This Is How Confiscated Bitcoin, Ethereum, And Monero Sold By The Taxman

Source: Adobe / stockphoto-graf

The sale of the seized crypto for 6.4 million EUR (7.63 USD) for the Lithuanian tax authority was a lengthy and complicated process that took at least two months and a long preparation and detailed coordination between seller, supplier, trading partners and intermediary banks to avoid problems and delays during the sale, according to the CEO of the Lithuanian Investment and Exchange Service who carried out the sale.

As already reported, on November 18th the Lithuanian State Tax Inspectorate (STI), sold Bitcoin (BTC), Ethereum (ETH) and Monero (XMR) worth EUR 6.42 million, which were seized in February 2020. This was the first time the agency sold seized crypto assets. You did this with the help of the supplier Kaiser Exchange International, aka Kaiserex.

And although the details of the seizure itself are not available, said Linis Rajackas, CEO of Kaiserex That “from my experience with cryptocurrencies and some knowledge of the market, I would suspect that it is related to illicit drugs. Given that STI had a significant amount of Monero, over XMR 11,000, which is a preferred currency on the dark internet due to its anonymity.” He said, adding that he “did not know the exact source of the seizure and did not ask about it”.

In total, the company sold BTC 336.85357, ETH 360.37325 and XMR 11,992.81.

The sales process began with the start of the public competition for the sale of cryptocurrencies in early September. According to Kaiserex, the company was one of four suppliers that met the requirements of the public procurement tender and offered the lowest price. The CEO said they “had to pass extensive due diligence, both personally and as a company, to present a contract that included significant amounts of cryptocurrency trading volume, had skilled staff, had been in the market for a number of years, etc.” ”

After the company won, they signed the contract with the STI on November 10th. The STI was very responsive to our advice that it was a very good time to sell as all prices were at record highs and we were selling it [confiscated crypto] 8 days later. ”

“It was made by one of the largest OTC [over-the-counter] Desks in the crypto market. It consisted of fewer than 20 trades timed at the right time. The trading time was about 12 hours, “said the CEO without naming the OTC counter.

According to the company, the STI’s quick response to the sell recommendation made it possible to sell the cryptocurrency “at record prices and to win the maximum amount of euros”.

And while the sale took less than a day and the money landed in the hands of the STI in less than two days, the actual preparation of the sale took more than a month. This consisted of at least two main parts:

  1. Given that the crypto seized was most likely related to crime, the company had to ensure that no trading partners freeze the trading process if Kaiserex sent them crypto from these potentially blacklisted wallets as their KYT (Know Your Transactions) systems would probably put a red flag on it.
  2. Make sure that all intermediary banks expect these transactions and have all the documentation upfront.

Rajackas added:

“I can’t reveal specific details, but it was a complicated and lengthy process. Any slack or misunderstanding could have resulted in delays and problems with the sale.”

The biggest challenge during this entire process, according to the CEO, was “coordinating everything together,” including the partners buying the crypto, STI selling the crypto, and the intermediary banks sending the money with no delays . “To generalize, the hardest part was talking to compliance departments, providing documents and explaining what we were up to,” he said.

It turns out, however, that a month of preparation isn’t actually a lot of time for the whole process, which is a lesson Kaiserex learned, Rajackas said. He said “It is never too early to prepare for such deals.” They started pre-sales even before entering the public competition in September and “thought we had plenty of time to do it. Now when I look back, I see how much it helped to be early and well prepared. We had.” neither does it. ” a lot of time at all. “

The company plans to continue working with the Lithuanian institutions on similar cryptocurrency deals as the current contract with STI is valid for the next year.
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