Dark web, bitcoin, Matthew Phan
If the Bitcoin price retraces to $20,000 and beyond while Phan is incarcerated, the former darknet criminal could easily come out ahead in terms of fiat wealth. | Source: Shutterstock.

By CCN.com: As CCN previously reported, Canadian Matthew Phan has been fighting to keep his cryptocurrency holdings out of the hands of the government after his arrest in 2015 and subsequent conviction. Phan’s argument was tenuous: he argued that not all of his crypto stash came from drug sales and that he should be allowed to keep his altcoins.

The judge in his case has finally ruled on the matter, and Phan comes out in actually half-decent shape. You see, his Bitcoin stash was worth about $88,000 Canadian at the time of his arrest in 2015. Today it is worth about $1.9 million.

7.23 BTC Exempt from Forfeiture

The judge decided that Phan could keep 7.23 BTC, which she was not entirely convinced came from illegal activities. The rest goes to the government as civil asset forfeiture and is the biggest seizure of its kind in Canadian history.

The 7.23 BTC is worth around 49,000 Canadian dollars today, meaning that in terms of fiat value lost, Phan suffers about a $39,000 loss. He currently awaits sentencing. With Bitcoin bulls predicting prices as high as $20,000, $50,000, or even $100,000 in the coming years, he could come out of prison in reasonable financial shape – a rarity for drug dealers, who commonly lose all of their assets and struggle to find employment.

bitcoin auction dark web
Put on your bidding hats, there’s Bitcoin to be had – if authorities decide upon an auction. | Source: Shutterstock

Phan could receive a relatively lengthy prison sentence because authorities uncovered that he was not only trafficking in illegal drugs, but also firearms, which Canada strictly regulates. While Canada is viewed as relatively “soft” on drug crimes and recently legalized marijuana nationwide, firearms infractions can earn you as much as ten years in prison, according to Canada Pardons. According to the same site, you can get up to two years in prison just for “carelessly storing” an otherwise legal gun.

Superior Court Justice Jane Kelly said:

“There is overwhelming evidence to suggest that Mr. Phan was using the dark markets to purchase illegal items such as firearms and silencers. It is clear from the evidence found during searches, particularly of his condominium unit, that he was conducting a large sales operation of illegal narcotics.”

Bitcoin Markets Favor Convicted Dark Web Criminal

If the Bitcoin price retraces to $20,000 and beyond while Phan is incarcerated, the former darknet criminal could easily come out ahead in terms of fiat wealth. If we consider that he used fiat as part of his operation – in acquiring the drugs he was trafficking in – then ultimately, in a strictly financial sense, his crime will have paid off. He will be more than whole after all is said and done, a curious outcome for an otherwise bleak situation.

Contrast Phan with Ross Ulbricht, who was never convicted of selling or buying drugs through the darknet but created the first market to do so. Every coin that authorities could find of Ulbricht’s was seized and sold by the federal government, and he is currently serving life without the possibility of parole, one of the harshest punishments ever laid on a non-violent offender. No other person caught using the dark web to buy and sell illegal items has received anything like this sentence.

We may be hearing of a new round of prosecutions after Dream Market recently shut down, with some suspicious of the timing thereof. Barring a full-scale invasion or honeypot operation, DEA officials in concert with the FBI recently arrested dozens of dark web traffickers.

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