Exchanges outdo auctions for governments cashing in criminal crypto, says exec

Friday 27 November 2020, 9:41 PM AEST - 1 month ago

Earlier this week, Lithuania's tax service, the Lithuanian State Tax Inspectorate, added $7.6 million dollars to the state budget through the sale of cryptocurrencies seized in criminal investigations.

The occasion marked the first time that the Lithuanian government liquidated confiscated cryptocurrencies. In doing so, the country joined the growing number of jurisdictions worldwide that have auctioned off or sold cryptos obtained by the long arm of the law.

However, unlike the United States Federal Marshals, which netted $37 million at auction from confiscated crypto last February, the STI opted to sell the crypto through an exchange. According to Linas Rajackas, CEO of Vilnius-based crypto startup Kaiserex, this seemed to work out in the regulator's favor:

"We managed to sell Bitcoin above average that day's price, no auction would have achieved that. STI spent less than 0.2% from the total received amount (6.4 million euro) on exchange fees, legal contracts and crypto transaction services. So it was as efficient as it can possibly get.

The STI chose Kaiserex as a technology partner for selling the cryptocurrency via a public tender. STI head Edita Janušienė told Cointelegraph:

The goal of the STI was to convert the cryptocurrency into euros as soon as possible. Therefore, first of all, a decision was made to announce a public tender in search of a national supplier. Four Lithuanian companies participated in the tender, which was won by Kaiserex.

According to Janušienė, the crypto sale started on Nov. 18 and took nearly 24 hours to complete, with the STI eventually adding more than 6.4 million euro to the state budget. The rypto was initially confiscated by a local court. While Janušienė confirmed the partnership Kaiserex, she did not elaborate as to why the regulator shied away from the auction model.

Rajackas speculated that [the STI] have consulted with professionals in the field and it was obvious that selling at large OTC desks would be much more profitable than doing it in an auction. Auction in comparison is a very bad choice, because you can not know in advance a good day to ...

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