UPDATE 1-Announcement in bitcoin sale seen later today-US Marshals Service

07/01/2014

(Adds details, background, comments from Bitcoin Shop)

By Nate Raymond and Gertrude Chavez-Dreyfuss

July 1 (Reuters) - The U.S. Marshals Service could reveal more details of its auction of nearly 30,000 bitcoin later on Tuesday, as the winning bidders are still unknown.

The U.S. Marshals Service held an auction on Friday for 29,655 bitcoin seized during a raid on Silk Road, an Internet black-market bazaar where authorities say illegal drugs and other goods could be obtained. Winners were notified on Monday evening, but the identities of those who put in successful bids were as of yet unclear.

The auction drew 63 bids from 45 registered bidders on Friday. "We anticipate making an announcement late this afternoon," said Lynzey Donahue, spokeswoman for the USMS, who in the past has said they did not plan to announce the winners.

Several prominent participants have come forward to say that their bids were not accepted. Barry Silbert of SecondMarket Holdings, which runs a bitcoin investment platform, said on Monday his firm was outbid, as did hedge fund Pantera Capital, which bid below the market price, according to Pantera chief executive Dan Morehead.

Bitcoin Shop Inc, which trades on the over-the-counter market OTCQB, said in a release on Tuesday that its bid had also been rejected. The virtual currency ecommerce company bid directly in the auction as well as through a syndicate organized by SecondMarket.

"Bitcoin Shop will continue to evaluate investment opportunities such as this in the future," the statement said.

The price of bitcoin rose on Tuesday, adding to Monday's gains. It was last priced at $650.73, up 1.8 percent on the session, and has gained more than 15 percent since June 25, according to digital currency exchange Coindesk.

Silk Road was shut after an FBI raid in September 2013 as agents took control of its server and arrested a Texas man, Ross Ulbricht, that the authorities said owned and operated the website. (Reporting by Nate Raymond and Gertrude Chavez Dreyfuss; Writing by David Gaffen; Editing by James Dalgleish and Gunna Dickson)



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