British Columbia Claims Ownership of Bitcoin seized from Alleged Silk Road vendor

British Columbia has filed a lawsuit through the director of forfeiture; the government has initiated the lawsuit with the aim of claiming ownership to bitcoins it seized from a marijuana dealer they alleged was a vendor in the now-defunct Silk Road. The police seized the bitcoins valued at $1.4 million in April 2013.

According to BC authorities, the bitcoins were seized from a marijuana vendor who went by the pseudonym MarijuanaIsMyMuse on Silk Road. The dealer was sentenced to nine months in prison in 2015, after denying any ties to Silk Road and earning bitcoins illegally. Yet, no attempts were made by the authorities to claim the confiscated bitcoins.

The dealer was arrested after police answered a 911 call to his house. Once in the house, the police suspected the presence of marijuana in the house and arrested him. On obtaining a search warrant, the police seized 15 kilograms of marijuana after raiding the house. Some of the marijuana found was in vacuum sealed bags while the rest was in sealed packages ready for postal delivery. Packaging materials, hard drives and laptops were also seized.

The seized electronic devices were not given back to the dealer when he made attempts to recover them in April 2017. He later received a court order asking the police to surrender his devices. The police, however, did not give the hard drives back.

The suit filed by the director of forfeiture alleges that the hard drives seized contained evidence that he sold other drugs apart from marijuana. The hard drive allegedly carries evidence of the dealer selling MDMA, cocaine, heroin, and ketamine.

The dealer, however, requested to disregard the evidence obtained from the hard drives. The man claims that any evidence from the hard drives was obtained illegally since it involved searching through private property with total disregard for a court order that asked the police to surrender the device to him.

The dealer however maintains that the seized bitcoins were not gained from drug dealing nor used to facilitate any crimes. Civil forfeiture in British Columbia was enacted in 2006 and can proceed even if one was not charged or was acquitted. The director of forfeiture has to prove that the property to be forfeited was earned following or prior to a criminal act or facilitated crime. All this is done using evidence obtained by the police.

Cases of bitcoins being seized mainly from dark web dealers of drugs and weapons have been on the rise. Authorities are always making attempts of confiscating the funds and selling the coins. In one of the most recent case, the US Government was allowed to sell bitcoins seized from a fentanyl trafficking ring in Utah. The bitcoins were sold even before the sentencing of the gang members ended. The bitcoins were sold for over $8.5 million and the money used to cater for sales and storage costs of other items seized from the gang.