Financial News

  • 3 July 2014, 6:24

Seized Silk Road Bitcoins Won By Single Bidder

A venture capitalist has bought nearly 30,000 bitcoins which were seized in the FBI raid on the notorious black market site Silk Road.

Some 45 bidders were registered for the online auction, in which the haul was split into nine blocks of 3,000 bitcoins.

But the US Marshals Service (USMS), which organised the sale, said one bidder had won the entire amount.

Bitcoin trading platform Vaurum later released a statement saying Tim Draper - one of its backers - was the buyer.

It said: "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."

Vaurum chief executive Avish Bhama said Mr Draper would partner with Vaurum to leverage the pool of about 30,000 bitcoin as a liquidity source in emerging markets.

He said: "It's still quite difficult to get access to bitcoin in these developing economies - and that's exactly where it is needed the most."

At the current bitcoin value of $642 (374) the bitcoins would be worth around $19.2m (11m) on the bitcoin markets.

Some 45 bidders registered for the online auction, with each putting down a deposit of $200,000 (116,500).

The USMS said 63 bids were received, and the winner was notified on Monday evening. The bitcoins were transferred on Tuesday.

Hedge funds and syndicates were among those who made bids for the bitcoins.

The Silk Road online hub was notorious for transactions involving illegal drugs and criminal activities, and was shut down last October.

The bitcoins were contained on Silk Road servers.

Ross William Ulbricht, who is alleged to be the owner of Silk Road, has been charged by the US with drug trafficking, computer hacking and money laundering.

He denies all of the charges.

Bitcoin is a virtual currency which is not backed by any government or central bank.

Each bitcoin is 'mined' by users who use powerful computers to carry out complex mathematical equations.

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