The High Court in Ireland has ruled that some portion of cryptocurrencies held by a man who’s currently serving prison terms is the proceeds of crime. Criminal Assets Bureau, a law enforcement agency in Ireland, brought proceedings against Neil Mannion in 2015.
They claimed that funds contained in his bank accounts, credit cards and in Bitcoin, were the proceeds of crime. However, not until another search in 2016 did they discover he also owned 2000 units of Ether, worth approximately €25,000.
Niel Mannion had owned Ether before they started trading on any exchange. So, Mannion’s argument was that since Ether had not become a traded currency then, law enforcement agents didn’t have the right to search his computer devices again in 2016 to seize them when they are now a currency.
Ms. Justice Carmel Stewart, the presiding Judge on the case, dismissed Mannion’s arguments that his constitutional rights broke. Niel, who was arrested in 2014, admitted trading on darknet sites, the Silk Road and Agora under an alias, the Hulkster. The court has now deemed all his properties the proceeds of crime, including the bitcoin and ether found in his possession.
Cryptocurrency Used to Finance the Dark Web
Silk Road, hidden on the darknet, was live in 2011, just two years after the birth of bitcoin. One million customers use the dark web’s eBay to buy drugs online. And it depended on the anonymity of bitcoin.
Ross Ulbricht, the founder of Silk Road, gained global notoriety and fueled the misconception that cryptocurrencies were created to fund illegal activity. Reports since then have continued to circulate that bitcoin is applicable to support terrorism. Also some have insinuated that the majority of transactions are illegal.
Only three months ago over a billion dollars in bitcoin transferred from several wallets. All tied to the original Silk Road cold storage wallet.
Fungibility of Cryptocurrencies
Fungibility means every item in a particular set is worth the same amount. In bitcoin, fungibility means that all bitcoins have the same value. However, the blockchain aids the tracking of bitcoins, merchants might refuse to accept bitcoins to fund drug distribution, gambling, money laundering. It means some cryptocurrencies marked for illegal activity are not accessible, making them valueless.
But since the launch of Bitcoin, there have been multiple projects to increase the fungibility of cryptocurrencies. Private cryptocurrencies such as Monero and Zcash ensure that each coin is entirely untraceable.
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