The German government recently made headlines by selling off all of its Bitcoin holdings within a span of just two weeks. The sale, which was carried out by the Saxony Central Office for the Protection and Realization of Virtual Currencies, was done in collaboration with Frankfurt Bankhaus Scheich Wertpapierspezialist AG, a German securities trading bank. The official statement released on July 16 revealed that approximately 49,858 BTC were successfully sold off, starting from June 19 and concluding on July 12, 2024. The total sale proceeds amounted to €2.63 billion, with the funds being provisionally secured for criminal proceedings related to the “movie2k” complex.
The backstory behind the German government’s Bitcoin holdings traces back to a digital asset seizure from movie2k, a movie piracy website that is now defunct. In January 2024, the government seized 50,000 BTC, valued at over €2.1 billion at the time, from the operator of the movie2k website. Unlike some other jurisdictions that may hold onto seized digital assets, German law mandates their immediate liquidation. This mandate falls under an “emergency sale” provision in Article 111p of the Code Of Criminal Procedure, which requires the prompt sale of valuable assets to prevent any significant loss.
Legal Obligations and Market Conditions
Germany’s decision to sell off its Bitcoin holdings was also influenced by its legal obligation to liquidate assets before the conclusion of ongoing criminal proceedings. The volatile nature of Bitcoin, coupled with its rapid price fluctuations, posed a constant threat of loss, prompting the government to proceed with the sale. In an emergency sale situation, any speculation on prices or waiting for the assets to appreciate in value is strictly prohibited, as the primary goal is to liquidate the assets as quickly as possible.
According to the Saxony Central Office for the Protection and Realization of Virtual Currencies, the government executed a “market-friendly and appropriate sale of Bitcoins.” To mitigate the impact of substantial sell-offs on the market, the government initiated multiple BTC dumps in small tranches over a period of approximately three and a half weeks. The sale involved transferring approximately 49,858 BTC on January 16, 2024, with a total value of €1.96 billion at the time and an average purchase rate of about €39,400.
The German government’s strategic approach to selling off its Bitcoin holdings highlights the complexities involved in managing seized digital assets within the legal framework. By adhering to the provisions of the Code Of Criminal Procedure and prioritizing swift liquidation over potential price speculation, Germany was able to successfully divest its substantial Bitcoin reserves in a market-conscious manner.
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