German Authorities May Have Overlooked 45,000 Bitcoin Linked to Movie2K
German officials might have missed out on approximately 45,000 Bitcoin associated with the movie piracy platform Movie2K, which translates to nearly $5 billion worth of Bitcoin that could potentially be seized and liquidated in the future.
On Friday, crypto intelligence platform Arkham disclosed that it has identified more than 45,000 Bitcoin (BTC) that “still remains in wallets belonging to Movie2K,” with a value “almost matching the amount seized” last year by Germany.
In January 2024, German authorities confiscated close to 50,000 BTC, which they subsequently sold within that year, merely months before the cryptocurrency’s price saw a near doubling in value.
The authorities have faced criticism for losing out on billions of dollars by not holding onto the Bitcoin longer, but prosecutors defended their actions, indicating that local legislation requires them to promptly sell volatile assets like cryptocurrencies to mitigate the risk of financial loss.
Arkham indicated that the newly discovered Bitcoin stash, currently noted as 45,060 BTC, was “connected to earlier Movie2K movements and addresses.”
“It is highly likely that this remains under the control of the Movie2K operators. It has remained static since 2019 and is distributed across more than 100 Bitcoin wallets,” they noted.
Arkham highlighted that German officials had not referenced the Bitcoin they discovered, and it was not included in the sales conducted in mid-last year.
Currently, Bitcoin is trading just under $111,000, giving the holdings an estimated value of $4.99 billion, which would have nearly reached $5.6 billion at Bitcoin’s peak of $124,128 in mid-August.
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German prosecutors sold 49,858 Bitcoin at an average price of $57,900 during various sales throughout June and July 2024, thereby generating approximately $2.8 billion.
Only a few months later, in mid-November, Bitcoin exceeded $90,000 and increased by 75% from the average sale price, surpassing $100,000 in December, making the sold Bitcoin worth over $5 billion.
The seizure of Bitcoin occurred in January of that year after authorities were investigating two men suspected of operating Movie2K, who voluntarily transferred the funds to law enforcement. Authorities alleged that this duo had purchased Bitcoin using profits made from the website.
This operation was termed “the most comprehensive seizure of Bitcoin by law enforcement agencies” ever conducted in Germany.
Prosecutors began selling the Bitcoin in batches across multiple exchanges in June and confirmed that the sales were concluded by mid-July, stating that it was legally required for them to divest any assets if there was a risk of losing at least 10% of their value.
It is currently unclear how German authorities will respond to Arkham’s findings, but if they aim to seize the Bitcoin, they must establish its connection to Movie2K.
Local regulations stipulate that authorities must prove in court that the Bitcoin is of illicit origin, specifically linked to the now-defunct piracy site, before they can proceed with the seizure.
Even with that proof, law enforcement will not be able to gain control of the Bitcoin until they ascertain who manages the reported 100+ wallets and arrange for the transfer of ownership.
