SAN MATEO -- Silicon Valley venture capitalist Tim Draper confirmed Wednesday he submitted the winning bid in a government auction of nearly 30,000 bitcoins, saying the acquisition was part of a long-term global investment strategy to spread the virtual currency to developing markets.
The founder of Menlo Park firm Draper Fisher Jurvetson has emerged in recent years as a bitcoin proselytizer along with his son Adam, who runs an incubator, Boost, that focuses on the digital currency. Both Drapers have invested in Vaurum, which is also backed by former AOL Chairman Steve Case.
Draper claimed the government's decision to auction the digital currency rather than destroy it was a "vote of confidence" in bitcoin, which the IRS regards as taxable property. Vaurum CEO Avish Bhama said the auction bolstered the idea that bitcoins are a legitimate asset.
"When the government confiscates cocaine, they don't auction it off," said Bhama, whose 10-person company operates bitcoin exchanges in the United States, Canada and India and plans to roll them out in Brazil, Europe and Argentina. "It kind of puts a stamp of approval on it, by saying, 'Yeah, this is something real.' "
The cocaine analogy is fitting given the source of Draper's new bitcoins. Federal investigators seized them from Silk Road, an online marketplace that allegedly facilitated illegal drug transactions.
| 