German State Moves $3 Billion in Bitcoin Seized From Pirate Site Operators

The German state of Saxony has moved the Bitcoin it seized from the alleged operator of long-defunct pirate site Movie2k. The haul of almost 50,000 bitcoins is worth over $3 billion at today’s exchange rate. The cryptocurrency was sent to exchanges and market makers, including Coinbase, Kraken, and Flow Traders, presumably to be sold.

At the start of the 2010s, Movie2k was one of the most visited sites on the web.

The site was an early adopter of pirate streaming and at its peak, secured a spot among the twenty most-visited websites in Germany, beating Twitter and Amazon.

Movie2k’s success generated a healthy revenue stream which its operators converted to a new and exciting ‘currency’ called Bitcoin. It’s assumed that the goal was to keep the haul hidden from prying eyes. That initially appeared to work well, but it didn’t last.

The Movie2k reign came to an end in 2013, when the site mysteriously went offline. The site’s closure fueled suspicion of legal issues, which was eventually confirmed years later when German police announced several arrests.

Arrests and Bitcoin Seizures

The arrests resulted in numerous convictions over the years and in 2020 the authorities also seized 2,700 bitcoins. However, this number pales in comparison to the amount that was confiscated earlier this year as part of an ongoing prosecution.

Following an investigation carried out by the Dresden General Prosecutor’s Office, the Saxony State Criminal Police, together with the local tax authority (INES), in January nearly 50,000 bitcoins were seized. At today’s exchange rate the haul is worth more than $3 billion.

Never before has this much Bitcoin been secured by German authorities; it was also one of the largest crypto hauls worldwide. According to the police report, the defendant agreed to voluntarily hand over the cryptocurrency.

Saxony Moves all Seized Bitcoin

Legally, and from a risk perspective, the German state of Saxony can’t hold the Bitcoin indefinitely. The coins had to start moving by the end of June, and that’s when the first outward transfers were recorded.

The Bitcoin transfers have been closely tracked by Arkham which provided updates of all notable transactions. While it’s clear that the funds were moving, it doesn’t automatically mean they were instantly sold.

Over the past couple of weeks, the state of Saxony moved all of its Bitcoin to external parties. The latest transfers were completed a few days ago, bringing the wallet balance to zero.

The authorities haven’t commented on the transfers and alleged selling. The coins went to various third-parties including exchanges such as Coinbase, Kraken, and Bitstamp, as well as Flow Traders and Cumberland, which operate as market makers.

Bitcoin Storytelling and Donations

As is often the case on financial markets, these types of events are often used to explain price movements. So, when the Bitcoin price started to drop, several reports hinted that the German ‘selloff’ could be responsible.

It’s impossible to confirm a link between the two events without further information. However, the Bitcoin price rebounded over the past week while Saxony was moving out more and more Bitcoin; that’s the opposite effect for a similar ‘selloff’.

At this point, it’s clear that the German state is liquidating the Bitcoin assets seized from the former operator of Movie2k. Interestingly, however, the wallet’s assets are not completely zero, as some people decided to donate a few extra Satoshi to the account, which currently holds $421.

Meanwhile, the Bitcoin haul’s previous owner is likely to have witnessed recent events in disbelief; the value of the ‘coins’ when first stashed away was just a few dollars each.

In April this year, the defendant heard the charges he’s facing, which include unauthorized commercial exploitation of copyrighted works and commercial money laundering. He will be sentenced at a later date.