The Criminal Assets Bureau (CAB) in Ireland seized $56 million worth of Bitcoin from drug dealer Clifton Collins in 2020. The value of these Bitcoin has now risen to $378 million, but due to the loss of the private keys, Irish authorities have been unable to access these Bitcoin for the past four years.
(Background: Financial lawyer: The transfer of 10,000 Bitcoins by the US government “definitely means selling”, not custody. The worst nightmare is here?)
(Background: Trump calls on the US government again: Selling Bitcoin is self-destruction, should focus on BUILD)
Table of Contents:
The Criminal Assets Bureau in Ireland cannot access the seized Bitcoin
The drug dealer claims the private keys have been lost
The US government holds over 200,000 Bitcoins
“Not your keys, not your coins!” A recent report in the Irish Times perfectly explains this popular saying in the cryptocurrency field.
The Criminal Assets Bureau in Ireland cannot access the seized Bitcoin
According to Decrypt’s report yesterday, the Criminal Assets Bureau (CAB) in Ireland seized $56 million worth of Bitcoin from drug dealer Clifton Collins in 2020. The value of these Bitcoin has now risen to $378 million. However, what troubles Irish authorities is that the drug dealer stored these Bitcoin in 12 different cryptocurrency wallets, and due to Irish authorities not having control over the private keys of these wallets, they have been unable to access these Bitcoin for the past four years.
The drug dealer claims the private keys have been lost
According to the drug dealer’s confession, he started investing in Bitcoin with the profits from his drug business since 2011 when the price of Bitcoin was between $0.3 and $29. As for his private keys, the drug dealer claims that he had stored the documents containing the private keys in a fishing rod case. Unfortunately, this case was lost in a burglary or possibly due to the authorities clearing his property after his arrest, resulting in the loss of the private keys.
In conclusion, these private keys may now be irretrievable, and those Bitcoin worth billions of dollars can only remain dormant. Currently, the CAB has only recovered a small amount of funds from the drug dealer, including 89 Bitcoins, a fishing boat, and an electric bicycle.
Through this incident, the crypto community also reminds investors that wallet private keys are crucial and must be properly safeguarded!
Further reading:
Explained: What are cold wallets and private keys? Ko Wen-je’s USB flash drive, the key evidence of cryptocurrency money flow?
The US government holds over 200,000 Bitcoins
On the other hand, Bitcoin seized by governments is usually auctioned off, and the inability of the Criminal Assets Bureau in Ireland to obtain the private keys is equivalent to extinguishing potential selling pressure.
For example, starting from June 19th this year, Germany has been selling approximately 50,000 Bitcoins, causing BTC to experience selling pressure and a bearish sentiment among investors.
One of the government selling pressures that investors are most concerned about is the United States. From November 2020 to November 2022, the US government seized over 200,000 Bitcoins in three different law enforcement actions targeting online criminals and dark web markets. Currently, these Bitcoins are mainly stored in encrypted, password-protected offline cold wallets controlled by the US Department of Justice, the Internal Revenue Service, or other institutions.
The main sources of Bitcoin seizures by the US government are as follows:
– November 2020: Seized from the largest dark web black market Silk Road – 69,369 BTC
– January 2022: Seized from the Bitfinex hacker – 94,643 BTC
– March 2022: Seized from Silk Road hacker James Zhong – 51,326 BTC, the US government still holds 41,500 BTC of this amount.
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