Bitcoin Auctioned by Finland Government
In one of the extensive campaigns undertaken by any government against illicit cryptos, officials of Finland confiscated around 2000 Bitcoins during its dozens of raids since 2016. These raids were part of Finnish government’s operation against an online dark market called Valhalla. As per the officials in Helsinki, these bitcoins are worth $22 million today.
However, post the confiscation government was in a dilemma on how to manage these bitcoins. Finally, Finland’s government released new guidelines this week on how law enforcement agencies would handle the confiscated digital tokens. Finnish government confirmed that authorities handling the coins won’t be allowed to store them in any virtual currency exchanges. Rather will be asked to keep them offline and inaccessible from the internet. The new guidelines also state that authorities can’t treat Bitcoin or any other cryptos like a currency. According to the Treasury document, it’s an asset that, as a rule, can’t be used or accepted as a means of payment or as an investment.
Though this is not explicitly mentioned but as reported by Bloomberg, once the court has ruled that the funds will not be returned to the owner, they may be exchanged for Euros. The Treasury document recommends sales should take place through public auctions, rather than on cryptocurrency exchanges, for security reasons. Ruling also means that the agencies will have to look for cold storage solutions, in which they would maintain a wallet that does not have a web connection.
Other governments have faced the quandary of what to do with cryptocurrencies they confiscate - and as seen in the U.S., the solution is often simply to auction them off publicly.
While it's not clear how they must store cryptocurrencies, U.S. authorities have held a number of auctions for seized bitcoins in recent years.
This is not the first time cryptos would be auctioned. In 2014, 73,997 BTC were seized from defunct dark market Silk Road and was subsequently auctioned in October 2015. These 73,997 BTCs are worth $853 million today.