A Milestone in Lithuania’s Crypto Management
Earlier this week, Lithuania made headlines by adding a whopping $7.6 million to its state budget through the sale of cryptocurrencies that were seized during criminal investigations. This event marked a historic moment as it was the first time the Lithuanian government chose to liquidate confiscated cryptocurrencies, putting the country in line with others globally who have begun to navigate the murky waters of crypto asset management.
Breaking from Tradition
Unlike their counterparts at the American Federal Marshals, who celebrated a staggering $37 million from a crypto auction just last February, Lithuania opted to partner with a crypto exchange for their transactions. Linas Rajackas, the CEO of the Vilnius-based startup Kaiserex, shared a positive spin on this strategy:
“We managed to sell Bitcoin above average that day’s price, no auction would have achieved that.”
The Efficient Exchange Strategy
The Lithuanian State Tax Inspectorate (STI) made a calculated decision to choose Kaiserex as their technology partner through a public tender. They intended to convert the cryptocurrencies into euros swiftly, leading to a significant influx of funds, around 6.4 million euros. Edita Janušienė, head of the STI, emphasized the strategic direction:
- Public tender process attracted four Lithuanian bidders.
- Kaiserex won based on efficiency and expertise.
- The sale began on November 18 and wrapped in under 24 hours!
From Confiscation to Conversion
The road from seizure to sale was undoubtedly swift. The cryptocurrencies, which included approximately 337 Bitcoin, 360 Ethereum, and nearly 12,000 Monero, were sold at market prices for the day. Rajackas remarked that:
“This market environment allowed us to extract record prices and maximize the conversion to euros.”
Why No Auction?
“Consultations with field professionals led to a consensus that selling at large over-the-counter (OTC) desks would be much more profitable.” When it comes to auctions, “you can’t predict a good day to sell or set the price, making it a gamble.” In this case, the STI’s decision appears to have paid off substantially.
What’s Next for Kaiserex?
Kaiserex, as a broker connecting to over 40 exchanges and multiple OTC desks, plans on maintaining its partnership with Lithuanian institutions for future cryptocurrency transactions. They are also committed to aiding the Lithuanian central bank in its ambitions towards digital currency developments.
A New Frontier for Governments in Crypto
As the bull market briefly saw Bitcoin cross the $19,000 mark, it may well induce other governments to reconsider how they handle seized assets. As Rajackas rightly summed it up, governments should give such financial exposure to dedicated financial ministries rather than tax departments. For now, Lithuania stands tall as a testament to efficient, modern asset liquidation in the cryptocurrency space.
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