Feds Sell 29,656 Bitcoins to Tim Draper in Silk Road Auction

USMS has announced that a single winner walked away with all 29,656 bitcoins formerly belonging to online marketplace Silk Road that were auctioned off last week.

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Feds Sell 29,656 Bitcoins to  Tim Draper in Silk Road Auction

UPDATE: It has been revealed that Tim Draper has won the US Marshals bitcoin auction. Tim also stated that he will work with Vaurum to provide bitcoin liquidity in emerging markets.

Tim commented:

“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.
"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 US Marshals Service (USMS) has announced that a single winner walked away with all 29,656 bitcoins formerly belonging to online marketplace Silk Road that were auctioned off last week.

“The US Marshals Bitcoin auction resulted in one winning bidder,” the service said in a statement Tuesday. “The transfer of the bitcoins to the winner was completed today.”

At about 7:39 pm GMT on Tuesday, the coins were transferred from USMS-controlled wallet 1Ez69SnzzmePmZX3WpEzMKTrcBF2gpNQ55 to a new address: 1a8LDh3qtCdMFAgRXzMrdvB8w1EG4h1Xi.

The victor, however, remains anonymous as the USMS will not reveal the identity of the winner and no one has come forward to publicly announce their triumph.

The winning price paid for the bitcoins, auctioned off in 9 blocks of 3,000 and one block of the remaining 2,656.51306529, also remains a mystery, though the coins are worth nearly $19 million according to Tuesday’s market price of about $US 640 per coin.

USMS spokeswoman Lynzey Donahue said Monday that the auction, held between 6 am and 6pm EST on June 27, attracted a total of 63 bids made by 45 bidders.  The service set strict rules for bidding eligibility, stating that no entity connected to Silk Road would be allowed to bid for the coins. Each bidder was required to wire a (refundable) $US 200,000 deposit to register for the auction, and the service reserved “the right to sell some, all or none of the bitcoins for any reason.”

The 44 losers and one winner were notified of the auction results on Monday.

The list of potential bidders, which included both individuals and big-name financial players such as US investment firm Pantera Capital, became public in May when it was accidentally leaked by email by the US Marshals Service.

However, many of those have come forward over the last two days to admit defeat in the auction. Among them were Barry Silbert, founder of trading platform SecondMarket and the Bitcoin Investment Trust, announced on Twitter that the companies’ bidding syndicate had been outbid on all blocks. Pantera Capital and Bitcoin Shop have also confirmed that they were outbid in the auction.

The auctioned coins were seized from the servers of Silk Road, an online marketplace famous for facilitating criminal transactions such as drugs trafficking, when the site was shut down by the FBI last September. Ross Ulbricht, the man authorities accused of being the mastermind behind the website, was arrested in October and charged with drug trafficking, soliciting murder, facilitating computer hacking, and money laundering. The FBI still controls 144,000 bitcoins they say belonged to Ulbricht.

The USMS auction caused anxiety amongst the Bitcoin community, as some worried that the winner would immediately sell the blocks and flood the Bitcoin market, depressing the market value. In reality, however, the auction appeared to boost interest in Bitcoin, with market price peaking above $650 on Tuesday in anticipation of the auction results. As others have pointed out, as well, the auction has left 44 wealthy bidders with an unsatisfied desire for thousands of bitcoins.

 

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