Local Government authorities in Victoria, Australia announced today they are looking to sell US$7.1m worth of bitcoins on the open market in the coming months.

The 24,500 BTC were confiscated from a Melbourne drug dealer named Richard Pollard, who was sentenced in October 2014, to 11 years' jail after pleading guilty to commercial trafficking.

The bitcoins were seized by the state's Asset Confiscation Operations (ACO) in late-2013 but the agency had to wait until the man's case had been heard in the court system. An ACO spokesperson confirmed it has taken possessions of the 24,500 BTC and the Department would try "to make the most of it," reported the Sydney Morning Herald.

The ACO spokesman said:

"The Department of Justice and Regulation's ACO unit is assessing options for selling the bitcoins in this case. With the volatility in price for bitcoins, it is important that the sale of the coins on the open market is done at a time and way to get the best value."

Asher Tan, chief executive of the Bitcoin trading platform CoinJar, told the local media outlet that he believes that Bitcoin will trade between AU$400 (US$305) and AU$500 (US$381) some time this year. However, the executive noted that the timing of the auction would depend on "how bullish the Victorian government is about bitcoins in general."

Victorian Government logo

He further added that selling all the coins in the country would depress the Australian market.

While the Department kept silence on how it will sell the seized bitcoins, Tan suggested to use a US or European marketplace and auction small blocks of coins, similarly to how the US Marshals Service (USMS) had done to the bitcoins confiscated from online black market Silk Road.

Earlier this month, the USMS held its third auction of the bitcoins sized from Ross Ulbricht, convicted of operating Silk Road. The agency said that 14 bidders participated in the auction of 50,000 BTC, placing 34 bids over the course of the six-hour event.

The figure was up slightly from the 11 bidders and 27 bids entered in December's auction, but down from the 45 bidders and 63 bids during the first auction in June, 2014, reported Reuters.

While Australia holds off on removing the double taxation of digital currencies, researchers at the Australian National University (ANU) suggested earlier this month, that digital currencies could replace cash altogether in the country in less than a decade.

"In 10 years’ time there won’t be any paper cash," said Professor Rabee Tourky. He added:

"The big question is what’s going to replace it in Australia? Will it be Bitcoin? I don’t think so. More likely it will be ‘AusBit’ […]"

Meanwhile, the Senate is researching into ways to effectively regulate digital currencies. On October 2, 2014, the Senate referred an inquiry into digital currency to the Senate Economics References Committee for report and inquiry into "how to develop an effective regulatory system for digital currency, the potential impact of digital currency technology on the Australian economy, and how Australia can take advantage of digital currency technology."

On March 2, 2015, the Senate granted an extension to the committee to report by 10 August 2015.

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