Australia to auction £8 million of confiscated bitcoins

This will be the first such auction outside the US

Bitcoin is a digital currency that is created and held electronically (iStockphoto)

A collection of about 25,000 bitcoins “seized as proceeds of crime” will be auctioned in Australia next month.

The digital currency worth about £8 million will be sold in blocks of 2,000, with each block having a market value of £680,000.

The sale, scheduled to begin on June 20, will be the first such auction outside the US and the second one worldwide.

Ernst and Young, the accountancy firm overseeing the sale, confirmed the bitcoin was “confiscated as proceeds of crime” but did not elaborate on the case.

Local news reports have previously said that the bitcoin was confiscated from an Australian man convicted of commercial drug trafficking in 2014.

Adam Nikitins, EY partner said the company expects strong interest from asset investment managers, currency exchanges, investment banks and hedge funds in North America and Europe.

“The number of bitcoin transactions since 2012 has quadrupled and parties are seeing more opportunities and uses for the technology”, Nikitins said.

US Marshals auctioned off more than 170,000 bitcoins in the last two years, confiscated after the closure of Silk Road, a black market website.

The price of Bitcoin rose to $530 (£362) on Friday, its highest level since August 2014.

Australian businessman Craig Wright, in May, has claimed to be the person behind “Satoshi Nakamoto”, the mysterious identity that created much of the technology behind the online cash system.

But Dr Craig Wright has then gone back on his promise to provide proof that he is the founder of the online currency.

“I believe that I could do this. I believe that I could put the years of anonymity and hiding behind me. But as the events of this week unfolded and I prepared to publish the proof of access to the earliest keys, I broke. I do not have the courage. I cannot,” Dr. Wright said on his website.

Additional reporting by Reuters