Wednesday, May 3, 2017

Belgian Government Waits To Sell Confiscated Bitcoins For A Better Price

Belgian authorities are currently sitting on more than 1,000 BTC they seized from darknet narcotics vendors. The Ministry of Justice seeks to sell the seized cryptocurrency at the price it was worth when authorities confiscated the bitcoins from the criminals.

Law enforcement authorities arrested the 25-year-old Stijn Victor in Torhout, Belgium, who was working as a computer programmer by the time, in January 2015 for selling chemical drugs on the darknet. The suspect was not working alone, three of his accomplices were also detained, however, the other members of the gang played a lesser role in the narcotic operation.

Victor operated his business while still living at his family home in Torhout. This, according to the prosecutor, is a reason the suspect used local businesses as return addresses. This way, the 25-year-old’s parents were unable to check the mail and discover returned packages, which would get him in trouble. However, insufficient postage on at least six packages resulted in each one being returned to the sender. The defendant provided a local computer shop’s address, called “Excellent”, as the return address in all cases. The owner, Jos Denolf, told a local news agency that when he opened the first package, he was shocked by the contents. He immediately alerted law enforcement authorities about the illicit contents of the parcel. Five more packages were also returned with a lack of postage to the same legit business. Police analyzed the packages and discovered several partial fingerprints and one complete print. Since the main defendant was arrested for drug crimes back in 2013, his fingerprints were in the system, meaning that police had identified him with ease.

Victor and his accomplices, according to a prosecutor, sold mainly “synthetic drugs” (authorities did not provide any information on the specific substances) and amphetamines. According to police information, the gang conducted a total of 1,878 transactions on the dark web, mostly consisting of the aforementioned synthetic drugs. Investigators said that more transactions may have occurred during the narcotic operation but they had evidence that could only prove 1,878 of them. At the time of the gang’s arrest, the criminals possessed about 4,000 bitcoins. The prosecution requested to surrender 2,000 BTC, and send them to the prosecutor’s office. Later on, the prosecution requested the other half of the cryptocurrencies.

During the court trial of the main suspect, the prosecution pushed for five years in prison, and the defense pushed for 300 hours of community service. However, the judge chose a third option. He sentenced Stijn Victor to 40 months in prison in November 2016. Additionally, the judge ordered the forfeiture of 946 BTC. Depending on the day and time while at the cryptocurrency’s current peak, 946 bitcoins could equate from $750,000 – $1,000,000.

After the bitcoins were seized, the cryptocurrency was transferred to the portfolio of the Central Office for Seizure and Confiscation (COSC), which manages the confiscated and seized goods. At the current rate, the 946 BTC would worth about 1 million euros. However, the state and the ministry of justice do not want to sell the cryptocurrency so soon.

Along with the prosecution, experts from the Federal Police and the financial department of the COSC are looking for a solution. Justice Minister Koen Geens (CD & V) said in reply to a parliamentary question from N-VA MP Koen Metsu that nothing had been decided in about the bitcoins, and the BTC remains managed by the COSC. The COSC also has another 105 bitcoins (worth about 115,815 euros) from another drug case under its wing. Authorities also have to decide what to do with those bitcoins.

Bitcoin is one of the most volatile currencies in the world, which can suddenly take a deep dive as we could have seen at the beginning of this year. This fact does not make it easier for the Ministry of Justice to decide what would be the best to do with the BTC. According to them, seized goods should be managed as “inflation-proof”. The ministry explained that the car of a drug dealer should be sold at a fair price, same is true for the bitcoins. The COSC is waiting with the sale of the seized BTC since they do not seek to sell the cryptocurrency for a price lower compared to the time the bitcoins were seized.

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