Genesis Trading, Binary Financial to Bid in Final Silk Road Bitcoin Auction

Digital Currency Group's Genesis Trading and bitcoin hedge fund Binary Financial are set to participate in a government auction of bitcoin this week.

Nov 3, 2015 at 10:00 p.m. UTC
Updated Sep 14, 2021 at 2:00 p.m. UTC

Major bitcoin industry companies including Digital Currency Group (DCG) subsidiary Genesis Trading and bitcoin hedge fund Binary Financial are set to participate in a government auction of just over 44,000 BTC (worth $18.3m at press time) to be held on Thursday.

Announced in October by the US Marshals Service (USMS), the auction, to be held from 12:00 to 18:00 UTC, will see the sale of the last remaining confiscated from convicted Silk Road operator Ross Ulbricht, who was sentenced to life in prison this May.

The initial auction saw investor and Draper Fisher Jurvetson (DFJ) partner Tim Draper purchase nearly 30,000 BTC, and was seen by some as a turning point in bitcoin's history, as many took the sale as a sign it was moving toward broader acceptance.

"In terms of the auction, it signaled a really important turning point in framing bitcoin as a legal and legitimate tool," Sunny Ray, president of India-focused bitcoin exchange Unocoin, recalled in conversation with CoinDesk.

The mood around the upcoming auction, however, is markedly more subdued.

CEO Brendan O’Connor said its auction participation was simply a business decision.

“From our perspective, any time we have an opportunity to buy or sell large quantities we take advantage of it. This is just another really good opportunity to do that,” he said.

Involvement unknown

Still, O’Connor suggested he believed many previous auction participants would enter the bidding process for similar reasons, though few confirmed their involvement at press time.

Representatives from Cumberland Mining, Pantera Capital, Falcon Global Capital and investor Tim Draper did not respond to press requests regarding the auction.

Further, the USMS that indicated it would not release figures for the number of auction participants, though it has historically done so on the day of the auctions.

Elsewhere, representatives from regulated bitcoin exchanges such as Coinbase and itBit declined to comment on their potential involvement with the auction.

bitcoin exchange founders Cameron and Tyler Winklevoss told CoinDesk they will not be participating, going so far as to criticize the strategy of doing so:

"We don’t generally participate in auctions where there is limited information, a high likelihood of a winner’s curse and a low likelihood of achieving an efficient price.”

Gavel image via Shutterstock

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