Is the German government a Bitcoin mixer?

[examplens]

So in the past period, the German government sold over 50,000 Bitcoins seized from illegal activities through various investigations. In that way, they have just cleaned the "dirty" coins, which in some way makes them a Bitcoin mixer (also some other governments)

If the answer is whether they could have done something different, I tried to look for any information on whether there was ever any return of funds to the victims, but I did not find anything. At least not related to the German government.

I am sure that at least part of the funds came from the seizure during the investigation of some organized fraud or scam, where of course there are victims. Is there any case where the government has returned money to the victims after they have completed an investigation?

[Charles-Tim]

So in the past period, the German government sold over 50,000 Bitcoins seized from illegal activities through various investigations. In that way, they have just cleaned the "dirty" coins, which in some way makes them a Bitcoin mixer (also some other governments)

The exchanges, centralized organizations and the government call it dirty coins. But if the coins have been seized and owned by the government, it is not more a dirty coin because those people that calls it dirty have it. The government are not mixers.

I am sure that at least part of the funds came from the seizure during the investigation of some organized fraud or scam, where of course there are victims. Is there any case where the government has returned money to the victims after they have completed an investigation?

I have not seen in any news that German government are giving back the coins to the right owner. I think knowing the right owners would be difficult if it is not directly links to a centralized platform like exchanges.

[examplens]

The exchanges, centralized organizations and the government call it dirty coins. But if the coins have been seized and owned by the government, it is not more a dirty coin because those people that calls it dirty have it. The government are not mixers.

"tainted" coins -> government -> clean coins. This is exactly what the mixers are being accused of.
note: I know that governments are not mixers, this is more of a rhetorical question.

I have not seen in any news that German government are giving back the coins to the right owner. I think knowing the right owners would be difficult if it is not directly links to a centralized platform like exchanges.

Knowing the real owner of a coin is difficult, but knowing that the coins are tainted is very easy. If this were an official announcement, it would sound quite hypocritical.

[Husires]

In the past, dirty money was the money of drugs, organized crime, and criminal gangs. Governments would confiscate money from those entities and sell it, and the victims would not try to recover that money because it might lead them to prison.

What is happening currently is that governments are confiscating money that may not comply with local laws, even if it is not part of dirty activities, so the best description is illegal money into legal money.

[Stompix]

I am sure that at least part of the funds came from the seizure during the investigation of some organized fraud or scam, where of course there are victims.

What victims?
https://www.polizei.sachsen.de/de/MI_2024_103935.htm
All the Bitcoins were actually "voluntarily" transferred by the owners of the pirate website in exchange for a lighter sentence, it was a deal as they had returned all the money they had made from that the sentence would be reduced

Besides, it's not mixing if the initial owner doesn't get his coins back and the one that gets them has to pay for it! 

[taufik123]

What victims?
https://www.polizei.sachsen.de/de/MI_2024_103935.htm
All the Bitcoins were actually "voluntarily" transferred by the owners of the pirate website in exchange for a lighter sentence, it was a deal as they had returned all the money they had made from that the sentence would be reduced

Besides, it's not mixing if the initial owner doesn't get his coins back and the one that gets them has to pay for it! 

This is a kind of compensation by submitting the necessary evidence that will reduce the sentence.
But some criminals won't hand over everything they have in Bitcoin and may just hand over their spare wallets.

And now the German government doesn't own Bitcoin anymore and sells everything for a lot of profit, but will they buy it again, or will they just take money from other crimes?

[bee]

No tainted coin can be absolutely cleaned, even if it has gone through several mixers because it is only to obscure the transaction trace. People only pay attention because the government is the one who defines "tainted coin", of course only they have the definition of "cleaner" and that should not be a private service. Mixers are private services.

[yhiaali3]

This is a funny paradox indeed, the same currencies that governments call “dirty coins” become clean when the government controls them!!! When you are in control you can make labels as you wish.

The same goes for drug money and supporting terrorism. It is dirty money in the eyes of governments, but when the government controls it, it becomes clean money and the government can use it as part of the general spending budget.

So yes I agree the government is actually a “legal bitcoin mixer”.

[Stompix]

And now the German government doesn't own Bitcoin anymore and sells everything for a lot of profit, but will they buy it again, or will they just take money from other crimes?

The German government can't buy Bitcoin right now by the law, besides, even if it were lawfully a reserve currency it's not the government that buys it, it would be the central bank which is an independent body.
As for the possibility of taking more BTC form other crimes, that happens everywhere, probably while we all had this talk the last weeks about MtGox and Movie2k coins there were other seizures in some countries, of course not in the tens of thousands but I'm sure a few BTC now and there., just a google search:
https://economictimes.indiatimes.com/news/india/ed-recovers-268-bitcoins-worth-rs-138-crore-from-haldwani-resident/articleshow/109825366.cms?from=mdr

[Lucius]

Yes, it's strange that when "they" do it, it's legal, and when "we" do it, it's illegal. However, we should not forget that they sit in a position of power and can do things that are essentially bad, but they will always present their moves as justified for any reason, say the protection of national security.

As for the return of seized coins, I think that this happens very rarely, because the process of proving that someone owes something to someone is certainly not an easy or quick process. In the documentary about the Centra Tech scam, it was mentioned that the authorities seized a certain amount of coins, but also that none of the victims received anything in the years after that.

[NotATether]

Maybe, but it would be a terrible mixer, because the first thing you need to know is that the seized coins have already been extensively mapped by chain analysis companies. So you have that part mapped before they even sold coins.

Once they sold the coins to OTC exchanges, they kept records too, and they have their own chain analysis partnerships who map them as well. And there are only a few blockchain analysis companies in the world so it's trivial that one will be responsible for both events.

And also, the amount of bitcoins being seized / sold is so big that it can easily be identified on a block explorer.

[taufik123]

-snip-
As for the possibility of taking more BTC form other crimes, that happens everywhere, probably while we all had this talk the last weeks about MtGox and Movie2k coins there were other seizures in some countries, of course not in the tens of thousands but I'm sure a few BTC now and there., just a google search:
https://economictimes.indiatimes.com/news/india/ed-recovers-268-bitcoins-worth-rs-138-crore-from-haldwani-resident/articleshow/109825366.cms?from=mdr

So the Bitcoin proceeds will continue to be collected and then sold.
The German government may have collected a lot and sold it in the last few days.

But it is possible that some BTC is stored in the CEX so that it is not detected as a reserve for subsequent sales at a higher price.
The more crimes with Bitcoin, the more Bitcoins will be confiscated, and every government will trace all these Bitcoin assets.

[Jaephoenix]

That is a crazy way of putting it.
In that vein of crazy, I also think they are manipulating the market. Imagine the market capitalization and bitcoin price a week or so ago ans the price now, they could have sold some of their bitcoin AfterBurner telling their proxies to sell off then tell them to buy in after they are done. Smart, isn't it?