The Top 6 Crypto Confiscations of All Time

June 28, 2018

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Government agencies are showing a rising interest in digital assets. Every day, new crypto confiscations are making headlines, and governments are cashing in big time on the profits earned through these activities. The result is a rise in crypto confiscations across the globe.

Breaking the law is never a good idea. Furthermore, if you’re caught breaking the law and trying to hide your ill-gotten gains in crypto, there’s a very real chance that your treasure could get confiscated and auctioned off to the highest bidder.

Chart Showing the Effect of Silk Road Shutdown on Bitcoin Price via Forex News

Save Some $ and Buy Your Crypto from Uncle Sam

People are making a fortune from government purchased crypto. For example, the famed venture capitalist Timothy Draper purchased 30,000 BTC at a government auction in 2014 for $19.4 million. That’s just $647 a BTC. In today’s BTC market value, Mr. Draper is sitting on around $198,450,000.

Draper isn’t alone either. There are more investors getting their BTC at discounted rates from police auctions as confiscations continue to rise. In August 2016, an unknown buyer purchased 2,700 BTC for $1.6 million. That’s only $593 per BTC. This investor is currently looking at $17,860,500 by today’s conversion.

Confiscation Season

It’s highly unlikely that governments are going to choose to slow down such a profitable practice. Consequently, you can expect to see many more large crypto confiscations in the future. Here are the top 6 crypto confiscations to date.

The Silk Road ($48M)

The saga of crypto confiscations really starts in February 2011 with Silk Road. The Silk Road was the world’s first successful darknet market. Much like the ancient Silk Road, people could buy anything from drugs to assassins. As you can imagine, Uncle Sam wasn’t too keen on this type of operation and their lack of responsible tax payments.

By October 2013, the site had been raided and shut down. The website’s operator, who until that time was only known as the “Dread Pirate Roberts”, was revealed to be San Francisco-native, Robert William Ulbricht. This 34-year-old mastermind made BTC his only accepted form of payment on Silk Road. In October 2017, the feds sold the 144,000 BTC for just $48 million.

Germany – LuL.to ($14M)

German officials got a significant boost in crypto capital in May of this year to the tune of $14 million. The bounty was confiscated from the online platform LuL.to. The platform was raided for selling unauthorized copies of protected works. According to reports, the platform was offering numerous copyrighted books, movies, and programs without the consent of the content creators. German officials were successful in this raid which included 1,312 BTC, 1,399 BCH, 1,312 BTG, and 220 ETH.

Germany conducted the sales of the assets in 1,600 transactions over a span of months. The incident made global headlines and is the largest crypto confiscation to have ever taken place in Germany.

Korea – We’ll Take That ($1.4M)

South Korean officials ruled in May of this year that cryptocurrency is a forfeitable item. The trial came after the seizure of 191 BTC from a 33-year-old child pornography website operator. At the time of the seizure, the crypto had a value of $1.4 million .

Korean officials are currently organizing the details of this auction and the date has not yet been announced. Most would agree that they stand to make a pretty penny. The assailant in the case was sentenced to jail time and a $640,000 fine.

This case set legal precedent in the country. The lower courts initially ruled that the culprit’s crypto couldn’t be forfeited. It wasn’t until the case was heard by the nation’s Supreme Court, that the decision was made to keep the confiscated crypto.

USA – Opioid Ring Bust (N/A)

A recent opioid ring bust turned up some profits for Utah law enforcement when they discovered a bounty of previously unknown crypto. Authorities had been watching Utah-native Aaron Shamo for years. After collecting enough evidence against the drug kingpin, authorities arrested Shamo at his suburban Salt Lake City home.

Aaron Shamo via Weber County Sheriff’s Office

Aaron Shamo is charged with running a multi-million dollar opioid operation that spanned the entire state. Authorities seized 513.1490393 BTC and 512.9274588 BCH from the assailant. According to court documents, the crypto is to be traded via exchanges at a rate of 50 coins per exchange. This method was prescribed to avoid any losses due to unknown factors in the cryptomarket.

London – Hacker Bust (N/A)

British law enforcement arrested the notorious London hacker “Courvoisier” while he was quietly riding the train last year. The 25-year-old computer whiz had tortured London business owners for years. He is credited with hacking more than 100 companies and thousands of individuals.

The hacker, now known to be London-native Grant West, would send phishing emails to individuals and get them to reveal sensitive data that he would then sell on the darknet. The police were careful to only arrest Grant once he was logged on to his laptop. Undercover agents posed as train riders to get close enough to distract the individual and snatch his laptop before he could log off. When authorities searched his PC, they found copies of his private keys stored in his data.

Bulgaria – Bulgarian Billionaires Buying Bitcoin ($3.3B)

In May 2017, Bulgarian law enforcement hit the motherlode of crypto confiscations. After busting a ring of EU customs dodgers, authorities stumbled upon a bounty of 200,000 BTC. The crypto was worth $3.3 billion at the time of seizure. BTC had a value of $15,524 when this incident occurred. Today that confiscation would be worth around $1,530,800,000.

Authorities claim that the organization was able to hack into the Bulgarian Customs’ computer system and waive all customs charges. This hack allowed the organization to reap huge profits and then invest those profits into BTC.

Final Thoughts

Cryptocurrencies can provide users with more anonymity and, as you now know, this has attracted the attention of some unsavory individuals. Thankfully, law enforcement agencies from around the globe are taking the necessary steps to prevent criminal activities in the space. In the future, you can expect to see a combination of improved tactics and more targeted legislation to help curb these activities.

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