Second Biggest Theft of Bitcoin Ever: Bulgaria’s Bitcoin Mystery

Virtual wallets with a total of 213,519 bitcoin have gone missing while in the reported possession of Bulgarian authorities. The digital currency was seized as part of a criminal investigation called PRATKA/VIRUS that the South East European Law Enforcement Centre (SELEC) carried out in partnership with Bulgaria. The international cybercrime bust, arrests of 23 suspects and seizures of property including bitcoin were reported by the SELEC in May 2017.

Yet on December 8, 2017, the head of Bulgaria’s Special Prosecutor’s Office, Ivan Geshev, stated at a news conference that “no bitcoins had been seized.” So, the official location of the cryptocurrency taken in by the government during the arrests is now a mystery.

An organized crime syndicate comprised of Bulgarian nationals connected to partners in Macedonia, Romania, Greece, and Serbia were the focus of the investigation. The criminals had reportedly been working with corrupt customs officials throughout these countries to install viruses into the various customs’ computing networks. Once this was achieved, illegal transports across borders were easy for them to carry out because the customs systems were manipulated to show their illicit cargo had already been checked and approved.

The SELEC statement says Bulgarian authorities seized more than “100 addresses, suspects, and vehicles… money… equipment, devices for communication, computers, tablets, bank documents, etc…. Bitcoin wallets of the main suspects with a total value of 213,519 bitcoins were also found… The offenders chose bitcoin as a way of investing/saving the money because it is rather difficult to be tracked and followed.” Five of the 23 people arrested were serving as Bulgarian customs officers. According to the SELEC, judicial procedures are underway, and eight of the offenders have already been “permanently detained.”

As of January 9, 2018, the 213,519 digital coins would be worth more than $3 billion. But in November 2017, the Bulgarian government declined to discuss the status of the cryptocurrency, stating, it would not comment on “specific information from an ongoing investigation into criminal proceedings.” In December, the Special Prosecutor’s Office followed up with the surprising announcement that no cryptocurrency had been seized at all. The missing digital currency would currently account for about six percent of Bulgaria’s GDP of about $52.4 billion. During December, and in the same week as Geshev’s announcement, Bulgarian banks terminated the accounts of several cryptocurrency exchanges.

The largest theft ever of bitcoin remains the 2014 cyber-attack on Tokyo-based bitcoin exchange Mt. Gox when hackers stole 850,000 units of the cryptocurrency as well as $28 million in cash. The amount stolen would now equal more than $12.5 billion.