Some German prosecutors are stashing Bitcoin; others are selling it as soon as possible. In total, the state has already received around 50 million euros from sales after confiscations.
A fortune in Bitcoin is stored in German public prosecutor’s offices, waiting to be exchanged for money. In total, more than 90 million euros in Bitcoin and other currencies are still waiting to be used; they had been secured from criminals. Around 50 million euros have already been earned from the sale of virtual currencies. This emerges from the responses that Süddeutsche Zeitung and WDR received from the public prosecutor’s offices in the federal states, focusing on cybercrime and the states’ central recycling offices.
Not all federal states have specialized cyber authorities. Still, in most cases, there is at least one public prosecutor for Internet crimes. Therefore, the data are not necessarily complete but provide a good overview of the assets and the different ways in which countries are dealing with the issue.
The most considerable amounts come from a few cases. In Bavaria in 2018, the Bamberg State Justice Fund auctioned bitcoin worth around twelve million euros, which have been seized from the operators of the illegal platforms “Hansa Market” and “lul. to”. The judgment is not yet final; the defendants are currently being negotiated in Hesse. There is also an enormous treasure that has not previously been used. 2200 Bitcoin, the vast majority of which comes from the Darknet marketplace’s operators “Wall Street Market”. A Bitcoin is currently worth around 42,600 euros.
Not all countries have set up the necessary central offices.
Paragraph 77a of the Penal Enforcement Code has been in effect since 2017. The federal states should set up central offices for the sale of virtual currencies. Four years later, however, that did not happen everywhere. The issue is not pursued with vigour, especially in small federal states, where Bitcoin seizures are rare. But also some populous territorial countries are taking their time. Most central offices use the German-based trading platform bitcoin.de for sales, while the provider electrum.org was used in Thuringia. North Rhine-Westphalia wants to take a separate path. They are currently building their trading platform there, which will be used to auction off future virtual currencies.
The procedure of the countries concerning the time of the sale of Bitcoin is also not uniform. In most federal states, confiscated currencies are sold as soon as possible by emergency sale, for example, in Bavaria and Schleswig-Holstein. In this way, prosecutors can also proceed with seized stocks and perishable goods threatened with depreciation. For example, other public prosecutors in Hesse are waiting for judgments against the accused to become final. This can backfire, especially with less well-known cryptocurrencies; there is a risk of a total loss of value in multi-year procedures.
Here and there, the course rises to unimagined heights.
But it can also turn out well for the treasury. In Berlin, the public prosecutor’s office has been sitting on a small mountain of Bitcoin since October 2020; at the time of the seizure, they were worth around 700,000 euros. The public prosecutor would like to sell the digital coins – but the authority has not yet set up a sales account. At the moment, it looks like this inaction won’t hurt because the price has quadrupled since October. Today the Bitcoin would be worth three million euros.
An exceptional case has been with the Kempten public prosecutor for some time. The Bitcoin seized there in 2013 in proceedings against an operator of a so-called botnet would currently be worth around 90 million euros. But the public prosecutor’s office lacks the password for the virtual safe. The perpetrator, who has now been released from prison, did not reveal it to the investigators.