Australia To Auction $11.5 Million Confiscated Bitcoins

Around A$16 million ($11.49 million) worth of confiscated bitcoins will be auctioned in Sydney next month, the first such auction outside the United States, as demand for the digital currency surged to its highest in nearly two years.

The sale will take place on June 20-21 and involve 24,518 coins, said auction organizer financial services group Ernst and Young on Monday.

U.S. Marshals auctioned off more than 170,000 bitcoins in 2014 and 2015, confiscated after the closure of Silk Road, a black market website.

Bitcoin has proved popular among users of underground market places and criminals because transactions are anonymous and need not involve any formal institution.

Ernst and Young said the bitcoin was "confiscated as proceeds of crime" but declined to identify its client. Local news reports have previously said that the bitcoin was confiscated from an Australian man convicted of commercial drug trafficking in 2014.

A spokesperson for the department of justice in Victoria state declined to comment, citing commercial considerations.

EY partner Adam Nikitins said the company expects interest from asset investment managers, currency exchanges, investment banks and hedge funds in North America and Europe.

"The number of bitcoin transactions since 2012 has quadrupled and parties are seeing more opportunities and uses for the technology," said Nikitins.

The auction is not limited to Australian nationals. On Friday, the price of bitcoin rose to $530, the highest level since August 2014. Trades involving the Chinese yuan are estimated to account for as much as 95 percent of bitcoin's trading volume. The market value of all bitcoin in circulation amounts to around $8 billion.