According to Arkham, German authorities may have failed to seize up to $5 billion in Bitcoin tied to a piracy website that was investigated last year.
An estimated 45,000 Bitcoin tied to the movie piracy website Movie2K may have gone unnoticed by German authorities, meaning another $5 billion in Bitcoin could eventually be seized and liquidated.
It was stated on Friday by crypto intelligence platform Arkham that it had found more than 45,000 Bitcoin (BTC) that “still remains in wallets associated with Movie2K,” with a value of “almost as much as the amount seized” by Germany last year.
German police confiscated nearly 50,000 BTC in January 2024, and the stash was sold later that year, just months before the cryptocurrency’s value nearly doubled.
For forgoing billions of dollars in additional revenue by selling the Bitcoin when it did, the country has been criticized, but prosecutors clarified that local laws require them to promptly sell volatile assets like cryptocurrencies to prevent the risk of loss.
The Missed Fortune: Over 100 Wallets Found With Billions in Bitcoin
According to Arkham, the new cache of Bitcoin, which its platform indicates is 45,060 BTC, was “linked to prior Movie2K transfers and addresses.”
The assets are most likely still being controlled by the Movie2K operators. They have not been moved since 2019 and are divided among over 100 Bitcoin wallets, the source added.
Arkham reported that the Bitcoin it found was not mentioned by German authorities and was not included in the sales that occurred in the middle of last year.
Bitcoin’s trading price is currently just below $111,000, placing the holdings at a present value of $4.99 billion. This amount would have been valued at nearly $5.6 billion at Bitcoin’s mid-August peak of $124,128.
A Costly Decision: Germany’s Ill-Timed Bitcoin Sales Forgo Billions
A sale of 49,858 Bitcoin at an average price of $57,900 was conducted by German prosecutors in June and July 2024, bringing in a total of approximately $2.8 billion.
Only months later, in mid-November, Bitcoin’s price exceeded $90,000 and climbed 75% from the average sale price to more than $100,000 in December. At that point, the sold Bitcoin would have been valued at over $5 billion.
The Bitcoin was seized by police in January of that year after two men, who were under investigation for operating Movie2K, voluntarily surrendered the funds to authorities. The authorities allege the duo purchased the Bitcoin with money they had earned from the website.
The confiscation was described by authorities as “the most comprehensive seizure of Bitcoin by law enforcement agencies” ever executed in Germany.
The Bitcoin was sold in batches by prosecutors across multiple exchanges starting in June. They confirmed the sales were complete by mid-July, explaining that they were legally required to sell the assets if a risk of losing at least 10% of their value existed.
The Legal Challenge: Police Must Prove New Bitcoin is Illicit
How German authorities will respond to Arkham’s findings is not yet known, but if the police want to seize the Bitcoin, they will have to prove its connection to Movie2K.
It is mandated by local laws that authorities must prove in court that the Bitcoin is of illicit origin — in some way linked to the defunct piracy site — before they can legally confiscate it.
Even then, the Bitcoin will not be able to be controlled by police until the individuals who control the more than 100 wallets reported by Arkham are found and their ownership is transferred.
