Authorities may soon reap millions of dollars by selling more than 24,500 bitcoins confiscated from a Melbourne drug dealer.
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This was the first time the state of Victoria had seized electronic currency from criminals.
The currency's volatility has seen the value of the seized asset jump from $700,000 at the time of the man's arrest to nearly $32 million shortly after it was confiscated. Today the bitcoins were worth about $9.6 million.
The assets are subject to a restraining order and would soon be forfeited to the Department of Justice and sold at auction, but not before the appeal period ends in 28 days. Proceeds would go to the state's consolidated funds.
Richard Pollard, 32, of Warrandyte, was sentenced in the County Court in Melbourne on Friday to 11 years' jail after pleading guilty to commercial trafficking. He received a non-parole period of seven years four months and has already served 325 days in custody.
Police were monitoring Pollard in late 2012 when they executed a search warrant on two properties and found a variety of drugs, computer equipment and post satchels.
The court heard Pollard trafficked 2.8 kilograms of MDMA, 876 grams of ice, 44 grams of cocaine, 30 grams of ketamine, as well as fentanyl, methorphan and poisons between August and December, 2012. Police also found 61 cannabis plants.
Police also found express post envelopes used to distribute drugs and printouts from online trading site Silk Road showing names and addresses for drug orders, according to court documents. Pollard used multiple post office boxes under different names to conceal the volume of mail he received and sent, the court heard.
Judge Paul Lacava told Pollard: "You were operating a relatively large and sophisticated drug-trafficking business ... You used the website Silk Road to acquire and on sell a variety of drugs, which you delivered mainly by using express post.
"The system of drug trafficking you engaged in meant you operated an effective one-stop shop where a variety of drugs could be purchased online."
While Pollard used ice and cannabis himself, the trafficking was to make money, not satisfy his own habit, the judge noted.
When Victoria Police searched his property in December 2012, they found $58,000 in cash. They later found three electronic wallets containing 24,518 bitcoins., which were confiscated in 2013.
The court was told that while on bail, Pollard was stopped for a random licence check and police found money in his car, including $4000 in his sock, and drug paraphernalia. A further search of his property found he was trafficking again.
Bitcoins were created in 2008 as an electronic currency for online trading. Coins are "mined" by using computers to solve mathematical problems, with about 13.4 million coins in circulation.
Bitcoins have been popular with drug dealers for their anonymity but are also used to pay for legitimate purchases online and offline.
In late 2013, the FBI arrested Silk Road's alleged founder and called it "the most sophisticated and extensive criminal marketplace on the internet today". US authorities also confiscated 144,000 bitcoins from the man.
Pollard trained in IT and previously worked for a company called Wireless IP that reportedly owed him $70,000 when it collapsed. He set up his own IT company but was often owed money by customers. Justice Lacava noted Pollard's intelligence and talent with computers was misused for trafficking, but could be used "to good effect" when he was released.
The confiscated property would go to the Asset Confiscation Operations office in the Victoria Department of Justice. A spokesman said seized property was sold at public auction and proceeds directed to the state's consolidated fund.
