The U.S. Marshals began auctioning off about $13.5 million worth of bitcoins Thursday morning.
The auction for the 50,000 units of digital currency—part of the civil forfeiture connected to the conviction of Ross Ulbricht for running the Silk Road drug marketplace—began at 8 a.m. and will continue until 2 p.m. ET. The price of a single bitcoin was about $270 on Thursday morning, according to CoinDesk's bitcoin price index.
The reserves were set to be offered in 20 different blocks: There will be 10 blocks of 2,000 bitcoins and 10 blocks of 3,000 bitcoins, according to the U.S. Marshals Office.
Potential bidders needed to register by Mar. 2, and the winners will be notified on Friday.
The Marshals Service conducted auctions in June and December for nearly 80,000 bitcoins seized during the Silk Road raid in 2013. Ulbricht, 30, was found guilty on Feb. 4 of conspiracies to commit money laundering, computer hacking and drug trafficking.
Billionaire venture capitalist Tim Draper said he would be a bidder. "Probably the best deal anyone will get," said Draper on Thursday in an email to Reuters.
Draper won part of the bitcoin auction in December, successfully bidding on one lot, totaling 2,000 bitcoins, on behalf of Draper Associates. Draper said he planned to invest 300 bitcoins in every startup that participated in the current session of Boost, a program for bitcoin-related startups founded by his son, Adam Draper.
Draper was the sole winner of the first auction of 29,655 bitcoins.
SecondMarket, owned and founded by Barry Silbert, won the bidding for 48,000 bitcoins auctioned in December. Silbert told Reuters that SecondMarket would participate in Thursday's auction, but his firm has not created a syndicate for the sale.
Pantera Capital, an investment fund founded by Dan Morehead, a former senior executive at hedge fund Tiger Management, said in its newsletter it is also participating and has formed a syndicate for the auction.
—Reuters contributed to this report.