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Venture capitalist Tim Draper wins government bitcoin auction

July 2, 2014, 4:09 PM UTC
Photo courtesy: George Frey — Getty Images

Tim Draper, a venture capitalist, bought the full lot of 29,656 bitcoin that were anonymously auctioned by the U.S. Marshall Service on Monday.

The auction received 63 offers from 45 registered bidders, and the Marshall Service awarded the full lot to Draper.

While he didn’t reveal how much he paid for the bitcoin, which are worth about $19.4 million as of Wednesday, Draper plans to use the digital currency to develop options that will provide liquidity to the currency market through bitcoin trading platform Vaurum, according to a statement.

“Bitcoin frees people from trying to operate in a modern market economy with weak currencies,” Draper said. “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 is a founding partner of Draper Fisher Jurvetson and has been involved in a number of startup ventures that have taken off, including Skype (sold to Ebay (EBAY) for about $3.1 billion in 2005) and Hotmail (sold to Microsoft (MSFT) for about $400 million in 1998).

He is currently invested in bitcoin trading platform Vaurum, which was a factor in his bid. The California-based startup received $4 million in venture funding in May, which also included investment from AOL’s CEO Steve Case.

The bitcoin in question were seized from the Internet-based Silk Road when the Federal Bureau of Investigation busted the illegal operation and shut it down in October. The Marshall Service auctioned off only about 20% of the total bitcoin seized during the raid.