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German state sells $113mln worth of seized crypto currencies

written by Bella Palmer
crypto-currencies

The seized assets were sold off this month through a partnership with local bank Scheich, with the proceeds flowing into the accounts of the regional government of Hesse

A German state cashed in on 100 million euros ($113 million) worth of cryptocurrency confiscated from drug traffickers earlier this year, the prosecutor’s office in Frankfurt said Wednesday.

The seized assets were sold off this month through a partnership with local bank Scheich, with the proceeds flowing into the accounts of the regional government of Hesse.

Working together with the bank, prosecutors said in a statement they had found ‘a legally secure way to put crypto assets back on the regular market’.

The cryptocurrency was secured in a ‘wide-ranging investigation’ by prosecutors’ internet crime unit, targeting three people involved in narcotics trading.

Possession of the confiscated resources passed to the regional government after the culprits handed over their ill-gotten gains and were given ‘multi-year prison sentences’ in July.

As well as bitcoin, a further nine different cryptocurrencies were sold off during the operation, prosecutor Jana Ringwald told the daily Frankfurter Allgemeine Zeitung.

The tainted crypto-assets had to be redeclared as ‘clean’ before Frankfurt-based bank Scheich was able to reintroduce them to the open market, according to local media.

As the cryptocurrencies are related to crime, they are considered ‘contaminated coins’ and cannot be traded on mainstream exchanges, the German lender said in a statement. Our process ensures that trading partners are informed that the currencies are back in legal possession and have been declared ‘clean’, allowing them to be sold.

The state of Hesse has agreed a long-term contract with the bank, which positions itself as a cryptocurrency specialist, to sell off other seized crypto assets in the future.

In October, prosecutors in the neighbouring state of North Rhine-Westphalia directly auctioned 215 bitcoins confiscated from criminals involved in internet crime, collecting almost 12 million euros ($13.60 million).

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