$5B Bitcoin Hoard Linked to Movie2K Found in German Wallets
Massive Bitcoin Trove Linked to Piracy Ring Discovered
Arkham Intelligence has identified approximately 45,000 Bitcoin, worth nearly $5 billion, connected to the infamous Movie2K piracy website. These funds, held in multiple German wallets, have remained untouched since 2019, sparking scrutiny over previous seizures by German authorities.
Untouched Movie2K Bitcoin Stash
The dormant Bitcoin stash is spread across more than 100 wallets associated with Movie2K. While German authorities seized and liquidated 49,858 BTC in early 2024 from Movie2K operators arrested in 2019, this newly identified 45,000 BTC remained dormant, suggesting it was never in state custody.
German Government's Earlier Bitcoin Sale
In January 2024, the seized 49,860 BTC were sold at an average price of $57,900, generating approximately $2.90 billion. Germany cited potential value loss as the reason for the sale.
Since then, Bitcoin's price has surged, exceeding $123,000 at its all-time high, making the earlier sale appear suboptimal in hindsight.
Challenges in Recovering the Bitcoin
Seizing the newly identified Bitcoin isn't straightforward. Legal proceedings are needed to prove ownership and obtain court orders. Technical challenges, such as dormant keys and complex custody chains, also complicate the recovery process.
The discovery highlights the complexities of managing seized cryptocurrency and raises questions about the potential for nation states to hold Bitcoin as a strategic reserve. The incident underscores the importance of robust blockchain security measures, including advanced tracking and risk assessment tools for digital assets. Codeum's KYC procedures and smart contract auditing could have helped detect and manage the funds related to the Movie2K wallets.
Divergent Views on State Bitcoin Holdings
German lawmaker Joana Cotar has advocated for holding confiscated Bitcoin as a sovereign reserve to maximize returns. Conversely, Bundesbank President Joachim Nagel has cautioned against Bitcoin due to its volatility, comparing it to the historical Tulip Mania bubble.
El Salvador, in contrast, recently moved $678 million in Bitcoin into 14 wallets, aiming to mitigate quantum computing risks while maintaining blockchain transparency.