What does the police do if they seize bitcoin from criminals?

[BlackHatCoiner]

Many criminals choose to use bitcoin for a billion reasons. I don't blame them. In fiat money, if police finds out that a drug dealer sells drugs, they arrest him and then his millions go to government.

If he had (let's say) 1000BTC what would police do? There is no law that says "Police can then take his private keys and move his coins to a government's address". If the police cannot do something with the money then they will leave them to his address. Will these coins get lost? I don't think so. When criminal gets fired from the jail (if he went) he will still have his fortune, right?

In 2013, silk road's owner had saved in bitcoin 400,000$ (by that time's price!!!).

[20kevin20]

They usually seize it if they can, and after a while organize an auction. If the said BTC has been proven to be used in criminal activity, there's a high chance they'll seize it.

But then you have Bulgaria who owns a massive stash of more than 1% of the existing BTC and hasn't sold/auctioned it yet. These Bitcoins have been seized as well.

Guess each government has their own plan - although the fact that more than 1% of existing BTC is in the hands of Bulgarian government is kinda worrying to say the least.

[ChiBitCTy]

Many criminals choose to use bitcoin for a billion reasons. I don't blame them. In fiat money, if police finds out that a drug dealer sells drugs, they arrest him and then his millions go to government.

If he had (let's say) 1000BTC what would police do? There is no law that says "Police can then take his private keys and move his coins to a government's address". If the police cannot do something with the money then they will leave them to his address. Will these coins get lost? I don't think so. When criminal gets fired from the jail (if he went) he will still have his fortune, right?

In 2013, silk road's owner had saved in bitcoin 400,000$ (by that time's price!!!).

I'm pretty sure they can seize your assets just the same as when someone gets arrested and prosecuted and they can force you to hand over your assets.  Now I guess whether they find it or not comes down to how well you've hid your bitcoin and if there is anything tracing bitcoin back to you ( when they go look for your assets by court order).

[hd49728]

Many criminals choose to use bitcoin for a billion reasons. I don't blame them. In fiat money, if police finds out that a drug dealer sells drugs, they arrest him and then his millions go to government.

If he had (let's say) 1000BTC what would police do? There is no law that says "Police can then take his private keys and move his coins to a government's address". If the police cannot do something with the money then they will leave them to his address. Will these coins get lost? I don't think so. When criminal gets fired from the jail (if he went) he will still have his fortune, right?

In 2013, silk road's owner had saved in bitcoin 400,000$ (by that time's price!!!).

When police investigate a case, and put one under arrest. After that, police can investigate further and if they can get private key, they can seize bitcoin from that one. It is not always the case will be resolved like that. There are two endings and depends on different cases but as the truth is, police often collects many spy information before arresting someone because of suspicious or fraudulent activities.

It means police mostly can seize illegal bitcoin, not all 100% but significant amount.

[seoincorporation]

Well, here is the answer...

https://fortune.com/2017/10/02/bitcoin-sale-silk-road/

Let me quote the important part for you:

The U.S. Justice Department has claimed the proceeds from the sale of 144,336 bitcoins, valued at just over $48 million, that it obtained after shutting down the notorious online drug market Silk Road in 2013.

Those $48 millions are now capital of the government.

[BlackHatCoiner]

Lol, so the government took $48 million dollars and made them $1.1 billion?

[Yamifoud]

Lol, so the government took $48 million dollars and made them $1.1 billion?

That is a crazy thing dude. Does it mean that the authorities had to make money from this instead of locking it somewhere else? But anyway, it is better to look like that rather than it falls into the devil's hands.

It was really sure that the authorities will seize anything that is illegal but wondering how these people make an auction about their seized Bitcoin. Maybe it was their call and that is maybe their protocols by then rather get nothing benefited from it. And I believe that every country had its plan of what they actually do once caught up.

[sheenshane]

The government didn't believe in any cryptocurrency asset especially in Bitcoin and that's why they auctioned it, which happens sometimes in the US marshals service after they confirmed of seizing crypto-asset confiscated from criminals. They usually compared the price into the exchange rate or in Coinsmarket Cap.

Look at this article, US Government Auctioning off Bitcoins Worth $37 Million in 2 Weeks. This year they actioned $37 million on US marshal service which is the Bitcoin was seized come from the criminals. They exchange seized Bitcoin into regulated fiat currency and the government will hold the real money not the virtual/digital currency.

[Sanugarid]

If they are able to convert it into cash, most probably it will just go to the police department that went in to seize the bitcoins just like when they seize a money from a drug syndicates, if it is not that huge amount the central government would not take it. But I'm wondering if they could do that, if it happens to be in a hardware wallet then they could seize it but if it is in the online wallet the criminals could just lie to them so they have still money once they are in the prison unless someone freezes it.

I don't know how it will go, I haven't seen a case yet where police seized bitcoins from a criminal, would love to read one.

[Pffrt]

They do an auction and sell them. Selling through auction is the most logical option. In my local, if police seize any vehicles like motor bike or cars and if the owner don't claim their vehicle, later, authority sold them through auction.

[rhomelmabini]

Guess each government has their own plan - although the fact that more than 1% of existing BTC is in the hands of Bulgarian government is kinda worrying to say the least.

As per 2019 article they at least have 213,519 BTC and Bulgaria has more than bitcoins hodl than its own gold reserve and it can be compared to the Huobi's cold storage wallet (the richest bitcoin address).

Yeah, it's kinda worrying since a country having that huge amount of coins and not planning to auction or something about the stash they might be considering of planning on something that other countries may never know.

[serjent05]

Well, it depends on the investigation of the police department.  If those Bitcoin came from scam company and they had successfully traced the owner of the funds, there is a possibility that they will return it to the verified claimant, or if it is from an illegal transaction, they can just seize it and auction it later. 

[BlackHatCoiner]

Guess each government has their own plan - although the fact that more than 1% of existing BTC is in the hands of Bulgarian government is kinda worrying to say the least.

As per 2019 article they at least have 213,519 BTC and Bulgaria has more than bitcoins hodl than its own gold reserve and it can be compared to the Huobi's cold storage wallet (the richest bitcoin address).

Yeah, it's kinda worrying since a country having that huge amount of coins and not planning to auction or something about the stash they might be considering of planning on something that other countries may never know.

Many bitcoins in Bulgaria. Sounds a bit illegal country  

If they change president(s), I wonder what will happen.

[romero121]

They do an auction and sell them. Selling through auction is the most logical option. In my local, if police seize any vehicles like motor bike or cars and if the owner don't claim their vehicle, later, authority sold them through auction.

Going for an auction is the common practice on most of the countries to dispose the seized assets. When it comes to digital assets, conducting an auction is an complicated process.

In one of the post it is mentioned about the country Bulgaria having a large volume of seized bitcoin. Probably Bulgaria will serve to be one among the top list with a big volume of bitcoin reserve over the falling years due to the increasing legalized usage of cryptocurrencies.

[Kahan848]

If only people knew where these seized assets (that are not sold at auction) are spent on, I wouldn't bother much, especially if it goes into something socially benevolent

[Slow death]

this is an important point because in most countries they have not legalized bitcoin because the police take the learned bitcoin and do auction as if it were legal goods? Wouldn't it be easier for them to legalize bitcoin to make everything clearer for everyone? and I also wonder about the moral issue, for example, people who buy the bitcoins stolen in the auctions do not have remorse? because without a doubt they are aware that the bitcoin that will be auctioned by the police was used to commit many crimes, I am of the opinion that the bitcoins learned should be donated to needy people

[yhiaali3]

This does not necessarily happen, my dear, this bitcoin resource can be sold by the government by public auction as it happened in Ireland and in the United States of America, where it seized some bitcoin that it says is illegal and sold it by auction at a cheaper price and then seized the money.
Don't worry about the government, there are a lot of ways to get this bitcoin seized.

[cabron]

Confiscating BTC and then auctioning it seem easy to take for a drug dealer.

With how easy it is to learn bitcoin and operate bitcoin wallet, you got to believe these days that police officers know how cryptocurrency works. Some of them probably have already invested in BTC. It's even possible that a corrupt police officer will deliberately target someone who uses BTC for their drug transactions and then confiscate the BTC for himself.  Do you think this had even happen already?

[Amel]

Since you live in a country where Bitcoin is not legalized the police can seize it. Then there are many ways to convert their country’s money from Bitcoin. It will then be deposited in the government treasury through the court of the police. When the police seize an illegal car or any illegal assets, Bitcoin will be deposited in the government treasury through the same process through which it is deposited in the government treasury.

[Darker45]

There is no law that says "Police can then take his private keys and move his coins to a government's address". If the police cannot do something with the money then they will leave them to his address. Will these coins get lost? I don't think so. When criminal gets fired from the jail (if he went) he will still have his fortune, right?

There is no law that explicitly says so but the law is clear that anything related to a crime or to any illegal activity will be confiscated. As a matter of fact, in real life the confiscation far extends to items that are not actually part of the crime.

Normally, while the deliberation of the case is ongoing, the confiscated items will remain stored in a safe place. But when the court has already rendered its guilty verdict or specifically labelled those items to be illegally acquired, then those will become properties of the government. They have the prerogative on what to do with it.

The same is true with confiscated Bitcoins. I guess they have the freedom to either auction it immediately, keep it for a while until a decision is made on what to do with it, or simply convert it to fiat.

But we can only talk of the confiscated Bitcoins. If you have stored some which escaped the investigating eyes of the authorities, then lucky for you.