(REUTERS) – The U.S. government on Wednesday said it plans to auction 50,000 bitcoins on March 5, following the recent criminal conviction of Ross Ulbricht for being the mastermind behind the online black market known as Silk Road.
The auction being conducted by the U.S. Marshals Service is the third for bitcoins seized in connection with Silk Road, which prosecutors said let customers buy and sell drugs and other illegal goods beneath the radar of law enforcement.
A federal jury in Manhattan on Feb. 4 found Ulbricht guilty of narcotics and other charges for helping to enable about $200 million of anonymous online drug sales using bitcoins.
Prosecutors said Ulbricht, 30, had run Silk Road under the pseudonym “Dread Pirate Roberts” before the website was shut down in October 2013.
Ulbricht conceded that he created Silk Road, but was not responsible for illegal activity conducted there.
The marshals service said the 50,000 bitcoins are being offered in 10 blocks of 2,000, and 10 blocks of 3,000.
Bidders must register for the six-hour auction by March 2, and winners will be notified on March 6. [pro_ad_display_adzone id=”10″]Details are available at (here).
Bitcoins are an online virtual currency that has lost roughly 80 percent of its value since its peak closing high of $1,147.25 on Dec. 4, 2013, according to the digital currency news website CoinDesk.
The volatility results in part from bitcoin’s lack of central oversight and small trading volume.
In afternoon trading, the value of one bitcoin had fallen $9.83, or 4 percent, to $234.87..
The marshals service auctioned 29,655 bitcoins from Silk Road last June and 50,000 more in December, when they were respectively worth about $601 and $369 each.
Ulbricht consented to the latest auction in connection with a civil forfeiture proceeding. He faces up to life in prison when he is sentenced in the criminal case on May 15.