Canadian judge orders drug dealer to forfeit 281 Bitcoins to government

05 Apr, 2019 | Updated: 05 Apr, 2019
by Joeri Cant
Canadian judge orders drug dealer to forfeit 281 Bitcoins to government

A Toronto judge ordered a 30-year old drug dealer to forfeit a total of 284 Bitcoins, worth a tad over $1.4 million, to the provincial government of Ontario.

After hearing expert evidence earlier this year that Matthew Phan, a 30-year old drug dealer, used his Bitcoins to buy a gun and illegal narcotics on the dark web, the Superior Court Justice Jane Kelly ordered that 281 out of 288 Bitcoins be forfeited to the Ministry of the Attorney General.

The Star further reports that Phan pleaded guilty in December 2018, to attemp to import a gun and possess cocaine and other drugs for trafficking that prosecutors said were purchased on the dark web.

Crown attorney Erin Pancer said that there was clear evidence Phan used Bitcoin to finance his illegal activities, and that the court should therefor be satisfied the amount found on his computer is proceeds of crime.

The drug dealing, former Bitcoin millionaire, tried to argue that not all of his Bitcoins were used for criminal activities and that some were used for trading gold.

Read more: Co-host of CNBC's Squawk Box: 'to invest 1% of portfolio in BTC is crazy'

However, the judge stated that although she had no doubt that Phan was indeed just trading Bitcoin for a while, she rejected Phans evidence that there was a legitimate explanation for the large amount of Bitcoins found.

'There is overwhelming evidence to suggest that Mr. Phan was using the dark markets to purchase illegal items such as firearms and silencers. It is clear from the evidence found during searches, particularly of his condominium unit, that he was conducting a large sales operation of illegal narcotics', Kelly said.

'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, using the online marketplaces Evolution and Agora, which are used to buy and sell contraband', she said.

Mr, Phan, however, did receive one lucky break.

The judge added that she was not satisfied beyond a reasonable doubt that 7.23 Bitcoins, valued at roughly $36,000, are proceeds of crime.

'Accordingly, 7.23 Bitcoins will not be forfeited', the judge stated.

Phan is now awaiting further sentencing, if any.

Read more: What can you buy with Bitcoin?: 2010 vs 2023

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