Today we’re back to news covering the criminal enterprise side of the cryptocurrency world.
A German citizen who has done time for his coinjacking scheme will not let law enforcement confiscate his $60 million worth of Bitcoin.
He simply won’t give up the password.
Due to the way that Bitcoin works as a decentralized digital asset, law enforcement can’t simply seize his funds. The Bitcoin, which is stored in a digital wallet, is protected by a password that has to be manually recorded and stored.
“If the bitcoin wallet is not encrypted, law enforcement has complete access (provided proper warrants have been obtained for the seizure of the device),” writes Australian firm Nyman Gibson Miralis in a description of how this unusual type of civil forfeiture is usually done. “If the bitcoin wallet is encrypted, getting the suspect to volunteer the encryption code is the easiest method of access. If the suspect does not offer the encryption code, an admission that the suspect knows the encryption code is helpful in obtaining an order compelling the suspect to unlock the wallet.”
In this particular case, it’s unclear whether the password was ever stored at all.
“We asked him but he didn’t say,” Bavarian prosecutor Sebastian Murer told Reuters frankly. “Perhaps he doesn’t know.”
Another interesting wrinkle in this case is that during the interim, while this cryptocurrency gleaning power thief was in jail, Bitcoin’s value skyrocketed, so that his initial investment of a few hundred thousand dollars has become fortune-making money.
Originally, this fellow aggregated the Bitcoin holdings by surreptitiously stealing power from other people’s devices to mine the cryptocurrency.
The practice, which is called coinjacking, gained notoriety over the past few years, but has now taken a backseat to methods like ransomware attacks, though that does not mean it isn’t done.
Bitcoin’s potential for fraud and criminality has always been a refrain of its detractors. Now, though, the value continues to climb. We’ll see what happens throughout this year.
