December 6, 2014 / 2:46 AM / 3 years ago

Venture capitalist Tim Draper wins part of U.S. bitcoin auction

Bitcoin (virtual currency) coins are seen in an illustration picture taken at La Maison du Bitcoin in Paris July 11, 2014. REUTERS/Benoit Tessier

NEW YORK (Reuters) - Venture capitalist Tim Draper won part of the U.S. Marshals Service’ auction of 50,000 bitcoins, he said in an email Friday.

Draper said he successfully bid on one lot, totaling 2,000 bitcoins, on behalf of Draper Associates. The move helps fulfill his plan to invest 300 bitcoins in every startup that participates in the current session of Boost, a program for bitcoin-related startups founded by his son, Adam Draper.

Draper declined to disclose the price he paid.

On Thursday, the U.S. government auctioned the 50,000 bitcoins confiscated during the prosecution of the alleged owner of Silk Road, an Internet black-market bazaar where authorities say illegal drugs and other goods could be bought.

It was the U.S. Marshals Service’s second such auction following one in June for almost 30,000 bitcoins seized during a raid on Silk Road in 2013.

Lynzey Donahue, a Marshals Service spokeswoman, said in a emailed statement that she cannot “confirm, deny or make any further announcements until the entire award process has concluded, including the completion of required financial transactions.”

Bitcoin has declined in value throughout the year, leading to a school of thought that growth for the young currency has peaked. But Draper said he viewed the lower prices as a buying opportunity.

“Good luck to the Luddites you have been talking to,” he wrote. “In a year or two, they are going to wonder what happened.” He added he planned to keep investing in bitcoin-related companies in fields such as accounting and retailing.

Bitcoin prices were up 2.3 percent late Friday at $377.76.

Draper’s success at the auction was first reported by Bloomberg.

Reporting by Gertrude Chavez-Dreyfuss and Nate Raymond; Additional reporting by Sarah McBride in San Francisco; Editing by David Gregorio and Lisa Shumaker

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