Bitcoin

UK Authorities Will Auction Bitcoin Worth Half a Million

Bitcoin dropping below $8,500 might not be good news for investors who already possessed it but it is a perspective development for people looking forward to buying bitcoin. Although people can head to several crypto exchanges for purchasing bitcoin, locals living in the UK can buy bitcoin at an auction organized by British police. On 26 September, along with several other things, British police will be auctioning as much as half a million worth bitcoin.

British police confiscated bitcoin and various other things from a criminal who used to illegally sell private data to people for bitcoin. In addition to selling data, the criminal also provided hacking services to people. Illegal activities involving bitcoin influence and impact the repute of cryptos. To explore how these activities affected, BlockPublisher enquired Jimmy Nguyen, the President of the Bitcoin Association, who elaborated:

News of scams and fraud committed with Bitcoin and other cryptocurrencies undermines the ability to achieve mainstream adoption. It also scares away institutional investors and provokes scrutiny from government agencies. For consumers, big businesses and governments to get more comfortable using cryptocurrency, they need to feel it is safer.

Apart from bitcoin, police also seized diamond jewelry, cars, and a luxury Rolex watch that belonged to the criminal. It would be a first for UK authorities to auction confiscated bitcoin to the public. Besides bitcoin, the aforementioned things will also be auctioned to the attendees.

Wilson Auctions, who had previously managed auctions for other governments as well, will be managing the auction procedure on behalf of UK authorities. According to the director of the asset recovery at Wilsons Auctions, Aidan Larkin, the auctioned planned in the UK would be a milestone. In this regard Larkin stated:

Not only are we auctioning a range of luxury seized assets but we are marking another milestone by auctioning bitcoin for the first time under the instruction of a UK police force.

Quite satisfied the contribution of Wilson Auctions, he added:

Wilsons Auctions is proud of the role it takes in realising these seized assets, having been responsible in returning over £100 million back into the public purse, ultimately going back to the victims of crimes or into local community initiatives.

Previously, Wilson Auctions, an Irish Auction House, had helped other governments to auctions various assets. The firm had assisted the Belgian government in last February to auction about £2.5 million of bitcoin seized during the investigation of a drug trafficking case. Back then, it was a first for Wilson Auctions to auction retrieved bitcoin to the general public. At that time, Larkin stated:

We are thrilled to be awarded this first of its kind contract with the Belgium Federal Government to sell seized cryptocurrency, allowing us to open up the opportunity of investing to new buyers.

Bitcoin’s illicit use had been quite popular over the dark web and black markets. Among several illegal uses, bitcoin was frequently used to buy illegal drugs on Silk Road. When US authorities investigated the matter, they arrested the founder of the website and recovered as much as 170,000 bitcoin. Later, the US was the first country in the world to auction bitcoin. The first US auction executed on January 2018 successfully during which about 3,813 bitcoin in total were auctioned.

Since the inception of bitcoin, scams, and hacks encompassing cryptocurrencies have been very common. According to an estimate, more bitcoins have been lost due to fraudulent activities than possessed by the creator of bitcoin, Satoshi Nakamoto.

Apart from hacks and scams, the use of cryptocurrencies to launder money and buy illegal drugs or services on the dark web had damaged the reputation of the bitcoin as well. A few months ago, people hiring a hitman on the dark web with the help of bitcoin to kill their lovers were arrested by authorities. This shows the extent of ease provided by bitcoin to the people for easily carrying illegal activities. Therefore, a solution must be adhered to minimize such activities. In this regard, Nguyen said:

Existing laws and regulations (such as those governing money services businesses, and issuance of securities) should already apply in the cryptocurrency space. It’s more important now for governments to provide guidance on how those laws and regulations apply to the crypto world, rather than just enacting new laws governing Bitcoin and other cryptocurrencies.

Although the government had turned to auction for providing an opportunity for locals to buy cryptos, it wouldn’t be a good move if the government did the same after retrieving the stolen funds. In other words, the funds belonging to the victim of crypto hacks and scams couldn’t be compensated with auctions so emphasis should be laid primarily to reduce the illegal acts from happening in the first place.

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Fatir Malik

Electrical engineer by profession, turned into blockchain developer. Fatir contributes regularly with his insights about latest developments in fintech sector. Contact the editor at editor.opinions@blockpublisher.com

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