The United States seizes many assets during criminal investigations. If people are convicted of crimes and their assets are forfeited, the United States Marshals Service is given the task of auctioning off the property that has been seized. Over the past six years, the United States Marshals Service has auctioned off a large amount of bitcoins. However, a recent series of auctions did not net them nearly as much as it could have. They sold seized bitcoins for a combined $151 million. However, if they had simply waited to hold the auction at a later time, those same bitcoins would have been worth $1.7 billion more.
The United States Marshals Service has made similar mistakes when they have auctioned bitcoins in the past. However, the loss of $1.7 billion is unprecedented. It is very obvious that they do not have any cryptocurrency experts working for them. If they did, the experts could have told them that selling early will be a huge mistake because they will get much less of a return. It is not clear if any punishments have been handed down as a result of the botched auctions. The bitcoins were mostly sold to investors located in Asia.
In the wake of missing out on an additional $1.7 billion in revenue, it would be wise for the United States Marshals Service to totally reevaluate how any bitcoin auctions are held in the future. Rather than simply schedule the auction far in advance when market conditions are impossible to predict, they should announce that the bitcoin could go up for auction at any time when market conditions are at their best. Selling the bitcoin without any warning when it is at a high value might limit the amount of people who are bidding. However, it could also generate a much bigger amount of money.
There have been no high ranking officials in the United States government who have weighed in on the issue of $1.7 billion being lost because the bitcoins were sold too soon. However, it would seem likely that many heads will roll as a result of this. This is a colossal amount of money that was lost simply because the people who were conducting the auction did not know what they were doing. This will happen again in the future unless the United States Marshals Service makes some very serious changes to the way that they conduct bitcoin auctions.