Yes, it is obviously viable, for a company that has sufficient infrastructure and volume to do the work and absorb the risks.  I should have emphasized the "minimum work" aspect. 

Actually, AFAIK, who defines the method of auction is the law and/or the USMS.  The FBI just hands the coins over to the USMS, once cleared for auction; they have no authority over the auction process, and don't care about it (except for barring DPR from the auction).

You must think with their logic to understand why they are doing it that way.  It is not part of their job's mission to make money for the government.  That is the job of the IRS and other tax collectors.  Seized property is public property, and therefore the government is required to use it for the public good.  The official purpose of those auctions is to exchange public property of various odd types, originating from seizures, for a roughly equivalent amount of dollars, which are easier to employ in the public interest than rolls-royces, mansions, or bitcoins.  The main concern of the USMS auction staff is to avoid breaking the relevant laws, in particular making sure that the final buyer does not get unfair advantage over other citizens (such as he would get if he bought through a private deal, or at a small fraction of market price).

The main advantage of an open English or Dutch auction (with repeated bidding) is that the final price is probably higher than one would get with sealed bids.   But the USMS does not care much for that.  One big disadvantage is that the bidders must assemble to bid in person. (An open auction via internet would require a lot more work to set up than a sealed-bid one, and, among other things, it could create legal headaches for the USMS if some bidder were to be put at disadvantage by network problems at the USMS end.)

Sealed-bid auction (which is the norm for awarding government contracts, at least here in Brazil) is less work for everybody, safer, and as fair to all bidders as it could be.

It is not consistent, but I believe so.  I believe that many Chinese traders tend to change their mood between 21 pm and 02 am local time, which is 15:00 to 18:00 UTC.  Probably moving to a "safer" position, which depends on what they think may happen while they sleep.  That would be more CNY if they fear a drop, more BTC if they smell a rise.

Indeed Bitstamp has been quite insensitive to the ups and down in China.  Perhaps these have been too small to activate arbitrage, or arbitrage has broken down for some reason?

Not if they are different taxes... in the US, eBay may charge the local Sales Tax (plus their fees).  PayPal may charge some other money transmission tax (plus their own fees). 

I suppose that you mean the daily total bitcoin transaction volume, as provided by blockchain.info in their charts page. (equivalent to about 40 million USD/day, last time I checked)

Well, it is not clear how much of that is commercial payments (BTC changing hands in return for goods or services), how much is financial (people exchanging between other currencies and bitcoin) and how much is "fake" (bitcoins being moved between addresses that belong to the same person).

I see signs that most of that volume is "fake"; which would not be surprising, given that address creation and bitcoin transfers are still free.  One person could generate all that volume with a script that moved 1000 BTC between his own addresses every 20 minutes or so.

On the other hand Bitpay claims that they processed payments adding to 100 million USD in the whole of 2013; that may give a rough idea of how much bitcoin commerce is going on.

Le pesone della lista non sono paritecipanti dell'asta, sono sono alcune delle persone che hanno scritto al USMS per charimenti.      Possono esser persone preoccupate con il possibile effetto dell'asta sul prezzo, o semplicemente curiose.  Il prof Folkinshteyn per esempio, è poco probabile che voglia comperare bitcoin.

SecondMarket è una impresa che amministra un fondo di investimento (SMBIT) legato al prezzo del bitcoin. Coinbase è un servizio di bitcoin, qualcosa tra Bitstamp e Bitpay.   Sam Lee, chissà, può essere un parente dei fratelli Bobby Lee (padrone della borsa BTC-China) e Charlie Lee (sviluppatore del Litecoin).  Però "Lee" è un sopranome comunissimo in Cina.

Yeah, it has been going on for half a day or more, and the delay is increasing. However, a few hours ago checked the chart on their homepage for an hour or so: it was up-to-date and the price tracked OKCoin's closely and promptly.  But arbitrage between Bitstamp and them did not seem to be active.

I see.  If anyone stlll cares, please:

I presume that the search was done by the InstaWallet owners themselves?

Are the two URLS at least self-consistent (right format, numbers in plausible range, encrypted with the InstaWallet public key, whatever)?  Could they be forged by a hacker, or have come from some other similar service?  Did BK say how he kept or recovered them?

Are there other similar claims against InstaWallet from other ex-clients?

Please make a rule saying that each post that asks to add some altcoin, beyond the first post, delays the addition of that coin by one more month. 

Splitting a pool into 2-3 pools is no solution. If there is a small set of pools that together have a majority, they can form a cartel.  If they were split from the same parent pool, their owners are probably the same people, or former partners who are likely to cooperate.

OKCoin and OKCoin are undergoing a sudden spurt by ~45 CNY (~7 USD) but Bitstamp is not budging...

Still... Phinn provided two URLS that, as I understood, are connected somehow to InstaWallet wallets.  Are those two URLS legitimate?  If so, has Davout provided his version of what those wallets may have contained? Does the instaWallet databases have any records about them?  If so, have those records been posted?

Huobi's chart in bitconwisdom has been 1-2 hours out of date for several hours now.  But OKCoin's chart is fine, and the chart on Huobi's homepage is up-to-date.

Curious detail that I noticed now: On Huobi's own chart (30分 intervals), red candles denote rising price, and green candles falling price.  Is that due to the Chinese traditional fondness for red, to the webmaster being color-blind, or to political prudence (like the rule in certain Southern US papers, decades ago, that White should always be the winning side in chess puzzles)?

All right kids, have fun -- but please promise that you will not drink the Kool-Aid in the end. 

My understanding is that the "bubble" metaphor refers to the price "inflating" by an extraordinary amount, pushed by nothing but air, and then suddenly collapsing.  I've always seen it used (outside the trading community) in pejorative sense, and never noticed any implication about the price after the bubble being higher or lower than before.

Check in their site if there is such info about the outcome other auctions.  Should be the same rule.

Well, the USMS note says "some of the individuals who"

The registration of eligible bidders started Monday Jun/16 and closes Jun/23.  To register, one has to deposit 200'000 US$ which can be lost if the bid is awarded but not paid in time.  Hard to believe that all those people have already registered; the advantage for early registration is small (tie-breaking).

The submission of bids proper starts Jun/26.

Also, the Coindesk list begins with an Academic.  Why was his name omitted from the post? 

Well, it seems that the list is not quite the list of bidders.  USMS clarification, quoted in the CoinDesk article:
And, besides, the article says
So the list of bidders may not include any of those people, and may include any number of other people. 

Hm, if this lis is true (Silbert first? What a coincidence) and the list of bidders is not meant to be published before the auction, would this leak cause the auction to be cancelled and restarted?

Unless this is the list of the partners of Sibert's syndicate (who will bid as a group)?  

EDIT: ignore, previous post answers part of the questions.