U.S. Marshals to hold auction of seized bitcoin on Jan. 22

NEW YORK (Reuters) - The U.S. government will hold an auction of about 3,813 bitcoins that were seized in federal criminal, civil and administrative cases, the U.S. Marshals Service said on Thursday.

The six-hour online auction will be held on Jan. 22, the Marshals said in a statement, with the 3,813 bitcoins offered for sale in 11 blocks - five of 500 bitcoins, five of 100 bitcoins and one block of around 813 bitcoins.

Participants will have to stump up a $200,000 deposit to take part, and bids will have to be made in cash in U.S. dollars.

The government held three auctions in 2014 and 2015 for bitcoins seized during the prosecution of the creator of Silk Road, an online black market where the virtual currency could be used to buy illegal drugs and other goods.

Silk Road operated for more than two years, generating more than $214 million in sales of drugs and other illicit goods using bitcoins, before being shut down in October 2013.

Bitcoin on Thursday was down 6.4 percent at $13,950 on the Luxembourg-based BitStamp platform.

Reporting by Gertrude Chavez-Dreyfuss; Editing by Susan Thomas