| NEW YORK, June 30
NEW YORK, June 30 Second Market, one of the more
prominent bidders in the U.S. Marshals bitcoin auction, on
Monday said it was outbid in its attempts to buy some of the
nearly 30,000 coins sold late last week.
The rejection of one of the biggest names in the bitcoin
industry is a potentially encouraging sign for the long-term
prospects of the crypto-currency because this means the auction
drew a lot of interest from other institutional investors.
On Friday, the U.S. Marshals Service auctioned off about
30,000 bitcoins seized during a raid on Silk Road, an Internet
black-market bazaar where authorities say illegal drugs and
other goods could be bought. The Marshals Service said it was
notifying winners on Monday evening.
A spokeswoman for the U.S. Marshals Service said on Monday
the 12-hour auction for about $17.7 million in bitcoin drew 45
registered bidders and received 63 bids but would not disclose
the bidding price of the coins.
"The award process is ongoing, and we will have no further
announcements today," said Lynzey Donahue, a spokeswoman for the
Barry Silbert, founder and chief executive officer of
Second Market Holdings, which runs a bitcoin investment
platform, confirmed in an email to Reuters on Monday that he
tweeted earlier that his firm had been outbid for the bitcoin
auction on all blocks. Silbert had made no secret of his desire
to bid in the auction, so his firm being outbid suggests
interest was likely strong.
Bitcoin prices were up 6.8 percent on Monday at $639.32,
according to the digital currency exchange CoinDesk. The
currency's price rose late in the afternoon in advance of
expectations for the sale's results.
Bitcoin is a virtual currency that has gained a following
but also come under scrutiny due to scams related to virtual
currencies. However, its acceptance has grown, with satellite
operator Dish and online travel agency Expedia recently saying
they would accept payment in bitcoin.
Among those who said they registered to participate in the
auctions were Bitcoin Shop Inc., Coinbase and Pantera Capital.
None of those three would comment on whether they had been
informed of the results.
Silbert had attracted a group of investors interested in
getting a share of the bitcoin auction by offering lower bid
sizes and a reduced upfront commitment. In a tweet last week he
said he received 186 bids from 42 bidders.
Silk Road was shut after an FBI raid in September 2013 as
agents took control of its server and arrested a Texas man, Ross
Ulbricht, that the authorities said owned and operated the
website. The auction was for 29,655 bitcoins contained in files
residing on its servers, which were forfeited in January.
(Reporting by Gertrude Chavez-Dreyfuss and David Gaffen;
Editing by Diane Craft)