German State Cleans and Sells $113 Million Worth of Seized Crypto

Prosecutors in the German state of Hesse have sold €100-million ($113-million) worth of cryptocurrencies that were confiscated by the authorities from three drug traffickers earlier this year.

Announced on Wednesday by the prosecutor’s office in Frankfurt, Germany’s anti-cybercrime unit has tapped the services of Bankhaus Scheich Wertpapierspezialist AG, a local bank specializing in digital assets to ‘clean’ the cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term used in criminal activities and put them back into circulation.

Cleaning the Cryptos

Cryptocurrencies like Bitcoin leave a digital footprint on the blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned). In this sense, blockchain is immune to the manipulation of data, making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tamp Read this Term and can be easily identified if they were used for any known criminal activities in the past. This makes them tainted for future use, but they can be usually cleaned by the so-called crypto mixtures that cleared the past transaction data on the blockchain.

“As the cryptocurrencies are related to crime, they are considered ‘contaminated coins’ and cannot be traded on mainstream exchanges,” the German lender said in a statement. “[Our process] ensures that trading partners are informed that the currencies are back in legal possession and have been declared ‘clean’, allowing them to be sold.”

Additionally, the Frankfurt authorities and the lender signed a long-term contract to collaborate on any such crypto-related activities in the future.

The cryptocurrencies cleaned include Bitcoin, along with nine other different cryptocurrencies, that were sold within a week earlier this month. The perpetrators from whom they were seized were sentenced to prison in July.

Meanwhile, authorities of other nations often confiscate cryptocurrencies in bulk from busts against criminal activities. Earlier in October, another German state auctioned 215 bitcoins seized from criminals tied with internet-based crimes, fetching €12 million.