Crypto Auctions: Where Do Arrested Bitcoins End Up?

A recent study of University of Technology Sydney found that "Approximately one-quarter of Bitcoin users and one-half of Bitcoin transactions are associated with illegal activity".

"Proceeds from criminal activity are being converted into Bitcoins, split into smaller amounts and given to people who are seemingly not associated with the criminals but who are acting as 'money mules'. These money mules then convert the Bitcoins back into hard cash before returning it to the criminals".

After two years of investigation, the US Federal Bureau of Investigation arrested the founder and seized over 170,000 Bitcoins, which, at that time, accounted for about 1.5 percent of all the Bitcoins in circulation.

According to law enforcers, these shops were used by approximately 150,000 people, who each month used to buy drugs worth millions of euros using Bitcoins.

The United States Marshals Service, a federal law enforcement agency within the U.S. Department of Justice, auctioned different lots of Bitcoins catched by different state authorities.

One of the most recent sale has been held on Jan. 11, 2018 where the USMS auctioned a total of 3,813 Bitcoin in three different lots respectively of A) 2,500; B) 500; C) 813.Given the value of the Bitcoin at approximately 11,500 USD the closing day of the auction, the result granted an amount of around $44 mln in revenue to the state.

In Germany, the authority of the state of Hesse hope to gain millions from the sale of the 126 seized Bitcoins.

What about Bulgaria? According to calculations, the value of the 213,000 seized Bitcoins would be enough to pay off one-fifth of Bulgaria's national debt.

At present, the proportion would be a little different as the debt of the country is around $16 bln whereas the value of that pot of bitcoins would be around $2 bln.

The head of Bulgarian Special Prosecutor's Office, Ivan Geshev, recently said that the Prosecutor's Office and the Interior Ministry had not seized Bitcoins.