Uncle Sam loses $31M as it wavers on what to do with Bitcoin stash- report
The indecisiveness of the US government on what to do with its stash of Bitcoins has cost it paper losses of around $31 million this week, The New York Post reported.
The Federal Bureau of Investigation or FBI possessed one of the biggest collections of the virtual currency in the globe after it closed down Silk Road, the online black market for illegal drugs, in October last year. The FBI was able to confiscate 144,336 bitcoins because of that raid, the report said.
Prosecutors pledged to cash out the digital currency at the end of January as the government feared the digital money had some rough sailing ahead. Back then the stash had a value of $114 million. Those fears came true this week as the price of the Bitcoin suffered a sharp decline and US government is still not ready to sell, The Post reported.
According to a federal official interviewed by The Post, US Attorney Preet Bharara still has yet to give the go-signal for the sale. Meanwhile, the office of Bharara did not comment if it intends to wait until the storm currently hitting the digital currency is over before it sells, the report said.
Citing figures from bitcoinaverage.com, the report said the price of Bitcoin has plunged to $574.29 per coin. At this rate, the FBI's Bitcoin booty is now worth $82.8 million, representing a paper loss of $31.2 million, from when the government said it would be selling the stash in January, the report said.
Bitcoin values fell this week after exchanges were compelled to temporarily suspend customer withdrawals after fears of hackers recording fake transactions mount. The price has since gone up to the $656 per coin, the report said.
Alleged Silk Road Founder Ross Ulbricht has also laid claim to the Bitcoins confiscated by the FBI. He also agreed that the Bitcoins should also be exchanged to cash due to volatility worries, the report said.