Key Takeaways

• German authorities may have missed seizing around 45,000 Bitcoin, worth approximately $5 billion, tied to the Movie2K piracy site, according to data from crypto intelligence firm Arkham.

• The newly discovered Bitcoin is split across more than 100 wallets and has not moved since 2019, but authorities will need to prove in court that the funds are of illicit origin.

• Germany has previously faced criticism for selling nearly 50,000 BTC at a price much lower than its later value, with prosecutors citing local laws that mandate the quick liquidation of volatile assets.

German authorities, who last year were criticized for selling seized Bitcoin at a much lower price, may have missed out on an even bigger prize.

According to blockchain intelligence platform Arkham, there could be another $5 billion in Bitcoin, or roughly 45,000 BTC, tied to the notorious movie piracy site Movie2K that was never seized.

The New Stash and the Legal Hurdles

Arkham, a crypto intelligence platform that tracks and identifies wallet addresses, found that the newly discovered Bitcoin is connected to earlier Movie2K addresses. The funds are scattered across more than 100 wallets and have been dormant since 2019.

While the discovery is significant, it doesn’t guarantee a future seizure, as German authorities will first have to prove in court that the Bitcoin is of illicit origin.

Even with a favorable ruling, police would face the technical challenge of gaining control of the assets, as they are not under their physical control and would need to be voluntarily transferred or seized through other complex legal means.

A History of Missed Opportunities

The potential missed seizure adds to the German government’s less-than-stellar track record with crypto assets. Last year, prosecutors seized nearly 50,000 BTC from the same investigation and sold it at an average price of $57,900 per BTC.

Just months later, Bitcoin’s price nearly doubled, meaning the government missed out on billions of dollars in additional revenue. At the time, prosecutors defended their decision by citing local laws that require them to quickly sell volatile assets to avoid a risk of loss.

Final Thoughts

Arkham’s discovery of a new stash of Bitcoin tied to the Movie2K case is a wake-up call for law enforcement agencies worldwide. For governments, it also reinforces the difficult legal and logistical challenges of seizing and managing volatile digital assets.

Frequently Asked Questions

How did Arkham discover the Bitcoin?
Arkham is a crypto intelligence platform that tracks on-chain data to identify and connect wallet addresses, which allowed it to link the new stash of Bitcoin to earlier addresses belonging to Movie2K.

Why was the previously seized Bitcoin sold at a lower price?
German prosecutors said they sold the Bitcoin at a lower price to comply with local laws that require them to quickly liquidate volatile assets to avoid the risk of loss.

What challenges do authorities face in seizing crypto?
Authorities face the challenges of proving a direct link between the crypto and illicit activity in court and gaining physical control of the assets, which are often held in private wallets.