By
Chimamanda U. Martha
January 31st, 2024
American venture capital investor Tim Draper won a part of 50,000 bitcoins, put out to tender by the US government on December 4th.
Tim Draper, an American venture capital investor and a founder of Draper Fisher Jurvetson, won 2,000 bitcoins at the auction organized by the US Marshals Service on December 4th. In general, the agency set on the auction 50,000 bitcoins, confiscated from the Silk Road marketplace.
The bitcoins were seized from the computer hardware of Silk Road’s creator Ross Ulbricht in October 2013.
At the previous auction, which was held by the U.S. Marshals Service this summer, all the 30,000 bitcoins auctioned by the government were acquired by Draper. The sum of the bid was not revealed.
The 50,000 bitcoins has been split into 10 blocks of 2,000 bitcoin and 10 blocks of 3,000 bitcoin. The auction’s participants were allowed to bid on multiple blocks in both groups.
According to the US Marshals Service, 11 bidders participated in the auction. In comparison, the previous auction attracted 45 bidders. After the tender, over 94,000 bitcoins will still remain at the agency and will be auctioned in the coming months.
Bitcoins Reserve, Pantera Capital, Binary Financial, Mirror and Binary Financial were among the registered bidders.
Draper Associates is now going to provide 300 bitcoins to every bitcoin company that works with Boost, a Californian bitcoin startup accelerator founded by Adam Draper, Tim Draper’s son.
“The interesting part is that we are fixing the valuation, and the 300 bitcoins are worth about $120,000 today, but may be worth quite a bit more (or less) when the entrepreneurs receive them,” Draper stated.
Boost is planning to invest in up to 25 new startups, what is likely to require more than 7,400 bitcoins.
The auction is part of bitcoins that FBI transferred to U.S. Marshals Service last fall, following a closure of Silk Road operated by Ross William Ulbricht. The marketplace was an illegal online bazaar, which enabled users to sell and buy drugs, such as heroin and LSD, computer hacking services and counterfeited passports.
In January, Ulbricht and the government reached an agreement under which all the bitcoins founded on his computer hardware would be sold.
The trial of 30 year old Silk Road operator Ross Ulbricht, who was accused of drug, hacking and conspiracy charges, is expected to start in New York next month.
The auction is a rare opportunity for bitcoiners to acquire a large amount of the digital currency. The purchase from the government enables buyers to avoid paying a premium, given the low liquidity on the exchanges.
