20 February 2021

Reuters: “Police seize $60 million of bitcoin! Now, where’s the password?”

German prosecutors have confiscated more than 50 million euros ($60 million) worth of bitcoin from a fraudster. There’s only one problem: they can’t unlock the money because he won’t give them the password.

The man was sentenced to jail and has since served his term, maintaining his silence throughout while police made repeated failed efforts to crack the code to access more than 1,700 bitcoin, said a prosecutor in the Bavarian town of Kempten.

John O’Donnell

A hacker illegally mines Bitcoin by installing malware on more than 300.000 computers, gets caught and convicted, but the resulting coins are inaccessible because the authorities confiscated the wallet and the fraudster won’t disclose his password (if he even remembers it)… Apparently it’s a perfect standoff: if he tries to replicate the wallet, the authorities can watch it for withdrawals, so the thief can’t realistically recover his stashed treasure. Previously, German prosecutors have sold a small portion of this stolen wealth for around 500.000 Euro, money that went to the local budget, but the rest remains impossible to liquidate.

I wonder what might happen if billionaires (such as Elon Musk) start to transfer their assets to Bitcoin to avoid government taxation – do governments have any tools to collect taxes if someone operates in Bitcoin and refuses to pay them?

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