Australian Authorities to Sell $9.6 Million Worth of Bitcoins Seized from Silk Road Drug Dealer

November 2, 2014 07:17 UTC

Following the arrest, two years ago, of a Silk Road drug dealer living in Melbourne, Victoria authorities announced the planned sale of the $9.6 million worth chunk of the digital currency seized during the investigation. The Australian citizen, Richard Pollard, was sentenced on Friday to 11 years jail time after pleading guilty to commercial trafficking, accompanied by a non-parole period of seven years and four months. The 325 days he already served in custody will be subtracted from the total.

The two houses belonging to the 32 years old man were raided in late 2012,  in accordance with a search warrant obtained by  the authorities. They found there a large variety of drugs as well as IT equipment used to operate, according to Judge Paul Lacava, “A relatively large and sophisticated drug-trafficking business.” The court mentioned that Pollard reportedly used multiple post office boxes under different names to avoid any suspicion from authorities.

Victoria police also found $58,000 in cash during the search and later confiscated three bitcoin wallets containing 24,518 bitcoins – about $9.6m – suspected to be linked to the sale of 2.8 kilograms of MDM, 61 cannabis plants and other drugs between August and December 2012.

The defendant was in possession of a veritable arsenal that includes a huge amount of envelopes and post satchels that were facilitating the distribution of drugs ordered by customers on drug marketplace Silk Road. The documents shown during the trial included several names and addresses, suggesting further arrests in the coming months. A spokesman said that the seized bitcoins will go to the Asset Confiscation Operations office in the Victoria Department of Justice until the public auction. The proceeds will be directed to the state’s consolidated fund.

Also read: Bitcoin ATM Seized in 2.6 Million Dollar Drug Trafficking Investigation

A Good Income for Public Authorities

This case is part of the numerous arrests that hit the headlines over the last year. First was The Silk Road case,  whose alleged founder, Ross Ulbricht, saw his 19 million worth bitcoin wallet seized and sold by the US marshals earlier this year. An Australian bitcoin ATM operator was also arrested few weeks ago, following a nation-wide investigation related to drug trafficking and gang activities while the ATM is still under extensive examination.

But the problem, unfortunately, also affects exchanges for more obscure reasons such as regulation issues. We can learn from the example of the French exchange bestxchange that got all their wallets seized – 388 bitcoins, about €180,000 at this time – as well as €9000 in cash, multiple credit cards and computer hardware.

The owner of the exchange was then charged for “illegal employment, illegal practice of the profession of banker, money laundering,” among other things.

This judicial episode had greatly surprised the community at the time, due to the low transaction volume of the platform. Indeed, only 2,750 transactions were processed ​​on the website between November 2013 and July 2014, totaling 2,500 bitcoins according to official sources.

Ultimately, everyone Bitcoin related may be likely to appear on the radar of judicial authorities. What do you think? Comment below!

Images from Shutterstock.

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