The German government recently made headlines by selling off all of its Bitcoin holdings in just two weeks. The sale, which was conducted by the Saxon Central Office for the Protection and Realization of Virtual Currencies and Frankfurt Bankhaus Scheich Wertpapierspezialist AG, involved the disposal of approximately 49,858 BTC. The government cited the need to secure funds for criminal proceedings related to the infamous “movie2k” complex as the primary reason for the substantial Bitcoin dump.
The backstory behind the German government’s Bitcoin sale revolves around a digital asset seizure from the now-defunct movie piracy website, movie2k. Following the seizure of 50,000 BTC from the operator of the website in January 2024, German law mandated the liquidation of the seized digital assets under Article 111p of the Code Of Criminal Procedure. As a result, the Dresden Public Prosecutor Office had no choice but to sell off the Bitcoin stash transferred by the accused, despite the potential for significant loss due to Bitcoin’s volatile nature.
To minimize the impact of the Bitcoin sale on the market, the German government opted for a market-friendly approach. Instead of dumping all the BTC at once, the government initiated multiple small tranches of sales over a period of three and a half weeks. This strategic approach was taken to prevent drastic price fluctuations and ensure a smooth and appropriate sale of the assets.
Prohibition of Speculation and Price Waiting
In an emergency sale mandated by German law, any speculation on prices or waiting for the rising value of the seized assets is strictly prohibited. The focus is on executing the sale as quickly as possible, without considering the current value of Bitcoin or other price-influencing factors. This approach aims to ensure the efficient liquidation of valuable assets before the conclusion of ongoing criminal proceedings.
The German government’s decision to sell off its Bitcoin holdings highlights the legal obligations and considerations involved in managing seized digital assets. The need to secure funds for criminal proceedings, coupled with the volatile nature of Bitcoin, necessitated a timely and strategic sale approach. By prioritizing a market-friendly strategy and adhering to legal mandates, the government successfully liquidated its Bitcoin reserves while fulfilling its obligations under German law.
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