Bitcoin’s Seizure-Resistance Shines, Authorities Fail to Crack $60M Wallet

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In Brief
  • A prosecuted cryptojacker has refused to reveal the password to a $60 million bitcoin (BTC) wallet.

  • The 1,700 BTC it contains has been inaccessible for more than two years.

  • This demonstrates bitcoin's resistance to seizure when carefully secured.

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German prosecutors cannot break the password to a €50 million (~$60 million) bitcoin (BTC) wallet. The original owner is a convicted cryptojacker from the Bavaria region.

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Cryptojacker Refuses to Reveal Bitcoin Wallet Password

In Bavaria, law enforcement has been unable to break the security of a bitcoin wallet confiscated around two years ago. The wallet contains more than 1,700 BTC.

As reported by Reuters, repeated attempts to crack the password protecting the wallet’s contents have failed. According to local police, moving the $60 million stash would require its owner’s cooperation. Bavarian prosecutor Sebastian Murer commented:

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“We asked him but he didn’t say. Perhaps he doesn’t know.”

Of bitcoin’s many ground-breaking qualities, perhaps its most important is resistance to seizure. Lacking central intermediaries, no network authority can authorize a transaction without first knowing a wallet’s details, such as its password.

In a non-crypto investigation, seizure would usually be much more straightforward. Banking institutions cooperate with authorities in such investigations by freezing funds.

The wallet’s owner served a two-year jail sentence, refusing to reveal the password. He was prosecuted for cryptojacking. BeInCrypto previously reported on the practice that covertly installs cryptocurrency mining software on victims’ computers and collects the rewards.

Awaiting Riches on the Outside?

Having spent over two years behind bars, the criminal’s bitcoin holdings have rocketed in value. Although his date of incarceration is not clear, the BTC price has grown significantly since 2019.

During most of December 2018 and the start of January 2019, bitcoin traded below $4,000. Today, it’s trading around $38,000. However, he may not have a happy ending after all. Reuters claims that prosecutors are confident the man cannot even transfer the funds himself.

That said, the cryptojacker may have managed to convince law enforcement that he doesn’t have a backup of the private key or password. If he does, it would be impossible to stop him from moving the funds.

Millions of BTC Lost Forever?

Of course, it’s possible that the cryptojacker’s fortune will end up among those bitcoin lost forever. Some speculate that as much as 20% of all circulating BTC may be lost.

The UK’s National Cyber Security Council estimates that owners of more than $140 billion in bitcoin cannot move their funds. This includes tales of other lost fortunes like former Ripple Labs executive Stefan Thomas. Even inexperienced users lose their BTC.

Thomas claims to have lost a piece of paper with the password to his 7,000 BTC hardware wallet. The experience has understandably made him quite upset.

Although devastating for their owners, the lost bitcoins are actually beneficial to the rest of the market. Unrecoverable BTC reduces the circulating supply, pushing up the price of the remaining accessible coins.

Disclaimer

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A former professional gambler, Rick first found Bitcoin in 2013 whilst researching alternative payment methods to use at online casinos. After transitioning to writing full-time in 2016, he put a growing passion for Bitcoin to work for him. He has since written for a number of digital asset publications.

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