Feds look to cash in seized bitcoins at record prices

Federal prosecutors are looking to unload 513 bitcoins seized as part of a drug case in Salt Lake City. They originally belonged to one Aaron Shamo, who was arrested earlier this year for allegedly taking part in a massive fentanyl distribution scheme, the online portions of which netted the cryptocurrency in question.

Worth about $500,000 when they were seized, their worth has now ballooned to more than $8.4 million — and there’s no way the feds are letting that get away.

The U.S. Attorney’s Office in Utah has put in the requisite paperwork to sell the bitcoins while they’re hot. There’s considerable debate about how cryptocurrencies should be considered in situations like this — is it property, like a car, or currency, like a trash bag full of cash (something also recovered in the operation)?

Doesn’t matter to the feds, who are selling it now while it’s more than $17,000 per coin (to the moon!) and will work out the details later. Shamo has pleaded not guilty to the various charges, but his lawyer did not contest the sale of the bitcoins, so make of that what you will.

Assuming the price doesn’t completely collapse before early next year, Utah could be getting an unexpected cash infusion — assuming the proceeds don’t have to be returned to their former owner.

Some may think, of course, that they should put this unexpected windfall on the table and let it ride — perhaps that $8.4 million will turn in to $80.4 million before the case finishes.

That’s certainly what many would say today of the tens of thousands of bitcoins seized from the Silk Road and auctioned off in 2014. They’d be worth well over a billion today (as Tim Draper, who bought many of them, can tell you).

Featured Image: Bryce Durbin