Prosecution sells confiscated bitcoins for 1st time, making huge profit

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By Yi Whan-woo

The prosecution recently sold bitcoins seized from a man convicted of running a major pornography website. It made 45 times more profit than the currency was initially worth four years ago, when the man was arrested.

This is the first time that a stash of digital coins linked to criminal activities was sold by authorities after being forfeited and left in cold storage.

The Suwon District Prosecutors' Office said last week it had sold 191 bitcoins seized from a man identified only by his surname Ahn. The coins were collectively worth 270 million won in spring 2017 when they were seized, and were sold for 12.29 billion won ($10.9 million) on March 25.

The cash went into the state coffers.

The bitcoins had been in cold storage, or in an offline wallet for bitcoin storage, as there were no laws or regulations for dealing with cryptocurrency.

Their sale was made possible with the enactment of specific cryptocurrency laws on March 25, amid a growing need to prevent the virtual assets from being used for money laundering, the financing of terrorism and other crimes.

The bitcoin price had fluctuated over the past four years, but has exploded recently. For instance, it cost 64.2 million won per unit on March 25, up from 1.41 million won in the spring of 2017, when the prosecution first arrested Ahn and seized 191 bitcoins belonging to him.

“This was the first case of putting criminal profits in the form of cryptocurrency into state coffers,” a representative from the Suwon District Prosecutors' Office said. “We will thoroughly track down criminal profits hidden in cyberspace, confiscate them and block any chance of concealing them.”

Ahn was arrested after running the U.S.-based online pornography site, AVsnoop.club, starting in 2013.

It had millions of subscribers. Ahn had asked them to make payments in cryptocurrency and accordingly had raised a profit of over 1.9 billion won.

In 2018, the Suwon District Court sentenced him to 18 months in prison, and in line with the prosecution's request, ordered that his illicit gains, in the form of 191 bitcoins and 695 million won in cash, be confiscated.