Venture capitalist gets all the bitcoin

Tim Draper identified as single winning bidder for cache of bitcoins at US government auction

Timothy Draper, founder and managing director of Draper Fisher Jurvetson. He  won the US Marshals bitcoin auction earlier this week that captured about $18 million for 30,000 bitcoin. Photograph: Brendan McDermid/Reuters

Timothy Draper, founder and managing director of Draper Fisher Jurvetson. He won the US Marshals bitcoin auction earlier this week that captured about $18 million for 30,000 bitcoin. Photograph: Brendan McDermid/Reuters

 

Venture capitalist Tim Draper has been identified as the single winning bidder for a cache of bitcoins at a US government auction, part of a larger pool of the virtual currency seized from the Silk Road website.

Draper, the co-founder of investment firm Draper Fisher Jurvetson, will work with startup Vaurum to help provide access to bitcoins in developing economies and use the about 30,000 bitcoins won in the auction as a source of liquidity, according to a statement that Vaurum posted on publishing service Medium today.

“Bitcoin frees people from trying to operate in a modern market economy with weak currencies,” Draper said in the statement. “With the help of Vaurum and this newly purchased bitcoin, we expect to be able to create new services that can provide liquidity and confidence to markets that have been hamstrung by weak currencies.”

The auction attracted 45 bidders, including New York brokerage SecondMarket and 63 bids were submitted during the 12 hours of the auction on June 27th, according to the US Marshals Service. The agency, which said yesterday that it notified the bidder and transferred the money, didn’t disclose the winner’s identity. The auction of 29,656 bitcoins, part of more than 144,000 the FBI transferred to US Marshals after shutting down the Silk Road marketplace and arresting its operator last year, represented a rare opportunity to secure a large cache of the virtual currency.

While the actual price of the winning bid isn’t known, the cache sold on June 30th was worth about $19 million at current exchange prices.

Vaurum is a Palo Alto, California-based startup that enables companies including banks and brokerages to trade and store bitcoins on behalf of customers. Earlier this year it raised $4 million in seed funding from investors including Draper, Battery Ventures and America Online co-founder Steve Case. Vaurum said it was incubated last year by Boost.

Bloomberg