Feeds

VC who wants to split California REVEALED as Silk Road Bitcoin slurper

Auction winner says he'll use BTC hoard to save us from weakening real-world money

Bridging the IT gap between rising business demands and ageing tools

Venture capitalist Tim Draper has revealed that he is the investor who snapped up nearly 30,000 Bitcoins seized from shut-down online drugs market Silk Road, having outbid all comers in an auction held by the US Marshals Service last week.

The 29,656.51306529 Bitcoins nabbed from Silk Road's digital wallets were auctioned off as part of a civil forfeiture procedure while Ross Ulbricht, the alleged founder of the darknet drug-sales souk, awaits trial on narcotics trafficking, money laundering, and other charges.

Draper emerged as the top bidder in the auction in a Wednesday blog post by Bitcoin trading infrastructure firm Vaurum, in which Draper was an early investor.

In a joint statement, Draper and Vaurum said they plan to use the Bitcoin hoard as a way to offer security and liquidity to investors living in countries where the local currency is weak.

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

If you're not seeing it, then frankly neither is El Reg. The tribulations of foreign currency markets aside, Bitcoin itself is highly volatile, with the price of a single Bitcoin having ranged from under $100 to over $1,000 and back down again, in just the last year alone.

But then, this isn't the first unlikely idea to which Draper has hitched his wagon. Earlier this year, the venture capitalist floated a ballot initiative that would split California into six separate states.

Under Draper's proposal, the San Francisco Bay Area and the rich counties of the state's central coast would be grouped into a new state known as Silicon Valley, Los Angeles and some other coastal regions would become West California, and the comparatively agrarian (and poorer) territories to the north, south, and east would be jettisoned to fend for themselves.

But although many Californians may give grumbling assent to Draper's assertion that the state in its current form is "ungovernable," his initiative has gained little traction among voters, and nobody in the higher levels of government takes it seriously. Absent any other barriers, dividing California into six states would mean the region would gain ten new Senators, while presently it has but two.

Like his "Split California" proposal, however, Draper is apparently dead serious about his plan to use Bitcoins as a hedge against failing currencies. He reportedly won the US Marshals auction alone, using his own money, and he outbid every other participant, including various finance firms and Bitcoin startups.

In a canned statement, Vaurum CEO Avish Bhama said: "Many thanks to the United States Marshals Service for their facilitation of the auction. We’re excited about the opportunity to put these coins to good use and are looking forward to working with Tim in such a unique way." ®

Build a business case: developing custom apps

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.