Czech Justice Minister Pavel Blazek has stepped down following a scandal over his ministry’s sale of almost $45 million price of Bitcoin donated by a convicted drug trafficker.
The controversy erupted on Could 28 after the ministry posted on X that it had raised near 1 billion Czech koruna (roughly $45 million) by auctioning off almost 500 Bitcoin (BTC).
The funds had been earmarked for tasks corresponding to digitizing the justice system, combating drug use in prisons, and bettering housing for jail employees.
Nonetheless, Czech information outlet Denik N revealed that the cryptocurrency got here from Tomas Jirikovsky, a convicted legal behind Sheep Market, a darkish internet platform infamous for promoting unlawful items.
Associated: Czech to discover new property, skips Bitcoin as $7B BTC reserve faces criticism
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 mentioned 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 in search of to reclaim 1,500 Bitcoin seized on the time of his arrest.
Throughout his trial, Czech authorities suspected the funds had been linked to Nucleus, one other darkish internet 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.
Associated: Czech Nationwide Financial institution governor to suggest $7B Bitcoin reserve plan
Blazek resigns after mounting stress
Dealing with mounting stress 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 Could 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 mentioned in his assertion.
On Feb. 6, Czech President Petr Pavel signed a “landmark” cryptocurrency laws into legislation, offering Czechia with regulatory readability on digital property 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-Belongings (MiCA) regulation “in a method that helps innovation and growth of your complete business.”
