Court Seizes Bitcoin Worth $1.3 Million from Drug Dealer

[Pegasus]

A Canadian court has ordered the forfeiture of Bitcoin worth $1.3 million from a convicted drug dealer.

There are many ways that the criminal justice system can punish a wrongdoer. The most common is incarceration, but another popular option is the seizure of assets. The courts justify such seizures by linking the assets to the crimes committed. One Canadian man found this out the hard way when the court ordered the seizure of $1.3 million in Bitcoin that they allege were part of his drug dealing criminal enterprise.

Largest Bitcoin Seizure in Canada

Matthew Phan was arrested by law enforcement for attempting to import a gun and possessing narcotics (cocaine, PCP, and ketamine that were bought on the dark web) with an intent to distribute. He pleaded guilty to the charges back in December 2017.

When police arrested Phan back in 2015, they found a quantity of Bitcoin on his computer. Superior Court Justice Jane Kelly has now ruled that the majority of bitcoins found were used for Phan’s illegal activities, so she ordered them seized.

Overall, a total of 281.41 BTC were seized by the court. The current value of the seized coins is $1.36 million USD. Phan argued that not all the bitcoins were used in his criminal enterprise as he also used them to buy and sell gold. The court believed he acted as a trader but that there was no “legitimate explanation” for the large amount of BTC found on his computer.

This seizure is believed to be the largest forfeiture of Bitcoin yet in Canada.

Phan Retains Some BTC

In her ruling, Superior Court Justice Jane Kelly said:

There is overwhelming evidence to suggest that Mr. Phan was using the dark markets to purchase illegal items such as firearms and silencers. It is clear from the evidence found during searches, particularly of his condominium unit, that he was conducting a large sales operation of illegal narcotics.

It is a reasonable inference to draw that payment for such illegal narcotics sales was made using Bitcoin that was found in the digital wallet on Mr. Phan’s computer.

Phan isn’t totally broke. The court left him 7.23 bitcoins that are worth roughly $35,000. Still, the court made out like a bandit. When the 288 coins were first found on Phan’s computer, they were worth about $66,000. Since then, they’ve shot up in value to over $1.3 million.

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