The German government shocked the crypto world by selling all of its Bitcoin holdings in just two weeks. The sale, totaling approximately 49,858 BTC, was completed by the Saxony Central Office for the Protection and Realization of Virtual Currencies and Frankfurt Bankhaus Scheich Wertpapierspezialist AG. The proceeds from the sale amounted to €2.63 billion and were provisionally secured for criminal proceedings related to the “movie2k” complex.
The backstory behind the German government’s Bitcoin holdings dates back to the seizure of 50,000 BTC from the operator of the movie2k website in January 2024. While some jurisdictions may choose to hold onto seized digital assets, German law mandates their liquidation. Article 111p of the Code of Criminal Procedure requires an “emergency sale” of valuable assets before the conclusion of ongoing criminal proceedings to prevent any significant loss.
Given Bitcoin’s notorious volatility and rapid price fluctuations, the threat of loss was a significant concern for the German government. Speculation on prices or waiting for the value of seized assets to rise is strictly prohibited in emergency sales. The Dresden Public Prosecutor Office had no choice but to sell off the Bitcoin stash quickly to avoid potential losses.
The Saxony Central Office for the Protection and Realization of Virtual Currencies emphasized that the government conducted a “market-friendly and appropriate sale of Bitcoins.” To avoid impacting the market significantly, the government initiated multiple small BTC dumps over a period of three and a half weeks. The average purchase rate was approximately €39,400.
The German government’s swift sale of its Bitcoin holdings demonstrates a commitment to abiding by legal obligations and preventing potential losses from the volatile nature of cryptocurrencies. While the decision may have surprised many in the crypto community, it serves as a reminder of the regulatory frameworks that govern digital asset seizures and sales in various jurisdictions.
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