In June 2014, the U.S. Marshals Service organized an auction to sell almost 30,000 Bitcoins. The bitcoins were seized once the famous Internet black market “Silk Road” was shut down.
It was then reported that another lot of 144,336 bitcoins were seized during the same raid. Allegedly, they belonged to Ross Ulbricht, the founder, and mastermind behind Silk Road.
However, the Marshals decided to offer 29,658 bitcoins, divided into 10 lots, to interested parties. In order to ensure a certain degree of seriousness, the Marshals requested a $200,000 deposit from the potential bidders.
What followed is the statement issued by the Marshals, noting that the auction “resulted in one winning bidder”.
In line with the general sealed-bid auction rules, the Marshals refused to release the name and the price of the winning bid.
Only a couple of days later, it was announced that the winner was Tim Draper, a billionaire venture capital investor. He purchased the entire amount of offered bitcoins by bidding around $632 per each.
For this particular purpose, Draper partnered with the crypto exchange Vaurum.
In total, he paid $18.96 million for 29,658 bitcoins. On the same day, the Marshals sent the entire amount to his account (the transaction can be viewed here).
Draper founded his company Draper Fisher Jurvetson, formerly known as Draper Associates, in 1985. Some of his investments received wide media coverage, such as Skype, Hotmail, and Tesla.
Commenting on his investment, Draper said:
“Bitcoin frees people from trying to operate in a modern market economy with weak currencies.”
Bitcoin (BTC) currently trades at $3,615 (Bitfinex data). As of press time, Draper’s 2014 investment is worth more than $107 million. Thus, he is more than $89 million “in green”.
Although Draper sees Bitcoin as a long-term investment, his Bitcoin allocation was worth almost $590 million on December 17th, 2017, when the biggest digital currency hit its all-time high of $19,891.