On Friday, the U.S. Marshals are auctioning off nearly 30,000 bitcoin seized from the online drug bazaar Silk Road. With Bitcoin worth close to $600 on most exchanges, that’s $17 million worth of Bitcoin on the table. Seen in a certain light, it’s bizarre that the feds are auctioning digital dollars. If they seized foreign currency in an IRL bust, they’d simply convert it to dollars and send it to the Department of Treasury. But they don’t have that option in this case. Regardless of the effect of trying to cash out $17 million worth of Bitcoin in one fell swoop when daily trading volume is just $14 million, the Marshals don’t have a U.S.-federally-approved exchange to use. The few U.S. exchanges out there are only legal in some states. When it comes to turning significant amounts of Bitcoin into U.S. dollars, all the action is in Europe. The top three BTC-USD exchanges are Bitstamp, Bitfinex and BTC-e, based in Slovenia & the U.K., France (maybe?) and Bulgaria (probably?), respectively; they collectively see daily trading volume of 10,000 Bitcoin, or $6 million USD.
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