According to a Telegraph article, the Swedish government is compelled to restore about R20 million in bitcoin to a drug dealer after the value of the digital asset increased while he was in detention.
The shifting price of the world’s largest cryptocurrency was responsible for the extraordinary turn of events.
According to the Telegraph, when the Swedish Enforcement Authority seized 36 bitcoins from the drug dealer two years ago, the coins were worth roughly $136,000 in total. This values each bitcoin at around $3,700.
Prosecutor Tove Kullberg successfully argued in court at the time that the drug dealer should be stripped of his illegally acquired bitcoin. Kullberg, on the other hand, utilised the monetary equivalent to make her case at the time, oblivious to the rate at which bitcoin’s value would rise.
As of August 20, bitcoin was worth around $48,978 per coin. The asset has increased by 66 percent year to date and 313 percent in the last year. The dealer’s 36 bitcoins worth two years ago are now worth only three bitcoins.
The authorities planned to sell off all 36 of the dealer’s coins after he was released, according to The Telegraph, but Kullberg’s arguments during the case meant the state only seized three coins’ worth.
According to the prosecution, the government was forced to refund 33 bitcoins, which were valued around R20 million at the time of publication, despite knowing full well where the monies came from.
Kullberg bemoaned the outcome, calling it “unfortunate in many respects” on Swedish Radio.
“The lesson to be learned from this is to retain the value in bitcoin, that the benefit from the crime should be 36 bitcoin, regardless of how much bitcoin is worth at the time,” Kullberg said. “It has resulted in ramifications that I could not have predicted at the time.”
The prosecutor did clarify that because this was the first instance in the country’s legal history involving cryptocurrency seizure, there was no legal precedent established by earlier verdicts.
“I think we should probably engage in internal education in the [prosecution] authority, because cryptocurrency will be an issue we’ll be dealing with a lot more than we are now,” she told Swedish Radio. “The higher the level of expertise throughout the organisation, the fewer errors we will make.”
Cryptocurrency-related crimes have become a rising source of concern for regulators and businesses. The Bank for International Settlements recently chastised the digital asset for its role in unlawful operations.