Bitcoin bonanza for jailed drug dealer

A convicted drug dealer will have more than $1.5 million (£1.08 million) worth of Bitcoin returned to him by the Swedish government after a legal misstep saw prosecutors value the proceeds of their crime in Swedish Krona and not in cryptocurrency.

When the man was jailed in April 2019, the prosecutor successfully argued that 36 Bitcoins should be taken from the dealer under Sweden’s equivalent of the Proceeds of Crime Act.

However, the prosecutor used the monetary equivalent to make their case at the time, not realising how quickly the value of Bitcoin would rise.

Two years ago, the coins were worth just under $150,000 but by the time the Swedish Enforcement Authority came to auction off the Bitcoin, their value had appreciated to the extent that only three needed to be sold for the original value to be recouped. This means that the Authority must return the remaining 33 Bitcoins to the drug dealer.

Describing the outcome as “unfortunate”, the prosecutor said that the lesson to be learned is to keep the value in Bitcoin, regardless of what the value of Bitcoin is at the time.

They also suggested taking steps to invest in “internal education” in the prosecution authority. This would ensure better undertaking of legal proceedings as cases related to cryptocurrency might increase in the future.

Helen Gregory, Forensic Director at Milsted Langdon, said: “This case was the first in Sweden’s legal history that involved the seizure of cryptocurrency so there was no legal precedent.

“However, the chances are that crimes involving cryptocurrency will increase, so valuation will play a vital role in recouping the monetary worth of ill-gotten gains.

“Valuing cryptocurrency in any proceedings can be challenging given the regular and significant fluctuations in price for each coin or digital asset. Equally, it can be difficult to uncover the extent to any cryptocurrency holding due to the encrypted nature of cryptoassets.”

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