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US Government to Sell Off $10 Million in Seized Bitcoin and Bitcoin Cash

The U.S. government is planning to sell off confiscated bitcoins seized during an opioid drug case that are now worth almost $10 million in the wake of the recent spike in prices.

Government attorneys in the state of Utah are now working quickly to sell the 513.1490393 bitcoins (BTC), worth approximately $8.7 million at current prices, according to CoinDesk’s Bitcoin Price Index. An almost equal number of bitcoin cash (BCH) is also to be sold (512.9274588), having a value of close to $949,000.

According to the court order:

“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 … For these reasons, the United States seeks an interlocutory sale.”

The order further said that cryptocurrencies will be sold and converted into US dollars using one or more commercial cryptocurrency exchanges in increments of 50 coins or less, in a move to safeguard against loss or fraud. The sale proceeds will be deposited into the Treasury Forfeiture Fund Suspense account.

As per the court documents, U.S. district judge Dale Kimball approved the sale of confiscated cryptocurrencies on Dec. 12 after the prosecutors in the case filed a request for the sale on the same day.

The case involves a Utah man, Aaron Shamo, who was charged with running a multimillion-dollar opioid drug ring out of a Salt Lake City suburb in Nov. 2016, and was considered among the largest busts of its kind in the country, an Associated Press report says.

Shamo and his alleged partner, Drew W. Crandal, were accused of selling fake prescription drugs on a dark web marketplace. The seized bitcoin gains were worth less than $500,000 when Shamo was arrested, another AP report states.

Back in 2015, the U.S. government held several auctions of bitcoin obtained through its investigation of the now-defunct dark market Silk Road. In September, the government finally acquired possession of the proceeds from those auctions after a long legal battle with convicted Silk Road operator Ross Ulbricht, who had sought to regain possession of the funds.

In June, the South Korean government also sought to auction 216 bitcoins confiscated during a 2016 criminal investigation.

Utah courthouse image via Shutterstock

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Sweden's Government to Sell Seized Bitcoin in Open Auction

A government agency in Sweden dedicated to debt collection is auctioning off some bitcoin this week.

In a statement, the Kronofogden (known also as the Enforcement Authority) said today that it would sell roughly 0.6 BTC, an amount worth roughly $3,200 at press time. Though the statement didn’t explicitly state the source of the funds, local media reports indicate that the debt was assessed against a local company.

The agency said that it would begin the auction today, which is scheduled to last through next Thursday, and called for interested parties to reach out about participating.

Johannes Paulson, the agency’s operations developer, said in a statement:

“Assets are not just the car on the driveway or the money [in a] bank account. We live in a digital world, and now we are looking for assets in computers and hard drives as well as in telephones and web services.”

With the move, Sweden becomes the latest government to auction off holdings of the cryptocurrency.

The U.S. government, for example, held several auctions of bitcoin it obtained through its investigation of the now-defunct dark market Silk Road. As previously reported, the government has only just taken possession of the proceeds from those auctions following a long legal fight with convicted Silk Road operator Ross Ulbricht.

Editor’s Note: Some of the statements in this article have been translated from Swedish.

Auction hammer image via Shutterstock

The leader in blockchain news, CoinDesk is an independent media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. Have breaking news or a story tip to send to our journalists? Contact us at news@coindesk.com.

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Ukraine's Government Plans to Auction Seized Assets On a Blockchain

Ukraine’s justice ministry has begun testing the use of a blockchain to digitally auction seized assets, according to a report by Reuters.

The use of the platform will expand as the year progresses, with an eye to implementing state property and land registries onto the blockchain by the end of the year.

According to the report, Deputy Minister Serhiy Petukhov explained:

“We want to make the system of selling seized assets more transparent and secure so that the information there is accessible to everyone, so that there aren’t concerns about possible manipulation.”

Towards this goal, the government has been formally partnered with blockchain firm Bitfury since April.

CEO of Bitfury, Valery Vavilov, stated at the time that, “A secure government system built on the blockchain can secure billions of dollars in assets and make a significant social and economic impact globally by addressing the need for transparency and accountability.”

The partnership represents an effort within Ukraine to modernise institutions and reduce corruption through blockchain tech. In exchange, the Ukrainian authorities have been granted a $40 billion bailout from the International Monetary fund and other donors, Reuters reported.

Ukraine justice building image via Shutterstock

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