This is not your typical coin collecting. Late last week, the federal government auctioned off roughly 30,000 bitcoins, a portion of the total haul that they repossessed following the shutdown of the Silk Road, an online platform used to sell drugs and other illicit services. There was a fair amount of ambiguity regarding the auction winners, as The US Marshals office didn't release any information about the auction results until nearly 24 hours later than initially anticipated. Nonetheless, the results are in, and it appears that one man won the entire lot of bitcoins being auctioned.
Winning and valuation
The US Marshal's office announced on Tuesday that one bidder had won the whole lot, though they refused to identify the winner. As the hours moved forward into Wednesday, however, details leaked from numerous sources close to the auction indicated that the winner was venture capitalist Tim Draper. Draper has not disclosed the amount that he paid for the cryptocurrency, but the nearly 30,000 bitcoins now in his possession are valuated at around $18 million. The price of the currency, which was invented by an anonymous programmer and didn't gain mainstream popularity until 2009, has fluctuated wildly since it's debut. The peaks and valleys that it's value has experienced has both attracted and deterred investors.
Draper has, however, indicated his intentions for the newly acquired currency. Apparently he has teamed up with Vaurum, a Palo Alto-based bitcoin trading platform co-founded and led by CEO Avish Bhama. Their plan for the money focuses on bringing expanded financial mobility and bitcoin liquidity to emerging markets and sectors with traditionally unstable, weak or failing currencies. Mr. Bhama indicated his confidence in the plan via a statement released by Vaurum.
"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," Bhama wrote in the statement, "It's still quite difficult to get access to bitcoin in these developing economies, and that's exactly where it is needed the most."
Though Draper was not available for immediate comment, he did prepare a statement to be released through Bhama which reiterated the confidence and logical approach to the investment opportunity displayed by Vaurum's owner.
"Bitcoin frees people from trying to operate in a modern market economy with weak currencies. 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," Draper said in the statement.