The bitcoin community could soon see another high-profile auction of bitcoins confiscated from users of the now-defunct online black market Silk Road.
Australian law enforcement officials are now in possession of 24,500 bitcoins (worth $9.4m at press time) following the conviction of their original owner, 32-year-old Warrandyte native Richard Pollard. Pollard was given an 11-year prison sentence today after pleading guilty to commercial drug trafficking, according to The Sydney Morning Herald.
Judge Paul Lacava told Pollard at the sentencing:
"The system of drug trafficking you engaged in meant you operated an effective one-stop shop where a variety of drugs could be purchased online."
Following the decision, Pollard’s bitcoins are subject to a restraining order and a 28-day appeal period. Should the funds be forfeited to law enforcement officials as expected, the bitcoins will then be sold at auction by the Victoria Department of Justice.
The potential sale is notable given that the size of the bitcoin stash seized is comparable to the one seized by the US government in its shut down of Silk Road.
The nearly 30,000 BTC remaining in accounts on the site were ultimately sold in an auction held by the US Marshals Service this summer, though it did not include the 144,000 BTC confiscated from its alleged operator, Ross Ulbricht.
Silk Road connection
Authorities originally began monitoring Pollard in 2012, eventually obtaining a search warrant for two of his properties. There, police found mailing materials that were being used to transport drugs to Pollard's customers on Silk Road.
Police estimate that Pollard trafficked 2.8 kilograms of MDMA, 44 grams of cocaine and 30 grams of ketamine as well as a host of other illegal substances from August to December 2012, using multiple post office boxes to conceal the volume of his illicit activities.
The search of Pollard’s properties revealed $58,000 in cash as well as three electronic wallets containing the 24,518 BTC. The funds were later formally confiscated in 2013.
Media event likely
Should the latest Silk Road auction garner similar attention in Australia, the local bitcoin community may be able to expect the technology to obtain more visibility as a result of the sale process.
The US Marshals auction saw venture capitalist Tim Draper purchase the entirety of the holdings, but was still widely considered a boon for bitcoin’s publicity in the US market and coincided with a surge in the price of bitcoin.
The auction was also cited as a boost to bitcoin's credibility, helping dispel rumors that the use of the technology was illegal.
Hat tip to The Sydney Morning Herald
Australian money image via Shutterstock