The Swedish government has found itself in the unanticipated predicament of handing over $1.5 million in Bitcoin (BTC) to a convicted and then imprisoned drug dealer.
The individual was found guilty in a Swedish court two years ago of illegally earning 36 Bitcoin through online narcotics transactions.
The Swedish prosecutor had argued in court that the man should be stripped of his illicitly earned Bitcoin at the equivalent value in fiat currency at the time of his conviction.
Tove Kullberg, his prosecutor at the time, had made her case using the cash equivalent of Bitcoin. As a result, the court decided that the man should lose his ill-gotten Bitcoin, which was worth 1.3 million Swedish kronor ($100,000) at the time.
Following the man’s conviction and imprisonment, his crypto holdings had grown to the point where the Swedish Enforcement Authority, which was tasked with auctioning off the 36 BTC, only needed to sell 3 BTC to meet the court’s demands.
That left 33 BTC, worth $1.5 million, to be returned to its rightful owner. Kullberg told Swedish radio that the approach she chose to plead her case was “unfortunate in many ways […] It has led to ramifications I was not able to anticipate at the time,” she said. She continued, “
“The lesson to be learned from this is to keep the value in Bitcoin, that the profit from the crime should be 36 Bitcoin, regardless of what value the Bitcoin has at the time.”
Kullberg also emphasized that, as bitcoin becomes more generally used, prosecutors would be wise to spend in educating their staff on the ins and outs of the industry. “The more information we have within the organization, the fewer mistakes we will make,” she explained.
Cryptocurrencies continue to confound legal authorities and procedures around the world, whether due to their volatility or technical design.
A government-sponsored task committee in the United Kingdom recently recommended a dispute resolution framework to assist standardize the methods for resolving smart contract issues.
A Russian court last year refused to return stolen cryptocurrency to a prominent crime victim due to the non-recognition of Bitcoin as legal tender or its substitute.
