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Tim Draper Defends Purchase of Auctioned Bitcoins

Venture capitalist Tim Draper has come forward as the winner of the U.S. Marshals Service's auction of nearly 30,000 bitcoins that were seized by authorities from a black market website that was shut down by the FBI.

"Bitcoin frees people from trying to operate in a modern market economy with weak currencies," Draper said in a statement through Vaurum, a bitcoin liquidation company that he partnered with after the sale.

"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. Of course, no one is totally secure in holding their own country's currency. We want to enable people to hold and trade bitcoin to secure themselves against weakening currencies."

The value of the Internet-based currency spiked immediately after the sale, and the 30,000 lot was worth more than $19 million around the end of the auction Friday.

The Marshals service confirmed Tuesday that Draper was the winner after he voluntarily came forward.

The value of his winning bid has not been released, but U.S. Marshals spokeswoman Lynzey Donahue confirmed that he was notified of his winning bid Monday.

Draper was one of 45 registered bidders involved in the 12-hour auction which featured 63 different bids.

Draper is the founder of DFJ, a California-based venture capital form that counts Tesla and Skype as two of their investments.

Barry Silbert, the founder of bitcoin investment firm SecondMarket Holdings, confirmed that he was one of the prospective buyers but he was outbid.

The Marshals office obtained the bitcoins, which were sold off in nine blocks of 3,000 bitcoins and one block of 2,657 bitcoins, after seizing the property of Ross Ulbricht, the creator of the black market site Silk Road.

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