German authorities seize $2 billion worth of Bitcoin
A German programmer accused of running an illegal movie streaming site more than a decade ago has transferred $2.17 billion worth of Bitcoin to authorities to pay back at least some of the money he made illegally, said police Tuesday. The transfer required the man to use his unique Bitcoin credentials to hand over the money.
“This is the most extensive seizure of Bitcoins by law enforcement in the Federal Republic of Germany to date,” said Kay Anders, a spokesperson for the Saxony state police. The money will remain in the authorities' Bitcoin account until a court can figure out what to do with it, Mr. Anders added.
The man, who is only a 40-year-old German citizen, and his business partner are under investigation over allegations that they ran what was once the country's most successful illegal video-sharing site.
In its heyday, from 2008 to 2013, the site, movie2k.to, had tens of thousands of movies available for download in a multitude of languages. Users from all over the world visited the site, making it one of the 25 most visited websites in Germany, according to the website. news reports at the time. After authorities shut it down in 2013, several sites with similar names opened to fill the void.
In the five years that movie2k.to was active, users were able to illegally download nearly 880,000 movies, authorities said.
Police said the programmer took the profits from the site and invested it in Bitcoin, which rose to a value of more than 40,000 euros per coin.
The man who made the large transfer a few weeks ago was arrested in 2019 and held for months. While the investigation continues, he has been released because police say he does not pose a flight risk.
Authorities said the programmer confessed to his role on the site and cooperated with them in the investigation, which was also aided by 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 controlled by a bank, making them more difficult to seize. But in recent years, law enforcement officials have become better at tracking the flow of digital currencies and connecting anonymous digital accounts to people in the real world.
In this case, the man's willingness to cooperate was important in the seizure, as in many attempts to recover cryptocurrency. Unlike regular cash accounts, which are controlled by banks and can be seized with a search warrant, Bitcoin accounts require a user's unique login credentials.
This month's handover to authorities was not the first time the German man gave up at least part of his winnings. In 2020, 10 months after he was first arrested, the man transferred €25 million worth of Bitcoin to authorities.
David Yaffe-Bellany contributed reporting from San Francisco.