Germany recently made headlines for offloading nearly $3 billion worth of bitcoin into the open market. The move, which was part of a process to sell seized bitcoin, was described by experts as “market intervention.” While German authorities cited legal reasons for the sale, industry experts remain skeptical about the justification.
In January, Germany seized around 50,000 bitcoin from the operator of Movie2k.to, a website found guilty of money laundering. With the help of a German securities trading bank and the Federal Criminal Police Office, the state sold about 49,858 bitcoin between June and July, securing $2.8 billion. The selling spree caused a selloff in the market and put pressure on the price of bitcoin.
When the authorities finally issued a statement, they called the process a “market-friendly sale” that did not directly influence the bitcoin price. However, experts like Romina Bungert and Philipp Hartmannsgruber raised concerns about the impact of such actions on the market. Bungert criticized the lack of competence in handling the sell-off, while Hartmannsgruber questioned the timing of the sale and its benefits to taxpayers.
Hartmannsgruber, who advises politicians and authorities on bitcoin, argued that holding the seized bitcoin for the long-term could have generated more profits for taxpayers. He also highlighted the potential impact of massive bitcoin sales on the market, especially in light of other upcoming sales like the Mt. Gox lawsuit.
Moreover, experts pointed out the legal ambiguity surrounding the sale of seized assets. While authorities cited a legal provision that allows for the sale of assets to prevent significant loss of value, some observers questioned whether the sale was necessary. Timo Bernau, a lawyer, mentioned a general ban on speculation with public funds as a justification for the sale, but others like Hartmannsgruber emphasized the lack of a clear legal obligation to sell the seized bitcoin.
Overall, the sale of seized bitcoin by Germany has sparked a debate among industry experts about the legality and market impact of such actions. As the cryptocurrency market continues to evolve, the handling of seized assets like bitcoin raises important questions about government intervention and market stability.
