The 48-hour sealed auction will take place at 12.01am on 20 June.

Ernst & Young expects digital asset investment managers, digital currency exchanges, investment banks and hedge funds to make up the bulk of the bidders and mostly from North America and Europe.

"Eligibility mostly relies on the ability to transact," said Mr Nikitins of the rigorous registration process which requires a substantial deposit up front.

"Given the quantum of Bitcoin that are going to the market, we want to make sure that people can complete the transaction."

Off-market sales are the most common method of dealing with large quantities of seized property, especially liquid assets such as currency or shares.

"If you go through the process of putting them through public exchanges, the significant sell order would push the price down," said Mr Nikitins. "Not too dissimilar if you were to move a whole lot of BHP or Apple shares."

In 2015, the US Marshals Service seized 144,000 Bitcoins from Ross Ulbricht, worth around $US122 million ($169.7 million) at the time, and auctioned off the cryptocurrency in similar lots.

Mr Ulbricht was sentenced to life in prison for founding the anonymous online marketplace, Silk Road, famed for the buying and selling of drugs and other contraband substances. Mr Ulbricht has appealed against the decision.

While Bitcoin transactions are all visible in a public ledger, called the blockchain, the cryptocurrency has a reputation as the payment method of drug dealers and dark online vendors. Mr Nikitins understands many of the bidders may be body corporates bidding on behalf of other parties.

"If it's body corporates that are bidding, and we expect many will be, the details of those individuals controlling those body corporates will be known to us," he said. "It is crucial we are comfortable with the counter parties with whom we are transacting."