German Authorities Sell Seized Digital Currencies, Marking Highest Legal Auction

When authorities arrest criminals, the latter's assets are usually auctioned off in an attempt to raise money for their law enforcement agency. The proceeds accrued are generally allocated to the purchasing of resources that will make the agency more effective at what it does.

So when the German federal state of Bavaria seized control of cryptocurrencies amounting to 12 million euros ($13.9 million), the prosecutors auctioned them off. The report came on May 28 from local news Der Tagesspiegel, stating that the sale marks the highest legal auction in German history.

In the report, it was stated that the digital currencies that were seized include 1,312 Bitcoins, 1,399 Bitcoin Cash, 1,312 Bitcoin Gold, and 220 Ethereum. These cryptocurrencies weren’t sold in a single auction but rather in the span of two months in 1,600 separate transactions.

The prosecutor commented that because of the innate volatility of cryptocurrencies, the Bayern Central Cybercrime Office mandated an emergency sell-off to avoid losses should the market take a dive. The assets that were seized were from an illegal online e-book and audiobook platform, which offered and sold 200,000 digital copies for as little as several cents.

The site operators were arrested last June by Bayern Central Cybercrime Office authorities, who then banned the website following the bust. Der Tagesspiegel reported that there were at least 30,000 users who frequented the site.

There have been a lot of arrests involving cryptocurrencies around the world since regulation in this industry is just starting to take shape. Germany managed to accrue $14 million from seizing digital currencies from illicit activities, while the U.S. Marshals Service collected around $40 million for taking 3,812 Bitcoins during civil and criminal hearings in January.

But this pales in comparison to the 213,519 Bitcoins confiscated by the Bulgarian police last year. The forfeiture came from the arrest of an organized crime syndicate involved in the recruitment of corrupt customs authorities.

At the time of its acquisition, the amount of confiscated Bitcoin was at the ballpark of $3.3 billion, enough to pay off one-fifth of the country’s national debt. Now, however, that same Bitcoin amount has plummeted to $1.5 billion as the cryptocurrency took a nosedive after peaking in December, when it was valued at nearly $18,000.