In Brief

  • Authorities seized $56 million in Bitcoin from a drug dealer.
  • It's likely they'll sell the forfeited Bitcoin.
  • In the past, authorities have sold Bitcoin for far less than it's worth.

Irish authorities have forced a drug dealer to forfeit over $56 million in Bitcoin (roughly 5,500 Bitcoin), following a ruling from the High Court that it was the result of criminal activity. As reported by the Irish Independent, he was believed to have been an early investor in Bitcoin.

Clifton Collins, 49, of Dublin, had to give his Bitcoin to the Criminal Assets Bureau (CAB) under the Proceeds of Crime legislation. The case stretched back to February 2017, when the police found cannabis in his car. The police also searched his home to find more plants.

A physical representation of Bitcoin, which is digital. Image: Shutterstock.

The CAB had placed a freezing order on the Bitcoin to stop the money from being transferred elsewhere.

It’s unclear what will happen to the forfeited Bitcoin, but, if it’s anything like other forfeitures, it could be sold by the authorities.

Governments rake in Bitcoin hauls

Yesterday, the US government auctioned off over 4,000 Bitcoin, worth approximately $37 million

Some of the seized Bitcoin the US government sold came from cases against drug dealers. Over $200,000 came from two drug dealers from Alabama, Tyler Lee Ward and Henry Long Nguyen, who were imprisoned in May 2019 for conspiring to sell Alprazolam, and running a “drug-involved premise,” according to a press statement by the Department of Justice. 

In September 2019, British police sold over $311,000 in cryptocurrency seized from Elliott Gunton, who hacked the telecommunications service provider TalkTalk.

What’ll be interesting to see is whether the authorities sell the stolen cryptocurrencies at the right time. Jameson Lopp, CEO of key-security company Casa, and a self-described cypherpunk and CEO, last week released a  “US Marshals Bitcoin Auction realtime schadenfreude tracker,” which tracks all of the seized Bitcoin sold by US Marshals.

He found that the US government has lost over $1.7 billion in potential gains by selling at the right time. That is, of course, compared to current prices. The US government sold the 50,000 Bitcoin seized from the original Silk Road in June 2014, when a single Bitcoin was worth around $380. But if the US government sold the Bitcoin when Bitcoin’s price was at its peak in late 2018, they’d have made $1 billion alone.