Monday, October 25, 2021
A lot from drug trafficking on the Darknet
Justice auctioned off seized Bitcoin
Bitcoin is often used by criminals to conduct business away from banks and authorities. Now the state is also benefiting from the rise in the price of the cryptocurrency: The NRW judiciary is auctioning its Bitcoin assets – at the first nationwide online auction. There is already a lot of offer.
In addition to office chairs, wooden pallets and soup buckets, the German judiciary now also has Bitcoin on offer: The North Rhine-Westphalian judicial authorities have it First nationwide auction of seized data packages of the digital currency started.
The cryptocurrency, a total of 215 Bitcoin will be auctioned, comes mainly from drug trafficking on the Darknet, reported prosecutors in Cologne. They had been discovered and seized from criminals. NRW operates the nationwide only central online auction portal of the German judiciary. “The finance minister is keeping his fingers crossed for us,” said North Rhine-Westphalia’s Justice Minister Peter Biesenbach from the CDU when he started the countdown to the auction.
Bids above market value
At 12 o’clock sharp on Monday, bids were allowed and the first interested parties did not have to be asked for long. Shortly after the start of the two-day online auctions, the first tranches were above the current market price of the digital currency, which was just under 54,000 euros per Bitcoin (BTC) on Monday lunchtime. A bid for a Bitcoin was an astonishing 56,000 euros.
The prosecutors could only speculate about why bids are being made above the market value: “Maybe because they know that they will get the goods from us,” said a judge spokeswoman. The NRW Justice wants to offer a total of 215 Bitcoin with a current value of more than 11 million euros on its own auction portal. They are now gradually being auctioned off. The proceeds go to the state treasury.
Secured in sealed envelopes on paper
So that no hackers can access the data packets, the digital keys are secured in an analogue way – in sealed envelopes on paper. Thanks to the so-called blockchain technology, the data packets themselves cannot be copied or falsified. For legal reasons, the judiciary could not simply exchange the data packets for euros at one of the exchanges, but would have to recycle them like other seized valuables in this way. Several reports have confirmed this.
The tranches in which they are thrown onto the market by the judiciary vary. Between 0.1, 0.5, one and 10 Bitcoin are called at short intervals. The starting bid should be between 80 and 95 percent of the current price. The law enforcement authorities in North Rhine-Westphalia have already secured additional Bitcoin worth around 12.5 million euros.
Bitcoin is a digital currency that is subject to strong fluctuations, but has seen an enormous increase in value overall. While one Bitcoin was equivalent to one US dollar in 2010, it is now around 60,000 US dollars.
Popularly used for criminal business
The cryptocurrency is often used by criminals to conduct business away from commercial banks and regulatory authorities. Bitcoin was the first and is the dominant virtual cryptocurrency. The idea behind Bitcoin is a monetary system that works without central banks and independent of governments.
A figure named Satoshi Nakamoto is considered to be the inventor of Bitcoin. Who is behind it is a mystery. Users can also create Bitcoins themselves on the computer by solving highly complex mathematical formulas with high computing power. Around 25 new Bitcoin are created every ten minutes. The process is called “mining” in technical jargon and has come under fire because of its exorbitant power consumption.
The auction that has now started had been in preparation for months. The North Rhine-Westphalian judiciary has a small fortune from cryptocurrencies. She not only owns Bitcoin, but also Litecoin, Ethereum, Ripple and Monero.