German Authorities Seize $2 Billion in Bitcoin


A German programmer accused of running an illegal movie streaming site more than a decade ago transferred $2.17 billion in Bitcoin to authorities to repay at least some of the money he had earned illegally, police said Tuesday. The transfer required the man to use his unique Bitcoin credentials to deliver the funds.

“This is the most extensive seizure of Bitcoins by law enforcement in the Federal Republic of Germany to date,” said Kay Anders, spokesperson for the Saxony state police. The money will remain in the authorities' Bitcoin account until a court can decide what to do with it, Anders added.

The man, identified only as a 40-year-old German citizen, and his business partner are under investigation over allegations they ran what was once the country's most successful illegal video-sharing site.

At its peak, from 2008 to 2013, the site had tens of thousands of movies in a large number of languages ​​available for download. Users from all over the world visited the site, placing it among the top 25 most visited websites in Germany, according to news reports At the time. After authorities closed it in 2013, several sites with similar names opened to fill the void.

In the five years that was active, it allowed users to illegally download nearly 880,000 copies of movies, authorities said.

Police said the programmer took profits from the site and invested them in Bitcoin, the value of which skyrocketed to more than 40,000 euros per coin.

The man, who made the big transfer several weeks ago, was arrested in 2019 and jailed for months. He has been released while the investigation continues because he does not pose a flight risk, according to police.

Authorities said the programmer had confessed to his role in the site and was working with them on the investigation, which also had help from the U.S. Federal Bureau of Investigation. An indictment is expected soon.

Historically, criminals have converted their ill-gotten gains into Bitcoin to protect them from authorities. Cryptocurrency funds can be stored in a private digital account, or even on a physical hard drive, that is not monitored by a bank, making them more difficult to confiscate. But in recent years, law enforcement officials have gotten better at tracking the flow of digital currencies and connecting anonymous digital accounts with people in the real world.

In this case, the man's willingness to cooperate was important in the seizure, as it is in many attempts to recover cryptocurrency. Unlike regular money accounts, which are managed by banks and can be seized with a search warrant, Bitcoin accounts require unique login credentials from the user.

This month's transfer to the authorities was not the first time the German gave up at least part of his earnings. In 2020, 10 months after his first arrest, the man transferred 25 million euros in Bitcoin to the authorities.

David Yaffe Bellany contributed reporting from San Francisco.

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