A UK police force has become the country’s first to seize and convert bitcoin to pounds as part of a criminal probe, netting £1.25 million ($1.6 million) — though officers were not allowed to decide when they sold it, somewhat missing last year’s massive bull run.
The police force seized 295 bitcoin in April last year from a now-convicted Latvian money-launderer that at the time was worth around £900,000.
These bitcoin then remained in police hands until October when they were converted to sterling. The cryptocurrency climbed to almost $20,000 towards the end of last year before falling sharply back and is now trading around $7,400 per coin.
If the force had sold the near 300 bitcoin at the cryptocurrency’s peak they’d have been able to turn it into a whopping £4.27 million – and been allowed to keep 18.8% (or £802,000).
When the British cops did sell the bitcoin they got to keep £273,000.
The force was required to hold on to the digital coins until they got the go-ahead from the UK’s Crown Prosecution Service that the bitcoin were ruled realisable property.
Once this ruling was made however, the cops had to move right away, regardless of the bitcoin price. Police are not allowed to hold any asset sezied in the hope it will rise in value.
“Our responsibility was to ask the courts for permission to act, within the existing legal frameworks, and once given that permission, to take action,” a police spokesperson said. “We would speculate by holding onto any asset or property (whether bitcoin, jewellery, vehicle or otherwise) that was seized under Proceeds of Crime Act in the hope of it changing in value.”
The spokesperson added: “The police wouldn’t hodl.”
Hodl is a term used in the bitcoin community when referring to holding the cryptocurrency rather than selling it.
Alongside the bitcoin stash police found jewellery — including high-value watches and gold bars, which were valued in excess of £50,000, — and a BMW 5 series, as well as a Range Rover Evoque at gang-member Sergejs Teresko’s home.
How the bitcoin was sold without it going straight back into the hands of criminals…
The police force converted the bitcoin through an off-shore exchange after carrying out due diligence on it.
However, the force declined to name the exchange for operational reasons and said it could use the same one again for future bitcoin seizures — which it is expecting to make.
There is though no guarentee the sold bitcoin will not again be used for criminal purposes.