I have questions, what can you say about buying Bitcoin that was used in doing illegal activities? Does it have any differences with the usual thing we do? Does it have lesser value because it was from illegal activity or does it cost higher because of the bidding? And what does the government do after receiving money from the auction? Do they use it in a proper way or simply, do they add it to the government's asset?
Tim Draper, a major VC investor, bought 30,000 coins seized from the Silk Road. I'm sure he would have no trouble at all moving them on for just the same price as any other coin. They've basically been 'cleaned' by passing through government hands.
This lot don't release their sold prices. From hints from failed bidders it's usually slightly below the market rate but not significantly. It all depends on who turns up on the day to bid. The UK police recently did a public auction of seized BTC and the prices were more than the headline rate on average with a few exceptions where people clearly didn't understand the difference between BTC and BSV etc and radically overpaid.
https://thenextweb.com/hardfork/2019/09/27/uk-police-bitcoin-cryptocurrency-criminally-seized-auction-ethereum-ripple-satoshi-vision/Dunno where the money would go. Maybe back into their own budget. Who cares?
Tim Draper is the same guy who claimed that BTC will be eventually having an exchange rate of $250,000 per coin (the deadline he gave for achieving that level was 2022). The price that he paid for the 30,000 coins was never disclosed, but it was rumored that he (as well as the others who purchased Silk Road coins) paid a price which was higher than the prevailing exchange rate at that time. One reason given for the higher price was that the coins are now 100% clean, since they have been passed through the hands of the US Marshals.