It was reported as one of the biggest Bitcoin busts of all time. Last year, the Bulgarian authorities jumped on a criminal gang that was using Bitcoin to launder their illicit gains. The operation was part of a broader collaboration with other European countries.
The investigation itself was called PRAKTA/VIRUS and they managed to bust a cyber-crime ring and take 23 suspects into custody. Not only were they able to make the arrests but they were also recovered a great deal of assets.
Among those assets, it was also reported that 213,519 Bitcoin was also recovered. However, according to official statements from Bulgarian authorities, the coins are no where to be found.
Sophisticated Cybercrime
The group in question consisted of 24 Bulgarian nationals with connections in Macedonia, Serbia and Romania who used computer viruses in order to tamper customs computers. This allowed the criminals to bring goods into the country with the perception that they had been pre-cleared.
Hence, the criminals were able to bring the goods into the country and avoid any taxes that the government may have charged. In fact, 5 of those that were arrested were Bulgarian customs officials. Through their exploits, they were able to defraud the government of at least $10m leva.
According to the statement by the South East European Law Enforcement Centre (SELEC), they were able to seize numerous assets including vehicles, money and equipment as well as devices for communication. More importantly, they claimed that they had seized the Bitcoin.
The offenders chose bitcoin as a way of investing/saving the money because it is rather difficult to be tracked and followed
Given the amount of Bitcoin that they claimed they had seized, the total value at current market prices would make the bounty worth more than $3.2 billion. Just as an indication of how much that means to Bulgaria, it is about 6% of the country's GDP.
Conflicting Information
Many Bulgarians would no doubt be really interested as to how the government planned to spend the windfall from these coins. However, on the 8th of December last year, the prosecutor in charge of the investigation said that no Bitcoin had been seized.
Prior to this, the government also dodged numerous questions as to the location and amount of the missing Bitcoin. They were constantly dismissing it and said that they “did not comment on the status of ongoing investigations”.
Hence, either the SELEC report was incorrect in their assessment of the Bitcoin that was seized, or the Bitcoin has somehow gone missing in the interim. If the latter is the case, it will be the second biggest Bitcoin heist in history.
The title of the largest Bitcoin theft still rests with the 2014 Mt. Gox hack. In that case, hackers were able to steal 850,000 BTC. However, using blockchain auditing technology authorities were able to track the theft to Russian national, Alexander Vinnik.
Therefore, if these Bitcoin were indeed stolen then there is a chance that they could eventually be traced.
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