In a statement posted on the agency’s website, U.S. Marshals have announced that they’re auctioning off thousands of bitcoins. TechCrunch spotted the auction, and the digital currency’s value began to slump overnight, falling to $600 ahead of officials plans to flood the market with more bitcoins.

Bitcoins

Marshals auction nearly 30,000 bitcoins

According to the statement, Marshals are auctioning off more than 29,656.5 bitcoins. At today’s price of around $600 each, that values the agency’s take at around $83 million. Of course that’s still a fraction of the almost 13 bitcoins that are currently in circulation.

TechCrunch reports that the FBI is rumored to also be dumping the bitcoins it seized last year, although this has not been confirmed. In addition, the site notes that the Marshals are treating this auction as a sale of seized assets rather than as a currency sale.

The U.S. Marshals’ office states that it will be auctioning off the digital currency in nine Series A blocks and one B block. In each of the Series A blocks, there are 3,000 bitcoins, and in the Series B block, there is about 2,656.5 coins.

Officials also gave the IP addresses for where these bitcoins were found and states that these are coins seized from Silk Road. However, they also state that the auction does not contain any coins that were in Ross Ulbricht’s own digital wallets. Officials allege that Ulbricht created the illicit Silk Road online marketplace.

How the bitcoin auction will work

The agency said it will not transfer any bitcoins until it has confirmed that the buyer has sent all of the promised payment amount. In addition, the agency said it won’t sent the currency “to an obscene public address, a public address apparently in a country restricted by the Office of Foreign Assets Control (OFAC), a public address apparently associated with terrorism, other criminal activities, or otherwise hostile to the United States.” Officials also won’t sell to anyone who is connected to Ulbricht or Silk Road.

In order to get in on the auction, interested buyers have to register with the Marshals’ service. Registration begins June 16 at 9 a.m. Eastern and ends on June 23 at 12 p.m. Eastern. The auction itself will take place on June 27 from 6 a.m. to 6 p.m. Eastern.

Those who want to participate in the auction must fill out the bidder registration form, manually sign it, and issue a copy of a driver’s license or other government-issued photo ID. It’s not cheap to get in on the auction, as interested parties must send a $200,000 deposit through wire transfer from a bank that’s located inside the U.S.

What’s next for bitcoin?

The reason bitcoin prices have slumped is because while 29,000 is just a small fraction of the total number that is in circulation, it still sends ripples throughout the market because of how volatile the digital currency has been.

Various U.S. agencies have expressed interest in bitcoin over the last several months, including interest in everything from possibly regulating it as a currency to simply finding a way to tax it. This pending sale of coins seized by the U.S. government is particularly interesting as it gives officials some experience in dealing with the digital currency.