The recent crash in Bitcoin prices may have been triggered by actions taken by the German federal state of Saxony.
The Bitcoin Seizure
In January, Saxon authorities gained access to a Bitcoin wallet worth about 2.5 billion euros. This wallet belonged to the former operator of an illegal film platform.
Last week, the Federal Criminal Police Office (BKA) reportedly began selling these Bitcoins on a large scale on behalf of Saxony.
According to data service Arkham and Bild, hundreds of Bitcoins were sold over several days.
Controversial Sales
Independent Bundestag member Joana Cotar criticized the sales and urged the Saxon government to halt them immediately.
She believes the cryptocurrency should be kept as a “strategic reserve currency” to protect against risks in the financial market.
Cotar described the action as "counterproductive" and called on Saxony's Prime Minister Michael Kretschmer to stop the "hasty sale of state-owned Bitcoins." She argued that the sale "does not make sense" given the recent collapse in Bitcoin prices.
Origins of the Bitcoin Fortune
The 50,000 Bitcoins were seized by the State Criminal Police Office and the Dresden Public Prosecutor's Office from the former operator of the illegal platform “movie2k.to.”
The sale of these Bitcoins is intended to go into Saxony's state treasury, though it is unclear what the money will be used for.
Investors have reacted with confusion and even accused the government of market manipulation.
The sale of such a large quantity of Bitcoins has likely contributed to the recent drop in Bitcoin prices.
