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U.S. Marshals Service


USMS Seal

FOR SALE
50,000 bitcoins


THIS SEALED BID AUCTION IS FOR A PORTION OF THE BITCOINS CONTAINED IN WALLET FILES THAT RESIDED ON CERTAIN COMPUTER HARDWARE BELONGING TO ROSS WILLIAM ULBRICHT, THAT WERE SEIZED ON OR ABOUT OCTOBER 24, 2013 (“COMPUTER HARDWARE BITCOINS”).

ON JANUARY 27, 2014, THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK ENTERED A STIPULATION AND ORDER FOR INTERLOCUTORY SALE OF BITCOINS WHEREIN THE UNITED STATES AND ROSS WILLIAM ULBRICHT AGREED THAT THE UNITED STATES MAY SELL ANY PORTION OR ALL OF THE COMPUTER HARDWARE BITCOINS ON A DATE OR DATES IN A MANNER TO BE DETERMINED BY THE GOVERNMENT.

THIS NOTICE DOES NOT CONSTITUTE AN OFFER TO SELL BUT INVITES INTERESTED PARTIES TO SUBMIT A BID FOR PURCHASE. THE FOLLOWING INFORMATION IS BEING PROVIDED WITHOUT RECOURSE TO THE UNITED STATES OF AMERICA AND THE UNITED STATES MARSHALS SERVICE.

CHECK BACK FREQUENTLY FOR UPDATES


PLEASE READ ALL INSTRUCTIONS CAREFULLY.

FAILURE TO COMPLY WITH ANY OF THE FOLLOWING INSTRUCTIONS WILL RESULT IN DISQUALIFICATION FROM THIS SEALED BID AUCTION.

This sealed bid auction is for 50,000 bitcoins separated into two series: Series A (10 blocks of 2,000 bitcoins), and Series B (10 blocks of 3,000 bitcoins). You will not have the opportunity to view other bids. You will not have the opportunity to change your bid once submitted.

Series

Bitcoins per Block

Blocks Available

Total Bitcoins Available in Series

Required Deposit

A

2,000

10

20,000

$100,000

B

3,000

10

30,000

$150,000

Total

 

50,000

 

Phase I: Bidder Registration
Opens:  9:00am EST on Tuesday, February 17, 2015

Deadline:  Noon EST on Monday, March 02, 2015

All interested parties must first register with the USMS. You are not eligible to submit a bid or otherwise participate in this auction unless you have submitted all required documents and have received confirmation from the USMS that you are an eligible bidder. Any registration documents received after the deadline will not be considered. Registration documents that were submitted in prior USMS auctions are not valid for this auction – you must submit new registration documents to be considered for this auction.

Required Registration Items:

  • A manually signed pdf copy of the Bidder Registration Form
  • A copy of a Government-issued photo ID for the Bidder (or Control Person(s) of Bidder)
  • Deposit in US Dollars sent by wire transfer originating from a bank located within the United States
  • A copy of the wire transmittal receipt
 

You must deliver the Required Registration Items by email to USMSBitcoins@usdoj.gov. If the USMS determines that you are an eligible bidder, you will receive communication of that fact from the USMS and will be provided with additional information regarding how to place your bid by 5:00 P.M. EST on Tuesday, March 3, 2015. If the USMS determines that you are not an eligible bidder, you will receive communication of that fact from the USMS, the deposit funds will be returned, and you will not be eligible to participate in the online auction.

The deposit of the winning bidder will be retained by USMS and credited towards the purchase price. If the winning bidder fails to close on the transaction through no fault of the USMS, the winning bidder will irrevocably forfeit his/her/its deposit to the USMS. The deposit of any bidder whose bid is not selected as a winning bid will be returned by ACH transfer to the original account from which the deposit was received. We will begin processing return of deposits immediately following the close of the bitcoin transaction(s). We hope to process all returns within five (5) business days, but high participation may result in slightly longer return times.

Bidder Registration Form:

Bidders must register to participate in a designated Series. Bidders may register to participate in more than one Series, but must provide the required deposit for each Series (i.e. the deposit requirement aggregates depending on the number of Series selected).

As with the last auctions, one registration allows you to bid on multiple blocks for the same price, but does not allow you submit multiple bids at varying prices. If you wish to have the ability to bid multiple prices on multiple blocks within the same Series, you will need to submit another registration form and additional deposit. The following examples are provided for your convenience:

Example 1: A bid to purchase three (3) blocks of Series A for the same per bitcoin price (e.g. $X per bitcoin for 6,000 Series A bitcoins) requires ONE registration form for Series A with a $100,000 deposit. Use ONE Bid Form to bid for ALL THREE Series A blocks.

Example 2: A bid to purchase three (3) blocks of Series A for the same per bitcoin price (e.g. $X per bitcoin for 6,000 Series A bitcoins), and two (2) blocks of Series B for the same per bitcoin price (e.g. $Y per bitcoin for 6,000 Series B bitcoins) requires ONE registration form for BOTH Series A and B with a $250,000 deposit ($100,000 for Series A plus $150,000 for Series B). Use ONE Bid Form to bid for Series A AND Series B blocks. Note that the per-bitcoin price for Series A does not need to match the Series B per-bitcoin price.

Example 3: Three (3) separate bids to purchase blocks of Series A at different prices (e.g. $X per bitcoin for 2,000 bitcoins, $Y per bitcoin for 2,000 bitcoins, and $Z per bitcoin for 2,000 bitcoins) requires THREE separate registration forms (EACH selecting Series A), and a $300,000 deposit ($100,000 for EACH registration). Use THREE Bid Forms, ONE FOR EACH Series A block. Note that each registration also permits a bidder to register for other Series (requiring additional deposits).

Phase II: Online Auction Period
Date: Thursday, March 05, 2015, from 8:00am EST to 2:00pm EST


Eligible registered bidders will receive a Bid Form upon the close of the registration period. Only eligible registered bidders may participate in the online auction.

In order for your bid to be considered by the USMS, you must send a signed pdf copy of the Bid Form within the online auction period window, which extends from 8:00 A.M. EST until 2:00 P.M. EST on Thursday, March 05, 2015. Bids received before or after the online auction period will not be considered. Bids that do not conform to the following instructions will not be considered..

You must use the Bid Form that will be provided to eligible registered bidders only. You may not submit bids on Series for which you did not register.

Your bid must reflect the number of blocks (up to a maximum of 10 blocks) that you wish to purchase. A bid on more than one block from a Series means that the bidder will accept any number of blocks up to the number of blocks for which he/she/it bid (e.g. a bid to purchase 5 blocks means that bidder will accept 1, 2, 3, 4 or 5 blocks at the per block offer price).

The prevailing bids will be determined by the following criteria:

  1. The eligible bidder who offers the highest price will be the prevailing bidder;
  2. If there are multiple bids at the highest price, the first bid received will prevail; and
  3. If fewer than all of the blocks in a Series are sold to the highest bidder, the remaining blocks will be sold to the successive highest bidders until all blocks are sold.
     

Phase III: Award and Sale Close

On Friday, March 6, by 5:00 P.M. EST, the USMS will notify the winning bidder/bidders that their bid/bids has/have been selected. Any winning bidder must send the purchase price funds (less the deposit amount) by a wire transfer originating from a bank located within the United States and provide a wire transmittal receipt to the USMS by 2:00 P.M. EST, on Monday, March 09, 2015. It is the responsibility of the winning bidder to understand their bank’s deadline for initiating wire transfers in order to ensure that the domestic wire transfer is initiated and a wire transmittal receipt provided to the USMS by the deadline. Failure to provide the USMS with a copy of the wire transmittal receipt by the deadline will result in disqualification, forfeiture of the deposit, and award to another bidder.

Bitcoins will be transferred to winning bidders in the order that each winning bid was received. No bitcoin transfer will be made until the USMS has confirmed receipt of all purchase funds. The bitcoin transfer process will begin immediately following receipt of purchase funds. The winning bidder(s) will be given private instructions related to the transferring of the bitcoins.

***
TERMS OF SALE

  • Cash. The bid must be an all cash offer. Bids that are contingent on financing terms of any kind will not be considered. All bids must be made in U.S. dollars.
  • Receipt of Funds. The winning bidder should be prepared to wire purchase funds to the USMS by 2:00 P.M. EST on Monday, March 09, 2015. If the winning bidder does not provide the USMS with a copy of the wire transmittal receipt by this date, the bidder will be disqualified and another winning bidder will be selected. FAILURE TO INITIATE A WIRE TRANSFER AND PROVIDE THE USMS WITH A COPY OF THE WIRE TRANSMITTAL RECEIPT BY MONDAY, MARCH 09, 2015, AT 2:00 P.M. EST WILL RESULT IN FORFEITURE OF THE BIDDER’S DEPOSIT. The winning bidder is responsible for any wire transfer fees associated with his or her payment..
  • Transfer Fees. Any transfer fees associated with the transfer of the bitcoins will be paid by the buyer. The buyer will be given an opportunity to select the amount of fees charged in the transfer.
  • Block Transactions. The USMS will only sell the bitcoins in blocks as described above. No bitcoin transfer will be made until the USMS has confirmed receipt of all purchase funds from the buyer. The USMS will not transfer bitcoins to an obscene public address, a public address apparently in a country restricted by the Office of Foreign Assets Control (OFAC), a public address apparently associated with terrorism, other criminal activities, or otherwise hostile to the United States.
  • Bidder Qualification. The USMS reserves the right to reject any bid for any reason whatsoever. The USMS reserves the right to sell all, some or none of the bitcoins at auction.
  • Bill of Sale. The winning bidder will receive a signed Bill of Sale from the United States Marshals Service prior to the transfer of the bitcoins.

ADDITIONAL INFORMATION

  • The USMS does not make any representations or warranties regarding Bitcoin.
  • Questions related to the auction process should be directed to USMSBitcoins@usdoj.gov. The USMS in its discretion will respond directly to email communications or will post additional items to the “Frequently Asked Questions” section below. The USMS will not respond to any telephone inquiries from the general public.
  • The USMS will not answer any questions regarding (a) the associated criminal or civil cases that resulted in the seizure of the bitcoins being auctioned, or (b) Bitcoin characteristics, uses or value.
  • The USMS will not sell to any person who is acting on behalf of or in concert with the Silk Road and/or Ross William Ulbricht, and bidders will be required to so certify.

FREQUENTLY ASKED QUESTIONS

1) How did the USMS get the authority to sell these bitcoins?

On January 27, 2014, the United States District Court for the District of New York entered a Stipulation and Order for Interlocutory Sale of Bitcoins. In this order, both the United States and Ross William Ulbricht agreed that “the United States, in its sole discretion, may sell any portion or all of these bitcoins, on a date or dates and in a manner to be determined by the Government.”

2) I registered for a previous bitcoin auction. Do I need to register again?

Yes, you will need to submit new registration documents in order to be eligible to participate in this auction. Your registration in prior auctions does not make you eligible to participate in this auction.

3) Can a foreign citizen participate in the auction?

Yes. However, bids will not be accepted from any person or entity that appears on the U.S. Treasury Department’s Office of Foreign Assets Control list of “Specially Designated Nationals.”

All deposit and purchase funds must be received from a U.S. bank. No exceptions.

4) Can I form a syndicate of buyers?

The person or entity that registers to bid on this auction must satisfy all registration requirements, including certifying that the bidder is not acting in concert with the defendant or defendant entity. This certification extends and applies to all members of a syndicate. The primary bidder should perform whatever due diligence the bidder feels is necessary in order to comfortably make that certification.

5) How much money do I need to make a bid?

You are responsible for ensuring that you have enough available funds to cover your bid. If you are selected as a winning bidder, you must initiate a wire transfer and provide the USMS with a copy of the wire transmittal receipt by Monday, March 09, 2015 by 2:00pm EST. Failure to initiate a wire deposit in the full amount of your bid will result in forfeiture of your deposit.

6) Is there a reserve price for this auction?

The United States Marshals Service reserves the right to sell some, all or none of the bitcoins for any reason. There is no disclosed reserve price for this auction.

7) What information about the auction process or results will the USMS release?

The USMS will contact the winning and losing bidders directly. The USMS will not release any information to the general public pertaining to the auction process or results.

8) How will my deposit be returned if I am not a winning bidder?

The USMS will send funds by Automated Clearing House (ACH) transfer. Please ensure that the financial institution from which your deposit was sent will accept an incoming ACH transfer before you register for the auction. In exceptional circumstances, judged on a case by case basis, the USMS will agree to send funds by wire transfer. Please know and understand the difference between these two types of funds transfers.

Your refund will be processed following the close of the auction. We will endeavor to initiate all refunds within five (5) business days following transfer of bitcoins to the winning bidder(s). Fund transfers are not immediate, as they are routed through the Department of Treasury (see paragraph below). If you provide incorrect information, it may take a week or longer to confirm that a transaction has been rejected before making another attempt. If you are sending funds from a foreign country using an intermediary U.S. bank, please be aware that receipt of refunds may take longer to process and confirm. Due to the foregoing factors, we cannot guarantee a date for you to receive your refund.

The Debt Collection Improvement Act of 1996, 31 United States Code § 3716, requires the Department of the Treasury and other disbursing officials to offset Federal payments to collect delinquent debts owed to the United States, or delinquent debts owed to states, including past-due child support enforced by states. If an offset is made during an ACH transfer, the claimant will receive a notification from the Department of the Treasury at the address provided by the claimant. If you believe that your payment may be subject to an offset, you may contact the Treasury Department at the following number: 1-800-304-3107.

February 2015

Mon

Tue

Wed

Thurs

Fri

16

17

 

Phase I

Bidder registration opens

18 19 20

Mon

Tue

Wed

Thurs

Fri

23

 

24 25 26 27

 

March 2015

Mon

Tue

Wed

Thurs

Fri

2

Phase I

Bidder registration and deposit due by Noon EST

3

USMS notifies parties about eligibility to participate in the online auction by 5:00pm EST

4

5

Phase II

Online auction period from
8:00am EST to 2:00pm EST

6

Phase III

Winning bidder notified by 5:00pm EST

Mon

Tue

Wed

Thurs

Fri

9

Winning bidder must initiate wire to the USMS by 2:00pm EST

10 11 12 13

 

Asset Forfeiture

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