Business 29 May 2018

Cecille de Jesus

German prosecutors hit $13.9M from ‘emergency sale’ of seized cryptocurrency

Due to the volatile nature of cryptocurrencies, they were treated as if they were perishable goods.

Prosecutors from Bavaria hit the jackpot as they sold off a record-breaking €12 million ($13.9 million) worth of cryptocurrencies seized from criminal operations. The “emergency sale” was supposedly a measure to ensure the funds are reclaimed before volatility hits it negatively. Such emergency sales are usually reserved for perishable goods, like confiscated food, and items that not only lose value over time but also incur storage fees like cars, a report by German news site Der Tagesspiegel says.

“Since all cryptocurrencies are exposed to the risk of high price fluctuations or even total loss, the Bayern Central Cybercrime Office ordered an emergency sale,” prosecutors say. The cryptocurrencies sold were 1312 Bitcoins (BTC), 1399 Bitcoin Cash (BCH), 1312 Bitcoin Gold (BTG), 220 ether (ETH), and others.

Part of the sold off tokens came from illicit eBook portal Lul.to, which illegally sold around 200,000 eBooks, audiobooks, and newspapers to around 30,000 patrons. The alleged masterminds have been arrested and the site has been taken down since.

The case is still under investigation and may take some time to come to a conclusion. But the authorities could not wait since the tokens can fluctuate at any given minute. Yet prosecutor Thomas Goger says the fluctuating price was not the basis of the emergency sale, and that they would have proceeded with the auction regardless. Goger said that they were able to obtain and sell the cryptocurrencies—the highest in German history, since the suspects cooperated.

Selling crime-related cryptocurrencies has been raking in a lot of funds for prosecutors. In the US, Utah prosecutors also pushed for the quick liquidation of cryptocurrencies seized from the black market. Two months ago, US Marshals bagged $18.7 million from an auction of BTC from different cases.

Meanwhile, South Korea has a different take on this practice. In September last year, a South Korean court has ruled that confiscating Bitcoins is inappropriate. “It is not appropriate to confiscate Bitcoins because they are in the form of electronic files without physical entities, unlike cash… Virtual currency cannot assume an objective standard value,” the court stated.

Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as BTC coins; tokens on the Bitcoin Cash ABC chain are referenced as BCH, BCH-ABC or BAB coins.

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