In May, a series of raids by Bulgarian law enforcement were reported to have resulted in the seizure of over 213,000 BTC, at the time valued at more than $500 million and now worth $3.2 billion USD. Yesterday, however, the head of Bulgaria’s Special Prosecutor’s Office, Ivan Geshev, stated that the Prosecutor’s Office and the Interior Ministry did not seize the bitcoins.
Today, the Seized Bitcoins Are Estimated to Be Worth 6% of the Bulgarian GDP
On May 19 of this year, European authorities announced the successful execution of a joint operation in conjunction with the Southeast European Law Enforcement Center (SELEC) that had successfully resulted in the seizure of 213,519 bitcoins. The bitcoins were taken from a criminal group comprised of “Bulgarian nationals [with] connections in the former Yugoslav Republic of Macedonia, Hellenic Republic, Romania, and Republic of Serbia,” accused of “recruiting corrupted Customs officers in all involved countries with the purpose to infiltrate a virus in the Customs’ computerized systems.” The virus would then allow the hackers to finalize the transportation of their goods after having made it appear as if “the cargo was already checked and passed” to Customs’ computer systems – circumventing all requisite fees in the process.
With bitcoin having been valued at approximately $2,354 USD at the time of the arrest, the seized bitcoins have since skyrocketed in value – with current estimates valuing Bulgaria’s loot at more than $3.2 billion USD according to current prices. It has recently been reported that the Bulgarian government has refused to provide details pertaining to the seized bitcoins, describing such as a request for “specific information from an investigation into criminal proceedings.” The estimated value excludes the additional $300 million USD worth of Bitcoin Cash that could be retrieved from the stash also.
Skepticism Surrounds the ‘Seized’ Bitcoins
Bulgarian media have reported that the head of Special Prosecutor’s Office, Ivan Geshev, “said on December 8 that the Prosecutor’s Office and the Interior Ministry had not seized Bitcoins.” Mr. Geshev reportedly attributed the claim that Bulgarian authorities had seized the bitcoins to SELEC.
Bulgaria has received significant attention from cryptocurrency media in recent days owing to inaccurate reports circulated claiming that the local government had initiated a crackdown targeting cryptocurrency exchanges throughout the country. Sources have informed news.Bitcoin.com that this is unlikely to be the case, stating that the decision to suspend the banking accounts of cryptocurrency exchanges was made by Bulgarian banks alone. A statement issued by FiBank asserts that “A large number of correspondent banks such as JP Morgan Chase, Commerzbank and a number of others with whom Fibank is working refuse to accept transactions for the sale of cryptocurrencies. In this respect, Fibank can not continue to provide services to crypto-traders.”
Select Bulgarian Banks Cease Services to Cryptocurrency Exchanges
One source has stated that “UBB (United Bulgarian Bank) two days ago and First Investment Bank (Fibank) one day ago decided to close the account of cryptocurrency exchange platforms. One internal source of Fibank said they were not able to find a mechanism to satisfy the overwhelming demand from exchange sites. That’s why their decision to stop working with exchange sites is because of operational causes and nothing about regulations/government intervention or sorts… the decisions were made by the banks itself, not enforced by the government.”
The source claims to have reached out to “other Bitcoin-trading companies that work with other banks, Piraeus Bank, Societe Generale and they are operating now, for example, Cix.bg. However, the platforms that only worked with either UBB or Fibank such as Bitcoinborsa, Crypto.bg, or Cryptobank ceased their operations and are looking for alternative banks now.” The source concludes that “in short nobody lost anything, nothing is seized and everybody’s bitcoins are safe.”
UPDATE: This article was amended to correct the USD value of the bitcoins at the time they were seized.
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