Canadian Court Orders Drug Dealer To Give Up His Bitcoins

By Rishma Banerjee

With the rise in the popularity of Bitcoins, there has also been an exponential growth in the rise of related illegal activities. This clubbed with the presence of the dark web and the relative ease with which one can get on it, has complicated matters further for cryptocurrency regulators.

According to reports published by The Toronto Star, a court in Toronto, Canada, has passed a ruling that a 30-year old drug dealer must forfeit CA$1.88 million (US$1.41 million) in bitcoins which had been used by him to finance illegal activities on the dark web. Matthew Phan was ordered on Wednesday by Superior Court Justice Jane Kelly to hand over 281.41 bitcoins to the Ministry of the Attorney General. The funds reportedly will be going to the province of Toronto.

Phan had reportedly pleaded guilty last December to the charges of attempting to import a gun and possessing cocaine and other drugs for trafficking that prosecutors said were bought on dark web sites.

Kelly was quoted as saying in the report:

“It is a reasonable inference to draw that payment for such illegal narcotics sales was made using bitcoin that was found in the digital wallet on Mr. Phan’s computer.”

In a forfeiture hearing that was conducted earlier this year, Phan had argued that not all of his bitcoin had been used for illegal activities and that some had been used for trading gold, the Star reports. He also claimed that he was selling the cryptocurrency on various cryptocurrency exchanges. As a result, in Wednesday’s ruling, Kelly said that, of the 288 bitcoins, she was “not satisfied” that 7.23 bitcoins (worth around $36,000) were proceeds of crime and that they would not be forfeited. Phan, whose computer holding the bitcoins was seized in 2015, is yet to be sentenced.