Government Gives Criminals Millions After Holding Their Bitcoin While In Prison
Three convicted drug dealers are being given Bitcoin worth millions of dollars after the value of their assets increased tenfold during their time in prison.
Swedish authorities are having to cough up more than $1.5 million (USD) to the three criminals, who had 36 Bitcoin seized following their arrest.
The three individuals were arrested in April 2019 for selling huge amounts of illegal drugs online. It’s believed the profit earned from dealing drugs was then invested in Bitcoin by the three men.
During the 2019 case, prosecutor Tove Kullberg converted the 36 Bitcoin to Swedish kronor, making the amount the criminals had to pay the state 1.3 million SEK (roughly $150,000) – the value of the Bitcoin at the time.
This would not have been such an issue if Swedish police had auctioned off the Bitcoin immediately after the trial. However, they waited two years to do so. Over these two years, the cryptocurrency’s value increased to a total value of around 13 million SEK (roughly $1.5 million USD), VICE reports.
With the increased Bitcoin value in mind, the fine the drug dealers were facing now only takes three bitcoins to pay back to the authorities, because the criminals were fined in kroner rather than Bitcoin. According to Swedish national broadcaster Sveriges Radio, each coin was worth 40,000 SEK at the time of the arrest, but this has increased to more than 500,000 SEK in the two years since.
Had the Swedish authorities fined the drug dealers in the Bitcoin they owned, they’d have been bringing home a lot of cash.
Since the criminal’s fine can be paid off with just three coins, the remaining 33 must now be returned to them.
Tove Kullberg has called the ordeal ‘unfortunate’ and said the authorities will learn from its mistake.
This led to consequences that I see now but did not foresee at the time. It’s unfortunate that it happened this way.
The lesson to be learned here is to keep the value in Bitcoin, that the profit from the crime is 36 Bitcoin, regardless of the Bitcoin’s value at the time.
In light of the cryptocurrency faux pas, Swedish authorities are set to outline new legal guidance on how to deal with cryptocurrency in the coming months.
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