SecondMarket and the Bitcoin Investment Trust are offering members a way to bid on the US Auction on Bitcoins seized from the Silk Road via proxy through SecondMarket.
An email distributed to members this morning reads:
As you may be aware, the U.S. Marshals Service is planning to auction off approximately 30,000 bitcoins. SecondMarket intends on participating in this auction and is allowing qualified customers to submit orders for aggregation into bids to be submitted by SecondMarket in the auction process. Participation through SecondMarket will generally be simpler than direct participation in the auction:
- Smaller minimum bid size ($50k versus ~3,000 bitcoin blocks)
- Lower upfront capital commitment (bid amount versus $200k deposit plus proof of funds)
- Support for multiple bids at different bid prices with smaller minimum sizes
- Private participation in the auction (bidder identity will not be revealed to the U.S. Marshals office)
- Open to non-US investors
Full details and instructions can be accessed on the SecondMarket platform. To learn more and to participate, create an account on the SecondMarket auction portal. If you already have an account, simply log into the SecondMarket auction portal. Please note that an account on the SecondMarket portal is separate from the New Account Profile (NAP) that you may have filled out with us in the past.
The order deadline will be Thursday, June 26 at 12pm ET by which time all submissions must be complete including receipt of wire payments for bid amounts. All orders in place as of Thursday, June 26 at 12pm ET will be deemed fully binding and irrevocable.
Please note that ten percent of all auction fees received by SecondMarket from successful syndicate participants in the auction will be donated to the Electronic Frontier Foundation, a nonprofit organization supportive of bitcoin and more broadly dedicated to promoting technology, innovation and the protection of rights in the digital world.
SecondMarket and the Bitcoin Investment Trust email@example.com
This is an interesting concept as this could allow users to potentially purchase smaller levels of coins by syndicating a large group to purchase them.
It does however lead to several questions regarding the purchase because the US Marshall service has stated in the FAQ regarding the auction:
Can I form a syndicate of buyers? The person or entity that registers to bid on this auction must satisfy all registration requirements, including certifying that the bidder is not acting in concert with the defendant or defendant entity. This certification extends and applies to all members of a syndicate. The primary bidder should perform whatever due diligence the bidder feels is necessary in order to comfortably make that certification.
Which means that each member of the syndicate will need to provide some sort of documentation. As it stands the details have not yet been outlined by SecondMarket but it is highly likely that they are going to address this and other potential issues as SecondMarket is lead and made up by several qualified US Investors.