The US government has been approved by a federal judge in Utah to auction off 513 bitcoin and 512 Bitcoin Cash seized from an investigation into Aaron Michael Shamo, a dark web dealer.
8.5 Million Sale
In the upcoming weeks, the government is expected to sell all of the assets seized after the arrest of Shamo, including a Ford F-350 pickup, BMW 135i, and the millions of dollars worth of bitcoin and Bitcoin Cash.
On May 31, 2017, Shamo along with other dark web operators including Drew Wilson Crandall, Mario Anthony Noble, and Sean Michael Gygi were found guilty of conspiracy to distribute a controlled substance, aiding the importation of a controlled substance, intentional adulteration of drugs, use of the US mail in drug trafficking, conspiracy to commit money laundering, and engaging in monetary transaction in property derived from specified unlawful activity.
Immediately after the dark web criminals were found guilty of the charges filed by the FBI, the bitcoin and Bitcoin Cash holdings of the dark web operators were seized and moved to the custody of the United States Marshals Service (USMS).
However, in the official court document released and approved by Utah district judge Dale A. Kimball, the US government stated that it is costly to securely store the seized cryptocurrencies for a long period of time. According to the court document, the USMS has been paid $465 per month to store the two cryptocurrencies.
The US government also expressed its concerns over the high volatility rate of bitcoin and Bitcoin Cash, and suggested to sell the two cryptocurrencies before their value depreciate.
“The vehicles [bitcoin and Bitcoin Cash] have been seized and are in the custody and control of the United States Marshals Service. Every month, the USMS is accruing $465/month in storage fees for these vehicles. The total expenses for these two vehicles currently is $5,010.70. 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,” read the court document.
US Government Lost $2.36 Billion by Selling Bitcoin Early
In October, it was disclosed that the US government sold 144,336 bitcoins at a price of $336 per bitcoin. The entire batch of 144,336 bitcoins were sold at $48.5 million. At the time, the US government sold bitcoin with the same line of thinking with the most recent sale, assuming that the price of bitcoin would decline due to its volatility.
Today, the 144,336 bitcoins the US government sold in 2014 at $48.5 million is worth $2.36 billion. The opportunity cost for selling bitcoin three years early for the US government was $2.02 billion.
In the next few weeks, the US government is expected to proceed with the sale of the 513 bitcoins and 512 Bitcoin Cash at the current value of around $8.5 million.
By 2021, three years from now, the opportunity cost for the US government in selling the assets seized from a dark web investigation into Shamo could be significantly higher, given that the cryptocurrency industry is still at an early phase in development, adoption, and growth.
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