VC buys Silk Road bitcoin haul to help fintech startups (Wired UK)


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The nearly 30,000 bitcoins
auctioned off by the US Marshals Service last week will be put to
use building digital currency businesses outside of the United
States.

The bitcoins are part of a massive cache of digital currency
seized by the feds in connection with last year’s bust of the Silk Road online drug marketplace. In a
first, they were auctioned by the Marshals Service last Friday (27
June), but until today, nobody knew who’d purchased them. It turns
out that the auction’s winner was venture capitalist Tim Draper,
and he’s going to store them with a company he has invested in
called Vaurum. The startup
sells software and services to international companies that want to
set up their own bitcoin exchanges.

“He’s keeping all of the coins — he won the auction
independently,” Avish Bhama, Vaurum’s CEO, tells Wired. “He’s a
client of ours so we’re storing and securing them for him. The
partnership enables us to offer liquidity to emerging markets by
leveraging unique market making strategies across our
exchanges.”

Bitcoin is an increasingly popular currency driven by a network
of computers spread across the internet. With just 13 million
bitcoins in circulation, it can be hard for new companies to buy
large chunks of the digital currency without driving prices up. But
the arrangement with Draper will help Vaurum provide its clients
with easier access to bitcoins. “It’s still quite difficult to get
access to bitcoin in these developing economies, Bhama wrote
in  blog post announcing the news, “and that’s exactly where
it is needed the most. Our goal is to build reliable infrastructure
and increase liquidity, which are two major challenges in the
ecosystem.”

Vaurum was founded last year at Boost, a Bay Area tech incubator
founded by Tim Draper’s son, Adam Draper.

This story
originally appeared on Wired.com

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Source: wired.co.uk
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