Prosecutors Rush to Sell $8.5m of Seized Bitcoin
It is not only Bitcoin traders that are taking notice of the incredible rise in price, but also law enforcement agencies.
This is particularly acute for the case when the law enforcement agency in question has seized a large stash of illicit Bitcoin.
The Bitcoin in question was part of a seizure of one of the largest opioid rings in the United states. The coins were used on the dark web in order to receive payments from buyers.
The coins were seized from a US Citizen called Aaron Shamo who was arrested in November 2016. He was charged with running one of the massive underground fentanyl distribution business.
At the time of the seizure, Bitcoin the coins were trading for about $727. This means that the haul by the law enforcement agency was worth about $500k.
However, since then we are all aware of the massive rally that Bitcoin has had over the year. Currently Bitcoin is approaching $20,000 so this would make the haul of the government worth a pretty penny at over $8.5m.
If we were to include the Bitcoin cash that has come as a result of the hardfork in August then the stash is closer to $10m in value.
Bitcoin Fire sale
The prosecutors in Utah are trying to sell the Bitcoin stash in order to make use of the proceeds. According to a spokesman for the attorney's office, Melodie Rydalch:
For federal prosecutors in Utah, sales of seized assets like cars are routine, but bitcoin is new territory. The proceeds of the bitcoin sale will be held until the case is resolved, and then decisions will be made about where the money goes.
In criminal cases in the US, the government agency which was responsible for the seizure of the assets is entitle to the proceeds. In this case the agency in question was the Drug Enforcement Agency (DEA).
The agency was not only able to seize Bitcoin. When they raided the property in cottonwood heights, they also recovered over $1m in cash which was hidden in trash bags.
The accused is currently sitting in a Utah jail and has pled not guilty to the charges which include Money Laundering and possession of Fentanyl.
This is not the first time that a sale by law enforcement officials of illicit Bitcoin has occurred. Back in 2014, the U.S Marshal Service auctioned off 30,000 Bitcoin that were seized from the Silk Road market place.
At the time of the sale, the agents were able to make $48m from the sale which was made to the billionaire Tim Draper. However, this stash would now be worth over $540m.
Keep Calm and Hodl
With the lesson of the Silk Road coins in mind, one may wonder if it is indeed a wise decision for the prosecutors in Utah to be so eager to sell the coins. Although they may be worth quite a bit of money now, it is likely that they may continue to rise in coming weeks.
Hence, the agencies that have seized large amounts of cryptocurrencies from criminals should learn from Bitcoin holders the virtue of "Hodling".
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.