Today, a German government agency made transactions that seem to indicate it may be on the verge of liquidating its Bitcoin holdings. According to data from blockchain intelligence firm Arkham, a crypto wallet labeled “German Government (BKA)” moved nearly 6,500 BTC on June 19 from an address that held funds seized from a film piracy platform.
German Police Confiscated BTC From Pirated Movie Site
A wallet previously tagged as belonging to the German Federal Criminal Police Office (BKA) by Arkham Intelligence made four transfers on Wednesday (June 19). One tranche of 6,500 BTC worth more than $425 million was moved to a wallet address “bc1q0unygz3ddt8x0v33s6ztxkrnw0s0tl7zk4yxwd,” while another of 2,500 BTC worth $154 million was returned to the original address.
On-chain data shows that $32 million worth of BTC was deposited on Kraken’s digital asset exchange and a similar amount on Bitstamp. The German government wallet now holds 43,359 BTC worth $2.83 billion.
The crypto wallet has held about 50,000 Bitcoins since mid-January 2024, prior to making the transactions on Wednesday. The funds were seized from operators of the piracy movie website Movie2k. Per Arkham, the German Federal Criminal Police Office acquired the BTC stash after a “voluntary transfer” by the culprits.
Although the German officials have not liquidated all the transferred funds, many spectators have expressed concerns about the possible impact of dumping such a huge BTC stockpile on the market. One crypto trader-cum-investor suggested that the recent increase in short positions and the Bitcoin market slide was due to the German government mass dumping BTC.
A sell-off of the German government’s remaining holdings could exacerbate the crypto market’s bearish momentum in recent weeks. As of press time, Bitcoin is below $65,000.
Governments Worldwide Liquidate Seized BTC
Governments worldwide frequently seize Bitcoin and other cryptocurrencies from bad actors and sell the confiscated crypto holdings in public auctions.
The United States government, for instance, is now sitting on a $7 billion BTC fortune, according to on-chain wallet data compiled by asset management company 21.co on Dune.
In the past decade, the U.S. has confiscated tens of thousands of Bitcoin from various criminals, most notably the infamous dark web marketplace Silk Road and the hackers who pilfered billions of dollars worth of crypto assets from digital asset exchange Bitfinex back in 2016.
Notably, previous transfers — or even suspected transfers — of government-controlled crypto have often sent the price of the premier cryptocurrency into a nosedive.
