The Czech Minister of Justice, Pavel Blazek, has resigned amidst a scandal involving his department’s sale of nearly $45 million worth of Bitcoin given by a convicted drug dealer.
The uproar began on May 28 when the ministry announced on X that it had accumulated close to 1 billion Czech koruna (around $45 million) by auctioning nearly 500 Bitcoin (BTC).
The revenue was intended for initiatives like digitizing the legal system, addressing drug abuse in correctional facilities, and enhancing accommodations for prison personnel.
Nevertheless, Czech news agency Denik N disclosed that the cryptocurrency originated from Tomas Jirikovsky, a convicted felon involved with Sheep Marketplace, a dark web site infamous for trading illicit items.
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Czech minister accepts Bitcoin contribution
In March, Jirikovsky’s legal representative approached Blazek, proposing one-third of the Bitcoin as a contribution to the Justice Ministry. Blazek accepted without investigating the cryptocurrency’s source.
“I have no means to look into the issue, and I wasn’t concerned so many years after the incident,” he stated at a press briefing on Thursday, suggesting the gift demonstrated Jirikovsky’s intention to “atone.”
However, public backlash intensified regarding the transaction’s insufficient due diligence. Opposition leaders labeled it a scandal, leading police to initiate an investigation into the Bitcoin’s source.
Jirikovsky was convicted in 2017 for fraud, drug trade, and weapon offenses. After being released from prison in 2021, he has attempted to regain 1,500 Bitcoin that was seized at the time of his capture.
During his trial, Czech officials suspected the funds were associated with Nucleus, another dark web marketplace that was closed shortly after Jirikovsky’s arrest. Regardless, he insisted that the Bitcoin was obtained legally, which permitted him to retain it post-sentence.
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Blazek resigns amid rising pressure
Under increasing pressure and with legislative elections looming in four months, Prime Minister Petr Fiala distanced himself from Blazek, a long-standing political associate.
Consequently, Blazek stepped down on May 30. “I am not aware of any unlawful conduct. However, I do not want to harm the image of the government or the governing body,” he mentioned in his statement.
On Feb. 6, Czech President Petr Pavel enacted a “pioneering” cryptocurrency law, offering Czechia regulatory certainty on digital assets that align with broader European Union regulations.
The newly enacted law streamlines crypto tax guidelines and implements the EU’s Markets in Crypto-Assets (MiCA) regulation “in a manner that fosters innovation and growth of the entire sector.”
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