In May, a series of raids by Bulgarian law
enforcement were reported to have resulted in
the seizure of over 213,000 BTC, at the time
valued at more than $500 million and now worth
$3.2 billion USD. Yesterday, however, the head
of Bulgaria’s Special Prosecutor’s Office, Ivan
Geshev, stated that the Prosecutor’s Office and
the Interior Ministry did not seize the bitcoins.
Also Read: Bankers Have Shut Down All of
Bulgaria’s Bitcoin Exchanges
Today, the Seized Bitcoins Are Estimated to Be
Worth 6% of the Bulgarian GDP
On May 19 of this year, European authorities
announced the successful execution of a joint
operation in conjunction with the Southeast
European Law Enforcement Center (SELEC) that
had successfully resulted in the seizure of
213,519 bitcoins. The bitcoins were taken from a
criminal group comprised of “Bulgarian nationals
[with] connections in the former Yugoslav
Republic of Macedonia, Hellenic Republic,
Romania, and Republic of Serbia,” accused of
“recruiting corrupted Customs officers in all
involved countries with the purpose to infiltrate a
virus in the Customs’ computerized systems.”
The virus would then allow the hackers to
finalize the transportation of their goods after
having made it appear as if “the cargo was
already checked and passed” to Customs’
computer systems – circumventing all requisite
fees in the process.
With bitcoin having been valued at approximately
$2,354 USD at the time of the arrest, the seized
bitcoins have since skyrocketed in value – with
current estimates valuing Bulgaria’s loot at more
than $3.2 billion USD according to current prices.
It has recently been reported that the Bulgarian
government has refused to provide details
pertaining to the seized bitcoins, describing such
as a request for “specific information from an
investigation into criminal proceedings.” The
estimated value excludes the additional $300
million USD worth of Bitcoin Cash that could be
retrieved from the stash also.
Skepticism Surrounds the ‘Seized’ Bitcoins
Bulgarian media have reported that the head of
Special Prosecutor’s Office, Ivan Geshev, “said
on December 8 that the Prosecutor’s Office and
the Interior Ministry had not seized Bitcoins.” Mr.
Geshev reportedly attributed the claim that
Bulgarian authorities had seized the bitcoins to
SELEC.
Bulgaria has received significant attention from
cryptocurrency media in recent days owing to
inaccurate reports circulated claiming that the
local government had initiated a crackdown
targeting cryptocurrency exchanges throughout
the country. Sources have informed
news.Bitcoin.com that this is unlikely to be the
case, stating that the decision to suspend the
banking accounts of cryptocurrency exchanges
was made by Bulgarian banks alone. A
statement issued by FiBank asserts that “A large
number of correspondent banks such as JP
Morgan Chase, Commerzbank and a number of
others with whom Fibank is working refuse to
accept transactions for the sale of
cryptocurrencies. In this respect, Fibank can not
continue to provide services to crypto-traders.”
Select Bulgarian Banks Cease Services to
Cryptocurrency Exchanges
One source has stated that “UBB (United
Bulgarian Bank) two days ago and First
Investment Bank (Fibank) one day ago decided
to close the account of cryptocurrency exchange
platforms. One internal source of Fibank said
they were not able to find a mechanism to
satisfy the overwhelming demand from exchange
sites. That’s why their decision to stop working
with exchange sites is because of operational
causes and nothing about regulations/
government intervention or sorts… the decisions
were made by the banks itself, not enforced by
the government.”
The source claims to have reached out to “other
Bitcoin-trading companies that work with other
banks, Piraeus Bank, Societe Generale and they
are operating now, for example, Cix.bg. However,
the platforms that only worked with either UBB
or Fibank such as Bitcoinborsa , Crypto.bg , or
Cryptobank ceased their operations and are
looking for alternative banks now.” The source
concludes that “in short nobody lost anything,
nothing is seized and everybody’s bitcoins are
safe.”
UPDATE: This article was amended to correct
the USD value of the bitcoins at the time they
were seized.
