If you remember, Bulgaria’s government announced in May 2017 that it’s police forces had seized more than 200,000 bitcoin in a crackdown against an international crime syndicate.
The news did not create much hype in the spring as bitcoin continued trading at a modest price of $1500. The government, perhaps unsure of what to do with such a massive stash of cryptocurrency, chose to play the wait-and-watch game.
But then came the bubble growth which saw bitcoin smashing through one high after the other in a matter of hours – almost on a day-to-day basis. And if you calculate the dollar-valuation of bitcoin today, the seized stash amounts to no less than $3 billion.
Yes, billion, billion with a ‘b’! We might as well declare the Bulgarian government the winner of the grand bitcoin lotto of 2017 along with Winklevoss twins.
So, what really happened?
According to reports, law enforcement agencies in the southeastern European nation busted an international ring of nefarious criminals who were allegedly colluding with customs officials across the region to forge documents that would help them avoid paying taxes. As many as 23 Bulgarian nationals were arrested as part of the crackdown.
The government further alleged that the perpetrators developed a computer virus designed to breach into the computer network of Bulgarian Customs officials. The virus, according to the investigating agencies, could potentially help the ring to import goods into the country without attracting government taxes.
The criminals bribed their contacts at the Customs department to upload the virus to the network.
Unfortunately for them, the rather elaborate scam fell flat its face and those involved in the scam are probably banging their heads against the wall.
Because the ring was using bitcoin to perpetrate the crime. The price of bitcoin when they were nabbed stood at around $2,350. Today? Each unit of the cryptocurrency would add another $14,000 to their pocket.
Major takeaway; crime doesn’t pay, but cryptocurrencies experiencing bubble-like growth do!
What remains to be seen at the moment is what the government in Bulgaria is planning to do with the seized bitcoin stash. Simply put, no one seems to have an answer. What’s even worse is that government seems to be reluctant in releasing further details. That’s understandable, though, given that the matter is still under an ongoing criminal investigation.
Nonetheless, if Bulgaria manages to unload the stash, it would help the country’s struggling economy to revive to a large extent. The country is targeting a budget deficit of 1 percent of GDP for 2018, after a better than expected performance in 2017. So obviously the $3 billion will help it bring things back into order not just in the next fiscal year, but over several years.
However, Bulgaria seems to be dealing with the same dilemma as the average bitcoin investor; is the current growth just a bubble or will the virtual currency continue growing at an unprecedented rate over a prolonged period?
The US government chose to pre-sell the seized bitcoin from the Silk Road case. Since Ross Ulbricht, the suspected mastermind behind the Dark Net Market challenged the legality of the claim on the seized bitcoin, meaning the funds raised could not be claimed. However, in September 2017, the challenge was dropped. Billionaire investor Tim Draper picked up the 30,000 bitcoin from the DOJ’s auction; if they had waited, they could have netted at least an extra $500 million due to the rising price of the cryptocurrency.