financemagnates.com
Prosecutors in the German state of Hesse have sold €100-million ($113-million) worth of cryptocurrencies that were confiscated by the authorities from three drug traffickers earlier this year.
Announced on Wednesday by the prosecutor’s office in Frankfurt, Germany’s anti-cybercrime unit has tapped the services of Bankhaus Scheich Wertpapierspezialist AG, a local bank specializing in digital assets to ‘clean’ the cryptocurrencies used in criminal activities and put them back into circulation.
Cleaning the Cryptos
Cryptocurrencies like Bitcoin leave a digital footprint on the blockchain and can be easily identified if they were used for any known criminal activities in the past. This makes them tainted for future use, but they can be usually cleaned by the so-called crypto mixtures that cleared the past transaction data on the blockchain.
“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 Frankfurt authorities and the lender also signed a long-term contract to further collaborate in any of such crypto-related activities in the future.
The cryptocurrencies cleaned recently include Bitcoin, along with nine other different cryptocurrencies, that were sold within a week earlier this month. The perpetrators from whom they were seized were sentenced to prison in July.
Meanwhile, authorities of other nations are also often confiscating cryptocurrencies in bulk from busts against criminal activities. Earlier in October, another German state auctioned 215 bitcoins seized from criminals tied with internet-based crimes, fetching €12 million.