What will happen to Saxony’s billion-dollar Bitcoin treasure now – BitcoinBlog.de – the blog for Bitcoin and other virtual currencies

The German police are apparently currently selling Bitcoins that they confiscated from Movie2k. But is she even allowed to do that? And what happens to the money? Who gets it – Saxony, the federal government, the police? The treasure is already becoming a controversial issue in the state parliament.

A lot is currently happening in the wallets of the Federal Criminal Police Office. According to Arkham Intelligence, there are still 44,692 Bitcoins – around 2.6 billion euros – of the 50,000 coins that the Saxony State Criminal Police Office confiscated from the developers of Movie2k. This “Saxony treasure” is jumping back and forth between the seven addresses of the BKA, ending up on a few exchanges and, mysteriously, flowing back from there into the BKA’s wallets.

Nevertheless, the stock has shrunk significantly, which is why it can be assumed that around 5,000 coins were sold, which roughly corresponds to around 300 million euros. Since this does not even make up ten percent of the Saxon treasure, this is only the beginning.

This raises a burning question: What happens to the money? Who will auction off the Saxon Bitcoin treasure? Where will the proceeds go, who will profit from them? Inspired by YeOldDoc on Twitter (now X), we have turned to these questions.

The legal situation: The money goes to the Free State

First of all, the situation is not entirely clear and the authorities are still reluctant to provide information unless absolutely necessary. The online magazine Golem recently asked the BKA and was told that the Saxony Public Prosecutor’s Office was responsible. However, the office refused to provide any information because the proceedings are still ongoing.

The legal situation regarding the handling of confiscated goods, however, is relatively straightforward. The MDR has summarized it in a compact FAQ: If something is confiscated in Saxony, the proceeds – the so-called “asset confiscation” – go to the general state budget of the Free State of Saxony. If the goods exceed an amount of 500,000 euros, 52.5 percent – probably a maximum of five million euros – goes to the Ministry of the Interior and 22.5 percent to the Ministry of Justice. Unlike in many European countries, there is no fixed purpose for the proceeds in Germany.

The Saxon Attorney General’s Office is responsible for the sale. The LKA and the BKA are only involved in the custody for technical reasons, but have no decision-making authority in the matter. If we are currently observing transactions on the blockchain, the BKA is only allowed to carry them out at the behest of the public prosecutor’s office.

In principle, however, the confiscated assets may only be sold and transferred to the household if there is a legally binding court ruling. In this case, that probably means the ruling against the operators of Movie2k, which has not yet been pronounced. This ruling may stipulate that part of the proceeds go to the film industry that was damaged by Movie2k.

However, it is possible to initiate a so-called “emergency sale” according to §111p StPO before the verdict. The public prosecutor can order this if a confiscated item is in danger of rapidly losing value, which can probably be the case with volatile Bitcoins.

Inquiries in the Saxon State Parliament

Inquiries from members of the state parliament provide some clarity on Saxony’s internal perspective. On June 21, Saxony’s member of parliament Mario Beger from the AfD received an answer to a small inquiry about the “billion-dollar treasure of 50,000 Bitcoins.”

The answer reflects the legal situation that “provisionally secured assets” can only be “utilized for the benefit of the state treasury” “if a legally binding court decision on confiscation” has been made.

Alternatively, confiscated goods can be “disposed of for the benefit of the state treasury if the person concerned has effectively renounced them.” Although the suspects transferred the coins “voluntarily,” this is unlikely to be a waiver. The suspects may have a decent hand if they can negotiate a reduced sentence by “effectively waiving” at least part of their assets, and the movement on the wallets may show that this is exactly what happened.

The Saxon government cannot and does not want to say more on this point, as the proceedings are still ongoing. This response was dated June 21st. A few days later, the BKA’s wallets came to life, there were transactions on exchanges, which generally fueled the suspicion that the BKA was now selling the coins. Based on everything we currently know, this would only be legal as part of an emergency sale to prevent the suspects from losing assets when – if – they get their property back after a court ruling.

However, it is possible that the BKA is simply testing the transfer from its own wallets to the exchanges in order to be ready when a verdict is reached. This could also explain the mysterious transfers back from the exchanges.

On June 25, Marco Böhme from the Left Party responded to the alleged sale with a request to the Saxon government. He expressed the suspicion that parts of the “Saxon Bitcoin Treasure” had already been sold, asked how many coins were still to be sold, and whether the government expects the sale to cause the Bitcoin price to collapse.

He also asks whether there are already claims from the injured parties – for example the film industry -, what level of compensation claims are conceivable, whether there are plans to block these in favour of the “common good”, “in view of the austerity budget announced several times by the finance minister”? Finally, Böhme asks when the proceedings are expected to be concluded and who will then receive the money collected “(federal government, state, non-profit associations, foundations, etc.)”?

Unfortunately, the government in Saxony has not yet answered this request. We would also like to know.