US Government Selling Bitcoins!

A really interesting story came out of the Manhattan US Attorney Preet Bharara's office (the agency is prosecuting the case against alleged Silk Road’s head, Ross Ulbricht) yesterday.  Bharara said:

“With today’s forfeiture of $28 million worth of bitcoins (~ 29,655 Coins) from the Silk Road website, a global cyber business designed to broker criminal transactions, we continue our efforts to take the profit out of crime and signal to those who would turn to the dark web for illicit activity that they have chosen the wrong path. These Bitcoins were forfeited not because they are Bitcoins, but because they were, as the court found, the proceeds of crimes.”

Right now the government holds about 1.5% of all Bitcoins.  The interesting part of this statement is less that the US government is getting into the business of selling Bitcoins,  they sell all legally forfeited ill gotten goods from asset seizures.  The interesting part is that they not specifically that this was not an attack on Bitcoin but an attack on an illegal industry that happened to hold this legal asset.  This is an interesting precedent that moves the Bitcoin community ever closer to understanding the positions of governments on the economy.  

The interesting thing to follow with this sale will be the way in which the government will go about liquidating.  The US government held onto General Motors stock for almost 5 years to ensure that the recovering auto maker had a chance to get back on it's feet as well as to ensure that they did not devalue their own investment by flooding the market.  Even with this cautious strategy the US taxpayers lost 20% of their ~$50B investment in General Motors.  While the investment at risk with the GM equity was much larger in absolute dollars it was much smaller as a portion of it's relative market (~0.3% of the US Stock market Capitalization).

What is not yet for sale are the 144,000 coins (~$125M) that Ulbricht had in his personal wallet.