Bitcoin Shop Bids in USMS Bitcoin Auction Not Accepted

There’s been silence with regard to just who is the prevailing bidder when it comes to last Friday’s bitcoin auction held by the United States Marshals Service.

Things have been a little different when it comes to participants whose bids were not accepted, however. Both Barry Silbert of SecondMarket/Bitcoin Investment trust and  Dan Morehead of Pantera Capital announced their bids weren’t accepted, and now Bitcoin Shop, Inc. has come forth to announced their bids were also not accepted.

“Our bid with the USMS to purchase bitcoins through an online auction was not accepted,” said Bitcoin Shop CEO Charles Allen. “As a mechanism to hedge our proposed investment, we also bid through the Second Market syndicate for a smaller allocation, but that bid was not accepted either. After evaluating the current bitcoin currency landscape, we submitted a bid price that, if accepted, reflected our determination of a competitive and attractive value for our investors. Bitcoin Shop will continue to evaluate investment opportunities such as this in the future.”

Friday’s auction — which ran for twelve hours from 6 am to 6 pm Eastern time — made available more than 29,000 bitcoins worth over $18 million.

The bitcoins were auctioned off in two blocks. A ‘Series A’ block made available 9 blocks of 3,000 bitcoins, and a ‘Series B’ auction made available 2,646 bitcoins.

The bidding syndicate that Allen mentioned (which ran through SecondMarket) was designed to allow smaller-scale investors to participate in the auction. That is to say that instead of having to submit a deposit of $200,000 in order to become part of the auction (as required per the USMS), the syndicate’s requirement was to deposit a minimum of $25,000. The collective bids could also have been much larger than any one investor could afford, but of course that was not the case.

The 29,000 bitcoins auctioned off originated from the now-defunct Silk Road illicit marketplace shut down late last year, a service allegedly run by Ross Ulbricht (also known as Dread Pirate Roberts). He is currently awaiting trial, and another version of the Silk Road marketplace has since opened for business.