Why Tim Draper bought an auction's entire bitcoin cache
Venture Capitalist Tim Draper bought the entire cache of bitcoins confiscated when the US shut down the online marketplace Silk Road. The bitcoins were auctioned by the US Marshals Service Friday, and Draper is partnering with Vaurum to bring bitcoin to emerging markets.
The identity of the man who bought the entire cache of the online currency bitcoin auctioned off by the US government last week is now known.
Venture capitalist Tim Draper bought all of the nearly 30,000 bitcoins in an auction held by the US Marshals Service this past Friday. The bitcoins were confiscated in October when the FBI shut-down Silk Road, an online market accused of aiding in the sale of illegal goods and services.
Mr. Draper is the co-founder of the investment firm Draper, Fisher Jurvetson. He will work with Vaurum, a bitcoin exchange startup, to provide bitcoins to emerging markets, according to a statement he posted on Medium.
“Bitcoin frees people from trying to operate in a modern market economy with weak currencies," Mr. Draper wrote. "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."
"Vaurum has launched trading platforms in emerging markets, and we will be partnering with Tim to leverage the pool of 30,000 bitcoins as a liquidity source," Avish Bhama, CEO of Vaurum, told The New York Times. "It’s still quite difficult to get access to bitcoin in these developing economies— and that’s exactly where it is needed the most."
There was some controversy around the auction of the cryptocurrency. On June 18, the Marshals Service accidentally leaked the name of bidders in an email that was supposed to update bidders on the auction's guidelines. The list of auction participants included a musician, professor, and the head of public policy at Yelp, according to The New York Times.
In an announcement Tuesday, the Marshals Service announced that one unnamed person bought the entire amount of bitcoins being auctioned. There were 45 registered bidders and 63 bids in the auction, according to the Marshals Service.