Surrey Police get budget boost after £1.25m bitcoin seizure

Surrey Police has become the first UK force to seize and convert Bitcoin as part of a criminal probe, netting £1.25m worth of the cryptocurrency, some of which will pay for financial investigators at a time of reduced budgets.

Kingston crown court on Thursday ruled that Seregjs Teresko, a convicted Latvian money-launderer with ties to organised crime, must forfeit £1.45m of his ill-gotten gains, including Bitcoin.

While other forces including the Metropolitan Police have helped send to prison criminals who were using cryptocurrencies, Surrey Police is thought to be the first to succeed in having Bitcoin confiscated by a court.

Surrey Police gets to keep 18.8 per cent of the proceeds of Teresko’s crimes — about £273,000 — which the force can use to top up its operating budget.

Police seized and then converted 295 Bitcoin held by Teresko following a court hearing last October, when one was worth $4,830. The cryptocurrency touched $20,000 at the end of 2017 before falling in value, and one Bitcoin is now worth $7,377.

A digital key that accessed Teresko’s Bitcoin was found by police at his property in Cobham, along with a Rolex watch, Gucci shoes, gold bars, credit cards and cash in sterling, euros and Thai baht.

Surrey Police set up its own Bitcoin wallet and then used an offshore exchange to transfer and convert Teresko’s cryptocurrency.

Saturday, 24 February, 2018

Teresko, 31, is serving more than nine years in prison after pleading guilty last year to money laundering, cultivation of cannabis and the possession and control of articles for use in fraud.

“We have been lawfully audacious,” said Detective Inspector Matthew Durkin from Surrey police’s economic crime unit. “But this case shows Bitcoin is not completely anonymous. It is not above the capabilities of law enforcement; we have the technology and the ability to conduct criminal investigations to identify and prosecute offenders.”

Nick Rhodes QC, who represented Teresko in court, declined to comment

The case comes as authorities around the world are grappling with how to regulate cryptocurrencies as retail investors pile in, with some policymakers arguing they are at best a poor store of value, and at worst pose a financial stability risk and give cover to criminals.

Others see positive uses for blockchain, the digital ledger technology that underpins Bitcoin. The UK financial regulator this month granted its first temporary approval to financial technology companies experimenting with blockchain in their products.

Additional reporting by Hannah Murphy in London

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