US government sells $20 million in Bitcoin to mystery bidder

The 30,000 bitcoins were seized in last year after the closure of the Silk Road

The US government has sold roughly $20 million in Bitcoin seized from the Silk Road to a mystery bidder.

The digital currency was being held by the US Marshals Service (USMS) after the shutdown of the online black market in October 2013 and the arrest of its alleged owner and operator Ross Ulbricht, aka the Dread Pirate Roberts.

Forty-five bidders registered to buy the 29,656 bitcoins, each paying a deposit of $200,000. Sixty three bids were reportedly received by the USMS with the currency transferred to the winner on Monday evening after a 12-hour auction.

Two prominent US investment firms Pantera Capital and SecondMarket reported that they had been out-bid for the currency, and the winner’s identity remains unknown.

The secretive nature of the auction has prompted speculation over the US government’s involvement in the unregulated Bitcoin market.

Izabella Kaminska, a journalist for the FT, speculated in a personal blog that the operation could have been a “sting” in order to let the US government “operate undetected in the shadowy bitcoin [market]” by letting observers believe that they no longer owned the seized currency.

The auction was welcomed by the Bitcoin community for helping to legitimize the currency.

"The bitcoins that were auctioned off would be in good hands," said George Samman, chief operating officer at BTC.sx, a bitcoin trading platform, told Reuters. "The investors will provide the stability to the industry and reduce volatility in the market. These people will probably hold the bitcoin over the long haul and that's good for the industry."

The US government still holds more than 110,000 bitcoins worth roughly $70 million in today’s prices. The value of Bitcoin hit a high of $1,147 in 2013 until government crackdowns panicked investors. One bitcoin is currently worth $641.