US Government Selling Bitcoins Seized From Dark Web Seller
By AJ Dellinger (ibtimes.com) / Dec 16 2017
The United States government has been granted permission to sell off hundreds of units of cryptocurrency seized by law enforcement from a man alleged to have sold counterfeit pharmaceuticals on the dark web.
The move to sell off the seized assets was approved by a federal judge in Utah after a recent filing from a U.S. attorney noted the volatility of cryptocurrency markets and said the confiscated coins may not hold their value in the long term.
According to the filing, the government seized just over 513 Bitcoin and 512 Bitcoin Cash. At the current market prices, those coins could yield nearly $10 million for the U.S. government, with just over $9 million coming from the Bitcoin and nearly $1 million coming from the Bitcoin Cash.
The coins were seized from a Utah man named Aaron Shamo, who was indicted in December 2016 for allegedly leading a multi-million dollar counterfeit pharmaceutical scheme. Shamo sold oxycodone and alprazolam, among other drugs, on dark web marketplaces.
According to the indictment filed against Shamo, he sold his product to thousands of people across the country and generated at least $2.8 million in sales in less than one year. When arrested, law enforcement discovered more than 500,000 pills and $1 million stored in large trash bags.
Shamo, who was named along with six co-conspirators and has been charged with 12 different counts of criminal activity, pleaded guilty to all charges but still had his assets—including the stash of cryptocurrency—seized by U.S. law enforcement. A 2011 Ford F-350 pickup and 2008 BMW 135i were also seized from Shamo.
U.S. law enforcement has transferred Shamo’s stash of cryptocurrency to digital wallets operated by the government. The coins were worth less than $500,000 at the time of their forfeiture.
“Due to the volatile market for cryptocurrencies, the BTC and BCH risk losing value during the pendency of the forfeiture hearings,” the prosecutors wrote in a recent filing advising the court to allow the government to sell the assets.
According to the Federal Rules of Civil Procedure, the government is granted the ability to sell any property alleged to be forfeitable before the final order of forfeiture if, among other reasons, the property is “perishable or at risk of deterioration, decay, or injury by being detained in custody pending the action,” or “the expense of keeping the property is excessive or is disproportionate to its fair market value.”
Given the wild fluctuations that occur in cryptocurrency markets, the cache of Bitcoin and Bitcoin Cash qualifies—at least according to U.S. District Judge Dale Kimball, who granted the government the ability to sell the currency on “one or more commercial cryptocurrency exchanges.” The sale will be the first of its kind for prosecutors in Utah.
Once the collection of seized cryptocurrencies are sold off, the profits generated from the sales will be held at the Treasury Executive Office for Asset Forfeiture.
http://www.ibtimes.com/us-government-selling-bitcoins-seized-dark-web-seller-2629180
PB/TK – Judge gives the thumbs up for the US to sell seized bitcoin currency only because their stock value is at its highest value. Meanwhile, the US has been holding onto a stash of 10 1991 Mercedes Benz 300SL’s and 1985 Chevy Corvettes hoping their value will reach more then 100k combined
