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Czech Justice Minister Pavel Blazek has resigned following a controversy regarding his ministry’s auction of nearly $45 million in Bitcoin contributed by a convicted drug dealer.
The uproar began on May 28 when the ministry announced on X that it had generated almost 1 billion Czech koruna (about $45 million) by auctioning nearly 500 Bitcoin (BTC).
The proceeds were designated for initiatives like modernizing the justice system, addressing substance abuse in prisons, and enhancing accommodation for correctional staff.
However, Czech media outlet Denik N uncovered that the cryptocurrency originated from Tomas Jirikovsky, a convicted felon associated with Sheep Marketplace, a dark web site infamous for trafficking illicit items.
Related: Czech to investigate new assets, excludes Bitcoin as $7B BTC reserve faces backlash
Czech minister accepts Bitcoin contribution
In March, Jirikovsky’s attorney approached Blazek, proposing one-third of the Bitcoin as a contribution to the Justice Ministry. Blazek consented without examining the cryptocurrency’s source.
“I have no means to investigate the situation, and I wasn’t focused on it so many years after the incident,” he stated at a Thursday press briefing, implying the donation indicated Jirikovsky’s intent to “repent.”
Nevertheless, public outrage intensified regarding the transaction’s negligence. Opposition figures deemed it a scandal, prompting police to initiate an inquiry into the Bitcoin’s origins.
Jirikovsky was sentenced in 2017 for financial fraud, drug distribution, and firearm offenses. After his release in 2021, he began efforts to reclaim 1,500 Bitcoin confiscated during his arrest.
During his prosecution, Czech officials suspected the assets were tied to Nucleus, another dark web market closed shortly after Jirikovsky’s apprehension. Regardless, he asserted the Bitcoin was obtained legally, which permitted him to retain it post-sentencing.
Related: Czech National Bank governor to propose $7B Bitcoin reserve strategy
Blazek steps down amid rising pressure
Amid increasing pressure and with elections approaching in four months, Prime Minister Petr Fiala distanced himself from Blazek, a longtime political confidant.
Consequently, Blazek resigned on May 30. “I am not aware of any unlawful behavior. However, I do not wish to tarnish the reputation of the government or the ruling coalition,” he remarked in his statement.
On Feb. 6, Czech President Petr Pavel ratified a “landmark” cryptocurrency law, granting Czechia regulatory clarity on digital assets in line with broader European Union statutes.
The new law simplifies taxation rules for crypto and implements the EU’s Markets in Crypto-Assets (MiCA) regulation “in a manner that fosters innovation and growth in the entire sector.”
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