Australia to Auction Confiscated Bitcoins Worth Over $11 Million

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Australia will be auctioning over US $11 million worth of bitcoins that it had confiscated last year as "proceeds of crime." Set to be sold in June, this will be the first sale of its kind outside the United States.

Going once, going twice... Australia to sell millions in bitcoins

Next month's auction will see the Australian government selling 24,518 coins of digital currency, each currently valuing at $534, its highest level in two years. Financial services firm Ernst & Young is coordinating the auction, but the group hasn't disclosed who the bitcoins were taken from. A report from the BBC notes that Australian newspapers had previously reported that 24,500 bitcoins were confiscated by the police in Victoria in 2013, after an arrest in Melbourne for drug dealing online. "In 2015, Victoria's Asset Confiscation Operations department 'confirmed it had recently taken possession of 24,500 coins and would try to make the most of it'," the report says citing local media.

The seized bitcoins will be sold in blocks of 2,000 in eleven lots, so as not to negatively affect the market. Bidders will have the opportunity to bid on one or multiple lots. EY expects to see a lot of interest in the auction, as the cryptocurrency is currently at its highest value in the last two years, and price volatility has reduced as well.

This current wallet is an extremely large holding of bitcoin.

[...] The number of bitcoin transactions since 2012 has quadrupled and parties are seeing more opportunities and uses for the technology,” Adam Nikitins, EY partner.

Garrick Hileman, an economic historian at the Cambridge Centre for Alternative Finance, told BBC that "Australian authorities had chosen a "safe" time to sell because there is some uncertainty about what will happen to the value of Bitcoin in July." About 4,000 new bitcoins are generated every day, as a reward for miners. However, this reward is set to halve on July 14 as the protocol reduces the reward every four years. While the prices could go up due to reduced supply of new bitcoins, there is also a likelihood of them going down.

This will be the first time outside of the US that bitcoins will be auctioned. US Marshals Service arranged similar auctions last year, selling 175,000 bitcoins confiscated from Ross Ulbricht, the founder of the Silk Road. Experts have said that unlike confiscated drugs that would not be sold in an auction, the government's auctioning the cryptocurrency acknowledges that transacting in Bitcoin is legal in Australia.

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