It’s well known that Bitcoin (BTC) was and still is widely used on the dark web for buying and selling illegal drugs, weapons, and other items. Thousands upon thousands of Bitcoins have been seized by authorities in the past, and they continue to be seized to this day.
The most recent seizure of Bitcoin occured on April 3, 2019, when Toronto’s Superior Court Justice Jane Kelly ordered the forfeiture of 281.41 Bitcoins, equating to about $1.9 million CAD.
Canada’s Largest Forfeiture of Bitcoin (BTC)
The perpetrator is a dark web drug dealer, Mathew Phan, who was arrested by Canadian law enforcement in 2015. According to Canadian news outlet The Star, the forfeiture is believed to be Canada’s largest-ever forfeiture of Bitcoin.
Phan pleaded guilty in December 2018 for the trafficking of illegal firearms and narcotics on the dark web, by which he purportedly accumulated his Bitcoin, now confiscated. Evidence was also found that Phan had been using Bitcoin to purchase illegal firearms and narcotics as well.
Detailing the Case
While Phan was arrested in 2015, the case has been ongoing until February 2019, when the court held a forfeiture hearing.
During the hearing, Crown Attorney Erin Pancer argued that, given the clear evidence that Phan was involved in illegal activities financed with Bitcoin, the court should be satisfied with the amount of Bitcoin found on his computer.
While Phan pleaded guilty to his crimes, he fought the forfeiture, claiming that not all the Bitcoin found on his computer had been accumulated and used for illegal purposes. He claimed that he used the cryptocurrency to buy and sell gold in addition to trading on various cryptocurrency exchanges.
Justice Kelly acknowledged that Phan was indeed trading Bitcoin for a while, but the profits from his investments didn’t add up to the large amount of Bitcoin authorities had seized.
During the hearing, Kelly summarized her reasonings for the forfeiture, saying:
“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. It is a reasonable inference to draw that payment for such illegal narcotics sales was made using Bitcoin that was found in the digital wallet on Mr. Phan’s computer.”
Justice Kelly has stated that she is satisfied with the court proceedings that led to the forfeiture of the Bitcoin. As for Phan’s sentence, it has yet to be decided and will come at a later hearing.
What will happen to the seized Bitcoin? Will the Canadian government auction it off while the price is relatively low or hold on to it for a while? Let us know what you think in the comment section below.
