German Government Unveils True Cause of Bitcoin Sell-Off, Considers BTC Price “Insignificant”
German authorities recently completed what they described as an “emergency sale” of close to 50,000 Bitcoin (BTC), revealing that they generated an unprecedented €2.639 billion ($2.88 billion) from the sale. The officials emphasized that the price movements of BTC were considered inconsequential in their decision to sell.
The sale of Bitcoin in Germany occurred between June 19 and July 12, marking the culmination of efforts that commenced in January. The Bitcoin holdings, valued at approximately $2.1 billion at the time of confiscation, were seized as part of an investigation targeting piracy websites and money laundering activities involving individuals from Germany and Poland.
Despite the substantial proceeds from the sale, the funds remain under custody pending the outcome of ongoing criminal proceedings. The prosecutor’s office clarified that the funds are not immediately considered additional income for the Free State of Saxony but are being held until the conclusion of the legal process.
The sale was executed through a collaborative effort involving the Saxon Police’s Central Office for the Safeguarding, Custody, and Utilization of Cryptocurrencies, along with the Dresden Public Prosecutor’s Office. Bankhaus Scheich, a trading firm in Germany, played a crucial role in overseeing the sale in a manner that was fair and minimally disruptive to the market.
The prosecutor’s office emphasized the importance of selling the Bitcoins in a manner that was fair and gentle on the market, highlighting the delicate balance between swiftly liquidating the assets and maintaining market stability.
Bitcoin’s price exhibited extreme volatility during the sale period, fluctuating between approximately $65,000 and a low of $55,000. However, authorities reiterated that market conditions were deemed irrelevant in their decision-making process. Legal requirements stipulating an “emergency sale” in the event of a perceived risk of significant value loss, typically defined as 10% or more, guided their actions.
Data from blockchain analytics firm Arkham Intelligence indicated that the seized Bitcoin was sold through centralized exchanges like Kraken, Coinbase, and Bitstamp, as well as over-the-counter firms such as Flow Traders and Cumberland DRW. The decision to proceed with the sale amidst market fluctuations aligns with asset management regulations in Germany, driven by the need to mitigate financial risks posed by the rapid price changes associated with Bitcoin.
