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Finnish Customs plans to cash in on confiscated bitcoin

The agency currently holds an estimated 60 million euros worth of the cryptocurrency.

Bitcoin-virtuaalivaluutan logo,
Customs' bitcoin assets come from drug-related seizures. Image: AOP

Finland’s Customs office has announced plans to sell its cryptocurrency assets.

The agency has previously hesitated over what to do with an estimated 1,981 in bitcoin, mostly seized in connection with narcotic investigations.

At the current exchange rate, the blockchain-based currency could be worth up to 60 million euros, although the value of Bitcoin has fluctuated hugely in recent years.

Most of the agency’s crypto assets date from 2016, when 1,666 bitcoins were seized in a major drug bust. The value of that seizure was initially less than 700,000 euros, but at today’s price it has risen to more than 50 million euros.

The agency's Chief Financial Officer Pekka Pylkkänen told Yle that the it plans to either sell the cryptocurrency itself or through an intermediary over the next few months.

Customs previously made plans to auction off its bitcoin stock in 2018, but decided against the move due to concerns that the virtual money would circulate back into the hands of criminals.

Bitcoin and other cryptocurrencies are based on blockchain technology which, put simply, are digital assets that can be sent peer-to-peer without the need for a centralised party, such as a bank. This decentralisation effectively bypasses the services -- and the scrutiny -- of traditional financial institutions, making them an ideal unit of currency for drug trafficking.

However, Bitcoin itself is a perfectly legal currency, and is mainly used as an investment product.

Selling deemed the best option

Pylkkänen said that while the risk of funds being returned to the criminal market still exists, the Customs office has come to the conclusion that, under current legislation, it has no other option but to sell the assets.

"We had the options of handing them over to another government agency or some other party or destroying them. We came to the conclusion that alternatives other than sales are not realistic," Pylkkänen said.

Finland's Financial Supervisory Authority (FIN-FSA) officially began regulating the crypto currency sector last year and drew Customs' attention to the fact that confiscated property should be sold.

Experts interviewed by Yle also questioned Customs' concerns over the currency returning to criminal gangs, as bitcoin is not used for criminal purposes as much as it was in the past.

At the moment, however, it seems that Custom’s hesitation has turned out to be a profitable investment strategy, as Bitcoin’s value rose to an all-time high at the turn of this year.

If Customs can secure the sale of the assets, it will transfer the money to the Ministry of Finance.

The agency must, however, wait on a confiscation order for the final amount, which has not as yet been confirmed. The exact figure will be decided by last year's financial statements, which will be available soon.

In addition to the bitcoin assets, Customs also has a virtual cache of millions of euros in other cryptocurrencies it acquired while investigating other criminal cases over the years.

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