The break up of the online underground marketplace, Silk Road, is still having lasting effects. Recently, the United States government announced that they will be auctioning up a huge portion of the bitcoins that were seized during several cases revolving around Silk Road. They are auctioning about 2700 different coins. The total value of the coins comes out to be about $1.6 million. The bitcoins will be auctioned off via an online auction.

This may seem like an odd thing for the government to do. This is actually the fifth time that they have held such an auction since 2014. They have held 4 different auctions since then. Most of the digital currency that is being auctioned off in these auctions was forfeited over to the government during cases against the underground economy.

Silk Road

Silk Road was known as the first darknet marketplace in the history of the internet. A darknet marketplace operates in a similar fashion as the black market does in real life. People sell things that they can’t sell legally on the streets on this website. It was a very popular place for people to purchase unsavory items like drugs.

The website was developed and founded in 2011. It was very small at first because of the fact that people had to purchase accounts in order to be able to sell their wares on the website. The seller’s accounts were purchased via auctions and went to the highest bidder. As the site got bigger new sellers merely accessed accounts by purchasing them from the owners of the website at a fixed price.

The site ran until 2013 until it was brought down by an FBI investigation. This investigation pinpointed the main proprietor of the website, Ross William Ulbricht. He operated Silk Road under the pseudonym “Dread Pirate Roberts”. Ulbricht was sentenced to life in prison as a result of his role in the operations of the website. Another version was later started by other people involved in the original Silk Road. That version was also investigated and broken up. The founders of Silk Road 2.0 also ended up in prison. Many people were arrested for drug trafficking around the world as a result of the FBI case against Silk Road.

Silk Road sold over 10,000 different products on the darknet website. The website can only be accessed by those that are familiar with the operations of the dark internet. While a huge amount of products, a majority of them were still drugs. 70% of the offerings on the website were drugs, in fact. This is every drug from prescrioption pills to crack cocaine. There was literally no drug that a person couldn’t get via Silk Road.

Ulbrich said that his intentions with the website were pure. He only intended, at first, to give people more options on how to shop for and purchase different items. He said that his libertarian ideals helped guide him. He did admit that he was wrong for letting it get out of hand. He is currently in the process of appealing his case to avoid spending the rest of his life in prison.

As a result of the cases, the government seized millions of dollars in bitcoins from different users. Like stolen property in any other case, their next step was to auction them in order to get some money back. They have been slowly doing that over the last two years in order to recoup the expenses that they paid to work on the Silk Road case in the first place.

The coins in each auction have all originated from different people in the case. An extremely small amount of bitcoins in this next auction are from Ulbricht. Most of the huge amount of bitcoins that were found on his computer were sold in earlier auctions.

A good portion of the bitcoins from this auction all come from one specific drug dealer that was arrested as a result of the case, Matthew Gillum. He is currently serving the second year of a 9-year prison sentence for selling drugs. The bitcoins were taken by the government via civil forfeiture. A portion of the coins that are in this auction were taken from other drug dealers as well. Gillum’s coins are the bulk of them, though.