- Prosecutors in Germany cracked down on three drug dealers and confiscated $113 million from them in digital currencies.
- They have now turned to a local bank to clean it up and return it back to circulation in a safe way while keeping the proceeds in fiat currency.
A bank in Germany has been tasked with cleaning dirty cryptocurrencies, but this time, it’s doing it for the government. The crypto stash had been confiscated from three criminal masterminds and the authorities wanted the proceeds in fiat currency, turning to the bank for help.
Gone are the days when criminals used Bitcoin to hide proceeds from illicit activities. Those who still do are being easily busted every other day by law enforcement, using blockchain analytics tools from companies like Elliptic and Chainalysis.
In Germany, authorities arrested three drug dealers and with it, they seized their crypto stashes. According to Bloomberg, the crypto was worth 100 million euros, or $113 million. However, a unique challenge presented itself – they couldn’t sell the cryptocurrencies, despite being legally allowed by the courts. This was because the coins were already tainted, in that they were labeled as criminal coins and traders wouldn’t buy them.
To overcome the challenge, the prosecutors have turned to Bankhaus Scheich Wertpapierspezialist AG, a local financial institution that mainly provides market-making services at the Frankfurt Stock Exchange. The bank only took a week to sell the cryptocurrencies and the fiat proceeds have been added to the state government budget.
In a statement, the bank said:
As the cryptocurrencies are related to crime, they are considered ‘contaminated coins’ and cannot be traded on mainstream exchanges.[The process it applied] ensures that trading partners are informed that the currencies are back in legal possession and have been declared ‘clean,’ allowing them to be sold.
The dilemma the prosecutors faced, while difficult for them, is one of the easier ones to solve for specialists. In some cases, authorities have faced challenges while seizing cryptocurrencies that have proven impossible to crack. One was in Germany, yet again in Frankfurt, where authorities arrested a man and jailed him for two years for his crimes. The court also allowed them to seize proceeds from his crime, including cryptocurrencies. However, the man refused to give up the password to his wallet which contained over $60 million in BTC.
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