Asset forfeiture goes digital, as governments around the globe attempt to profit from the world’s most popular cryptocurrency’s soaring value. Sweden joins its ranks, auctioning off bitcoin at a sizeable margin.
Also read: Ross Ulbricht’s 144,336 Bitcoins
Sweden Lives in a Digital World
“Now you can buy bitcoin at the Crown Bailiff,” Sweden’s Crown Bailiff Authority excitedly headlined a recent site press release. Kronofogden is a government debt collection bureau, and with the full power of the state it is the only governmental of its kind in the country allowed to seize money, assets, and property from debtors.
Johannes Paulson, Operations Developer for the agency, explains how assets “are not just the car on the driveway or the money on the bank account. We live in a digital world, and now we are looking for assets in computers and hard drives as well as in telephones and web services” (emphasis added).
The online statement clarified how either the bureau is “being tipped by someone or we suspect that the debtor owns the bitcoin. When we have such suspicions, we proceed to try to track, measure and then sell the holding so that the debtor can pay off his debt.”
The first of its kind for Sweden, the auction ran “Thursday, October 12, and closes [at the time of writing]. It is about barely 0.6 bitcoin worth about 23,000 kronor [SEK],” Kronofogden’s post explained.
Mr. Paulson stressed to online news source SvD Näringsliv how the agency has “encountered this on many occasions but never been able to get into the digital wallets before.” Di Digital claimed the auction’s highest bid came in at nearly twice the asking, 43,000 SEK or an eightysix percent increase.
Ludvig Öberg, of the European bitcoin exchange Safello, gave two pet theories to Di Digital regarding the premium paid. One “is motivated by the publicity that may be associated with being the first ever buyer of bitcoin from the Enforcement Authority,” he mused. “The other theory is that the buyer wanted bitcoin of guaranteed legal origin – and in that case what could be better than buying from the state?”
Scare and Profit
For bitcoiners who’re on the skeptical side, such moves by governments are unsurprising; still others have noticed opportunism in such auctions: on the one hand, governments have long persecuted cryptocurrency users while in recent years profiting off the same source.
An even more cynical view of government auctions would be to appreciate at least that bitcoin is back in circulation or out of government accounts.
Perhaps the most publicized example would be Ross Ulbricht’s waiving of a similar auction yield, covered extensively by news.Bitcoin.com. In that case, Mr. Ulbricht waived his claim, and 48 million USD found their way into federal law enforcement coffers.
Ross Ulbricht and his family were careful to alert all concerned how Mr. Ulbricht was not giving-in. Those wishing to learn more about him and the current state of his case are encouraged to visit Free Ross.