Sweden owes $ 1.5 million to drug traffickers convicted of bitcoin error

[ad_1]

Sweden must pay convicted drug traffickers 13 million kronor ($ 1.49 million) due to a prosecutor’s error, as well as the dramatic increase in the value of the bitcoin seized over the two years that it took the authorities to sell the digital currency.

The seizure of assets acquired through criminal activity is a fairly common concept around the world. With the existence of digital currencies like bitcoin, law enforcement agencies and lawmakers must change these processes to keep pace, a lesson Sweden has painfully learned.

Three men were convicted of selling drugs online in April 2019, reports Sveriges Radio, which involved the seizure of 36 bitcoins generated by the sales. The men were sentenced to terms ranging from 4 years to more than 6 years for their part in the sales.

When they were sentenced in May 2019, the debt to the state was shown in crowns, not bitcoins. Attorney Tove Kullberg converted the value of bitcoin to crowns, which was valued at 1.3 million crowns ($ 149,000) at the time.

Almost two years later, the cryptocurrency enforcement agent auctioned bitcoin. The problem for the state is that the value of bitcoin has increased during this time from around 40,000 crowns ($ 4,600) to around half a million crowns (around $ 50,000).

While the state could have sold the bitcoin at the time of its seizure, with the proceeds corresponding to the stated value in crowns, the delay meant that there was a considerable excess of funds after the state took the value of the crown seized.

This is a problem that could have been avoided if the prosecutor had used bitcoin as the currency for the seized assets. Now Sweden must return the unsold funds to convicts, which is considered extremely embarrassing for the country.

Kullberg believes the prosecution was one of the first in Sweden to obtain the proceeds of a crime in cryptocurrency. She also admits that her knowledge of bitcoin was lacking at the time and that there was no guidance to prosecutors on how to deal with cryptocurrencies.

The incident highlights the need for governments and justice systems to keep up with developments in cryptocurrencies.

In the United States, the US Treasury has started taking action on the matter, such as tightening regulations to require that transfers valued at $ 10,000 or more be reported to the IRS. SEC chief Gary Gensler also said he wanted to protect cryptocurrency investors from fraud and that changes to the investment law would be needed.

In China, the government has banned financial institutions from carrying out activities involving cryptocurrencies, as part of a crackdown in May that prompted miners across the country to scale back their operations.

[ad_2]