision can be regarded as official legalization of Bitcoin business in Florida.

Bitcoin-counsel Brian Bieber said in an interview with Bloomberg that the Miami court's decision would set a precedent in court practice. In practice, it means that Bitcoin transactions will be accepted everywhere. Media are currently awaiting the court’s final decision on whether Bitcoin is a mean of payment or not.

Despite the fact that Bitcoin is an exclusively virtual currency, it appears not from the air. The process of obtaining cryptocurrency is called mining. Initially, miners used home computers, then they had to have gaming graphic cards, and now, the cryptocurrency can be mined only with special equipment.

A computer owner, decided to mine Bitcoins, simply solves complex math problems gain the virtual money as a reward. Bitcoins operate on the basis of the blockchain system. It does not have a single center, and can be distributed reliably and safely.

All transactions are taking place through the miners. Their computers should check accuracy of the transaction by using a private key and information about all new transactions. If confirmation of the operation took place, the miner receives award in the amount of 12.5 Bitcoins for the block’s formation. Every four years, the system reduces the amount of remuneration, and more recently the award was exactly twice as much.

Total volume of Bitcoin’s issue is limited and will not exceed 21 million. Currently, more than half of the cryptocurrency has already been mined. 

source: reuters.com, bloomberg.com






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