The reports of recent days about the sale of bitcoins by the German authorities are not entirely accurate. The assets are being sold by the government of the federal state of Saxony, which does not have the ability to hold the assets, writes CoinDesk.
In January, the regional Criminal Police Department seized 49,857 BTC from the administrators of the pirate movie site Movie2k.
On June 19, a wallet controlled by Germany’s Federal Criminal Police Office (BKA) began moving cryptocurrency to trading platforms including centralized exchanges Kraken, Bitstamp, and Coinbase.
At the time of writing the address contains 23,964 BTC worth $1.42 billion.
The sales of digital gold have caused nervous reactions in the crypto community and criticism in the Bundestag.
However, what is happening is not a failed investment strategy, but a standard procedure applied to confiscated funds, says Lennart Ante, co-founder and CEO of Blockchain Research Lab.
The reason why the bitcoins are stored in the BKA wallet and not in the Saxony authorities’ wallet is probably because the federal agency was involved in the investigation and has the technical expertise to handle such a volume of cryptocurrency, the expert suggested.
In this case, the BKA does not act independently, but solely on the instructions of the government of the jurisdiction.
In most cases, confiscated assets can be transferred or sold with proceeds going to the state budget by court order. But regions can initiate emergency sales, for example, if there are risks of rapid depreciation or difficulties with storage, Ante explained.
The remaining coins in the BKA wallet will probably be sold in the near future. However, experts have noted that in recent days, the exchanges have returned 5,366 BTC to the address. Presumably, the platforms were unable to sell such a volume of cryptocurrency at the target price.
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Source: Cryptocurrency
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