Australian Police Seize Illegal Gun Runner’s Bitcoin to Cash 2000% Profit

Ryan Smith @trendz
October 23, 2019 12:30 UTC

Australian authorities have become unwitting benefactors of Bitcoin’s impressive bull run in recent years.

The Australia Federal Police’s latest Annual Report highlights a bust which netted them a cool 2000% profit. In it, the Feds reveals seized bitcoin worth approximately A$ 7,300 ($ 4,995) in 2016  from a man using the cryptocurrency to purchase three weapons in contravention of the 1901 Customs Act.

The Australian Federal Police (AFP) posted this image of the paper wallet seized in the arrest:

A Bitcoin paper wallet seized by Australian Federal Police | Source: AFP Annual Report

Feds Still Wrapping Their Head Around Public-Private Keys

Despite claiming they had seized the Bitcoin three years ago, it appears officials had only secured the gun runner’s public key. In other words, they had secured nothing since public keys by definition are available to anyone.

In 2018, the AFP finally managed to access the wallet after “protracted negotiations” saw the criminal forfeit his private keys. By that time the unrelenting man had turned the bust into a handsome A$ 154,000 (± $ 105,500) investment.

That same year the AFP published a confusingly titled guide, “Better practice on identifying, seizing, and restraining cryptocurrencies” and subsequently cashed out:

“It was deposited into the Commonwealth’s Confiscated Assets Account. This was the first restraint and forfeiture of bitcoin by the AFP.”

Unwitting Bitcoin Benefactors

The man’s refusal to hand over his private keys ultimately turned out to be a massive boon for AFP’s coffers. Australian police could easily be described as unwitting Bitcoin benefactors.

The gains were so impressive that one local report claims that Australia’s financial administrators may have to upskill their staff in coin management and cryptocurrency trading.

Prices do not go up in a straight line, of course, and the seizure was fortuitous in light of the Bitcoin bull markets of 2016 and 2017, in particular.

Bitcoin ran strong vs the dollar in 2016 and 2017 | Source: TradingView

Despite cashing out it’s still difficult to tell which avenue would have been the most profitable for authorities. U.K police recently auctioned off $662,000 worth of confiscated Bitcoin in a historic first for the country.

The smart money, however, should probably have HODL‘ed on. Tim Draper would know. He’s profited an eye-popping $89 million in the five years since buying Bitcoin in bulk from a 2014 auction.

This article was edited by Samburaj Das.

Last modified: October 23, 2019 12:39 UTC

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Ryan Smith @trendz

Ryan is a web designer, writer, and trader who hails from sunny South Africa. He eats, breathes and lives crypto. With experience following the FX market and a keen interest in the history and evolution of money, Ryan is always trying to understand the bigger economic picture. When not meticulously looking over the charts, he can be found planning his next road trip or running around a 5-a-side soccer field. Twitter LinkedIn