Vahur Verte, an Estonian prosecutor confiscated bitcoins earned through illegal undertakings which he referred to as “criminal income.” He said that criminals use this cryptocurrency to hide their criminal prints and activities and to make it difficult for law enforcers to trace them or find out their actions.
An internal report warned that the anonymous bitcoin payment network is becoming a safe place for criminal money laundering, cyber-criminal activity, illegal Drugs trading, terrorism financing, human trafficking, child pornography, illegal internet gambling, and theft of the Bitcoins themselves from their anonymous owners’ virtual wallets.
From the report, it’s evident that bitcoin combines cryptography and a peer-to-peer architecture to avoid a central regulatory authority. However, law enforcement agencies can take heart as even financial experts have no confidence in it as a universal currency and do not believe that bitcoin will stay. Karpeles, CEO at Mt. Gox, which controls more than 70 percent of all global trade in bitcoins said, “If people want to stay safe, don’t buy bitcoin right now…..Bitcoin is a high risk investment…. Its value could be zero the day after tomorrow.”
According to the prosecutor’s office, it cannot be put on record, how many bitcoins or their value have been impounded as the proceedings have not been heard by the court. This happens after law enforcers arrested and detained a 28 year old Estonian student, busted trading large amounts of illegal drugs on the dark web. According to Vahur, the Bitcoins earned by the student from the sale of these drugs was impounded by the court. In a case where the bitcoin earned by a convicted criminal cannot be traced or have been used, other assets or property of equal value should be impounded in place of bitcoins. He added.
Estonia is also the only EU country to apply special strict requirements to Bitcoin. In a similar suit the court decided to apply extra judicial regulation to Bitcoin trading that does not apply to other economic activities. In particular note are restrictions on how exchange services in Estonia must interface with their customers. This included requirement to meet customers in person as well as the requirement keep IDs of ALL customers and report anyone who trade more than 1,000 Euros in a month while the normal reporting limit is 15,000 euros. The use of Bitcoins in Estonia is also spread as its value changes a lot and this makes income from it unpredictable.
Estonia has been considered unfriendly for cryptocurrencies, tracing back to January 2014 from a statement made by the country’s central bank, that referred to bitcoin as a “problematic scheme”. Estonia later pushed for full taxation of ALL Bitcoin trades in the European Union to be applied but when the European Court of Justice (ECJ) weighed the matter in its judgement ultimately exempted bitcoin transactions from Tax.