Czech Justice Minister Resigns Over $45M Bitcoin Donation Scandal

Czech Justice Minister Pavel Blazek has stepped down following a scandal over his ministry’s sale of practically $45 million value of Bitcoin donated by a convicted drug trafficker.

The controversy erupted on Might 28 after the ministry posted on X that it had raised near 1 billion Czech koruna (roughly $45 million) by auctioning off practically 500 Bitcoin (BTC).

The funds have been earmarked for initiatives akin to digitizing the justice system, combating drug use in prisons, and bettering housing for jail workers.

Nonetheless, Czech information outlet Denik N revealed that the cryptocurrency got here from Tomas Jirikovsky, a convicted legal behind Sheep Market, a darkish net platform infamous for promoting unlawful items.

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Czech minister accepts Bitcoin donation

In March, Jirikovsky’s lawyer approached Blazek, providing one-third of the Bitcoin as a donation to the Justice Ministry. Blazek accepted with out probing the cryptocurrency’s origins.

“I’ve no strategy to examine the matter, and I wasn’t so a few years after the case,” he said at a Thursday press convention, suggesting the donation mirrored Jirikovsky’s need to “repent.”

Nonetheless, public outcry grew over the transaction’s lack of due diligence. Opposition leaders labeled it a scandal, and police have now launched an investigation into the Bitcoin’s origins.

Jirikovsky was sentenced in 2017 for embezzlement, drug trafficking, and weapons violations. Since being launched from jail in 2021, he has been searching for to reclaim 1,500 Bitcoin seized on the time of his arrest.

Throughout his trial, Czech authorities suspected the funds have been linked to Nucleus, one other darkish net market shuttered simply after Jirikovsky’s arrest. Regardless of this, he maintained the Bitcoin was acquired legally, which allowed him to retain it after serving his sentence.

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Blazek resigns after mounting strain

Dealing with mounting strain and with legislative elections simply 4 months away, Prime Minister Petr Fiala distanced himself from Blazek, a long-time political ally.

Subsequently, Blazek resigned on Might 30. “I’m not conscious of any unlawful motion. Nonetheless, I don’t want to injury the status of the federal government or the governing affiliation,” he stated in his assertion.

On Feb. 6, Czech President Petr Pavel signed a “landmark” cryptocurrency legislation into regulation, offering Czechia with regulatory readability on digital belongings which are aligned with broader European Union legal guidelines. 

The brand new laws simplifies crypto tax guidelines and implements the EU’s Markets in Crypto-Assets (MiCA) regulation “in a manner that helps innovation and growth of the whole business.”

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