Consulting firm Ernst & Young will hold a series of auctions in Sydney to sell 24,518 bitcoins ($12.9 million at current exchange rate). The coins were seized during a police operation against a drug trafficker who used the popular darknet market Silk Road.

The whole amount of bitcoins will be divided into 11 lots of 2,000 BTC each plus one larger lot of 2,518 BTC. The first auction will begin on 20 June and last for 48 hours. Applications from prospective participants will be accepted from 1 to 7 June. The registration process will require an advance deposit to prove participants have necessary funds to make a bid. For Ernst & Young It is the first cryptocurrency auction, and only the second in the history of confiscated bitcoin sales.

“This current wallet is an extremely large holding of Bitcoin. This will be a pretty hotly contested auction, more competitive than previous auctions because the price volatility has reduced,” says Adam Nikitins, one of the partners of Ernst & Young.

He added that one's eligibility to take part in the sales mostly relies on one's financial ability.

According to the company, the auction can attract the attention of hedge funds and investment banks from around the world, especially from North America and Europe. The suggestion is based on the outcome of a similar series of auctions held in the United States where 144,000 BTC were put on sale confiscated from the Silk Road founder Ross Ulbricht.

The practice to sell confiscated bitcoins via auctions is based on the concern that a huge bulk of coins if brought to traditional cryptocurrency exchanges, can seriously affect the market price of the cryptocurrency. Therefore, off-market sales seem to be more appropriate considering the purpose of Ernst & Young is to extract the highest possible benefit from the lots.

The bitcoins on sale were seized by Australian law enforcement authorities late in 2014 from a drug dealer Richard Pollard, who was sentenced to 11 years in prison.

Elena Platonova