Czech Bitcoin Scandal: A Case of Money Laundering or Government Mismanagement?

In mid-June, the Czech parliamentary opposition put forward a vote of no confidence against the current government after the Ministry of Justice sold nearly 500 BTC, which had been donated by a convicted criminal (approximately $45 million at the time of sale).

This situation is closely tied to an investigation involving the dark web platform, [Sheep Marketplace](https://en.wikipedia.org/wiki/Sheep_Marketplace). Launched in March 2013, it gained rapid popularity after the shutdown of [Silk Road](https://forklog.com/exclusive/istoriya-silk-road-kak-bitkoin-vyvel-darknet-ekonomiku-na-novyj-uroven), largely due to its similar range of illegal goods and services.

However, by December of the same year, the anonymous marketplace announced its closure following the theft of 5400 BTC (about $6 million back then) by one of the sellers.

Years later, two residents of Florida, Shawn McCurtain and Nathan Gibson, were deemed [guilty](https://www.justice.gov/usao-mdfl/pr/more-17-million-forfeited-funds-presented-law-enforcement-agencies) of stealing assets from Sheep Marketplace.

The site’s creator, Czech programmer Tomáš Jiříkovský, was [arrested](https://forklog.com/news/politsiya-chehii-vydvinula-pervoe-v-strane-obvinenie-v-bitkoin-piratstve) in the spring of 2016. He faced charges related to the theft of about 40,000 BTC during the Sheep Marketplace exit scam, as well as drug trafficking and illegal possession of weapons. In 2017, Jiříkovský was sentenced to nine years in prison.

By 2021, he had been released on parole and requested the authorities to return the seized equipment, including a laptop containing a Bitcoin wallet with around 1560 BTC. The case [stalled in court](https://www.seznamzpravy.cz/clanek/domaci-kauzy-miliardar-z-trziste-pribeh-zamecnika-kotoryj-daroval-miliardu-v-bitcoinech-277896) until March 2025, when Jiříkovský, through his lawyer, donated 468 BTC (30%) from the confiscated assets to the government.

The Ministry of Justice was slow to liquidate these bitcoins. It exchanged them for crowns [following standard procedures](https://publico.cz/cesko/bitcoiny-aukce-ministerstvo-spravedlnosti) in collaboration with the Czech Property Management Agency (ÚZSVM) through electronic auctions of 5 BTC per tranche from late March to May 27, 2025. The sales contracts are recorded [in a registry](https://www.hlidacstatu.cz/HledatSmlouvy?q=ico:00025429%20BTC&page=1&qtl=12,3&u=1).

On May 28, the Ministry announced the completion of the auction of cryptocurrency sales, totaling 956.8 million Czech crowns (approximately $45 million at the time), without disclosing the origins of the funds.

The collected amount was [planned for justice projects](https://www.seznamzpravy.cz/clanek/domaci-politika-blazek-nevidi-nic-neetickevo-na-prijati-bitcoinu-od-odsuzhenogo-muzha-277856).

Later that evening, the independent Czech publication [Deník N](https://denikn.cz/1745597/blazkovo-ministerstvo-si-vzalo-miliardu-v-bitcoinech-od-obchodnika-s-drogami-resi-to-policie/) revealed that the bitcoins were a donation from the convicted Jiříkovský.

According to [certain sources](https://www.marigold.cz/item/jirikovsky-blazek-sheep-nucleus/), the donation to the Ministry’s wallet originated from a source linked to another dark web marketplace known as Nucleus Market. Although the platform was not connected to Sheep Marketplace, it abruptly ceased operations in 2016, shortly after the arrest of Tomáš Jiříkovský.

The outlet [Radiožurnál](https://www.irozhlas.cz/zpravy-domov/kauza-bitcoiny-v-penezence-nebyly-3-miliardy-ale-12-informace-ministerstva-o_2505301834_vtk) claims that the bitcoins sent to the Ministry were transferred in five separate payments on March 7 in the presence of a notary. Four of these allegedly originated from the Nucleus Market account, while one came directly from Jiříkovský’s account, where he had moved funds the previous day.

An analysis of the [Nucleus Market wallet](https://bitinfocharts.com/bitcoin/wallet/NucleusMarket) revealed that it still holds 3855.15 BTC. One theory suggests that access to these funds is unavailable.

Nonetheless, some experts consider attributing assets from Nucleus Market to Jiříkovský to be «untrustworthy and unlikely.»

The now-former Minister of Justice, Pavel Blažek, stated at a press conference that they accessed Jiříkovský’s wallet within 30 hours. This may [be explained](https://www.linkedin.com/pulse/n%C4%9Bkolik-post%C5%99eh%C5%AF-v-souvislosti-bitcoinov%C3%BDmi-jiri-berger-2xxxf/?trackingId=JASkX2YIQGmVhMIvNGhpWA%3D%3D) by the fact that at the time of its creation, technology only allowed for access to funds stored at wallet addresses kept in a file. Nowadays, seed phrases grant universal access to assets.

The Deník N article triggered a public outcry. The main opposition party, the right-wing conservative ANO, accused the government of corruption and opaque asset sales.

Deputy Chairwoman of the party, Alena Šillerová, remarked that «there was no alternative but to initiate a vote of no confidence.»

Among ANO’s demands is an independent investigation to determine whether the legal status of the bitcoins was properly verified before the sale. Additional outrage stemmed from reports that some auction winners are seeking refunds and clarifications regarding potential compensation.

Legal experts and opposition leaders did not rule out that the donation might have circumvented asset forfeiture laws. The National Center Against Organized Crime (NCOZ), under the supervision of the Prosecutor General’s Office, has initiated an official investigation.

In his defense, Minister Blažek [stated](https://www.seznamzpravy.cz/clanek/domaci-politika-blazek-nevidi-nic-neetickevo-na-prijati-bitcoinu-od-odsuzhenogo-muzha-277856) that the ministry had never previously received such donations; however, he declined to elaborate on their reasons:

«Why can’t a convict donate something to the state, perhaps as a form of repentance?»

He also emphasized that he has no ethical concerns about accepting the donation.

«If it were proven in the future that the funds had a criminal origin, the state would confiscate them anyway, and they would be included in the budget. Ethically, I had nothing to worry about,» the minister added.

It’s worth noting that in early April, the Czech police [seized](https://denikn.cz/1769458/nejsem-to-schopen-objasnit-proc-si-policie-mysli-ze-darcovy-bitcoiny-pochazi-z-trestne-cinnosti/?ref=tit1?ref=mpm) an additional 50 BTC from Jiříkovský, valued at about 117 million crowns, which he had exchanged via the payment service [IP wBTCb solutions](https://czechdigitalsolutions.cz/en/organizations/ip-wbtcb-solutions-sro/). According to the Financial Analytical Office, this transaction may have represented the legalization of illegal proceeds.

On May 30, amidst growing pressure, Blažek resigned. He denied any wrongdoing and explained his decision as an effort to protect the government’s reputation ahead of the upcoming parliamentary elections.

«I am not aware of any illegal activities. However, I do not want to harm the reputation of the government or the ruling coalition,» the official stated.

Later, Blažek indicated that the donor had not received any reciprocal services. According to [journalistic sources](https://www.marigold.cz/item/jirikovsky-blazek-sheep-nucleus/), Jiříkovský’s equipment was returned to him back in January 2025, rendering his March donation «meaningless» and potentially an attempt to launder funds.

Eva Dekrua has been appointed as the new Minister of Justice in the Czech Republic. She promised to initiate and oversee an independent audit of the ministry’s actions regarding the cryptocurrency sale.

On June 17, during a plenary session of the lower house addressing the vote of no confidence for Prime Minister Petr Fiala’s government, ANO Chair Andrei Babiš called the handling of Jiříkovský’s bitcoins «the biggest scandal in the history of the Czech Republic.»

«This was an organized act aimed at laundering dirty money. The operation was planned by the Minister of Justice, and the Minister of Finance was involved. The Prime Minister politically shielded it,» he asserted.

Nevertheless, on June 18, the opposition fell short by seven votes (94 out of the required 101) to oust the government.

This confrontation threatens to have far-reaching consequences and could [impact](https://www.economist.com/europe/2025/06/26/a-bitcoin-scandal-is-good-news-for-the-czech-donald-trump) the results of the parliamentary elections set for October 3-4.

The key accusation is that the 468 BTC donated by Tomáš Jiříkovský may have been given in exchange for the inaction of various ministries under the Ministry of Justice regarding the seizure of remaining crypto assets in his possession.

«Under criminal procedure standards, the state can only keep equipment if there is proof that it stores access to the bitcoins and that these assets are linked to criminal activity. Mere assumptions are insufficient,» stated the lawyer.

She posited that Jiříkovský could have gained access to his bitcoin wallets in the coming months. If law enforcement can demonstrate that the donation to the Ministry was made as a guarantee against the confiscation of remaining assets, it could formally fall under the legalization of criminally obtained funds.

«There is no mechanism in Czech law for executing such a deal where the state agrees to accept only part of the criminally acquired property in exchange for foregoing attempts to seize the remainder. Within the framework of a plea agreement, one can achieve a reduction or deferral of punishment as well as installment payments of fines. However, property obtained through crime is always fully confiscated. Moreover, the court must approve the plea agreement,» concludes Basaley.

Thus, in this case, the Ministry of Justice is presumably exceeding permissible legal procedures.

«If the prosecution’s suspicions are proven, there will be serious grounds for initiating a criminal case concerning the legalization of funds obtained illegally,» the expert concluded.

The Czech case, where cryptocurrency becomes involved in corruption schemes, is by no means unique.

In October 2024, former Moscow investigator Marat Tambiev was sentenced to 16 years in a penal colony and fined 500 million rubles for accepting bribes in cryptocurrencies.

According to the case materials, he received over 2718 BTC (7.3 billion rubles at that time) and $1.5 million from members of the Infraud Organization hacking group in exchange for promises not to arrest their assets. Access codes to two accounts were found in a folder labeled «Pension» on the defendant’s computer.

In July 2025, Rosfinmonitoring, the FSB, and the Ministry of Internal Affairs announced the development of a [methodology](https://forklog.com/news/bitkoin-korruptsiyu-v-rf-otsenili-na-urovne-13-5-mlrd-rublej) that will enable commercial banks to identify corruption schemes involving cryptocurrencies.

The agencies noted an increase in the number of cryptocurrency transactions tied to corruption and assessed their current volume at 13.5 billion rubles based on identified cases.

In November 2024, Ukraine’s High Anti-Corruption Court tried the people’s deputy Andrei Odarchenko in absentia, sentencing him to eight years in prison and confiscating property for attempting to bribe in bitcoins.

According to the prosecution, in August 2023, the MP offered $50,000 in bitcoins to Mustafa Nayem, who held the position of Head of the State Agency for Restoration, for assistance in obtaining funds from the crisis recovery fund due to armed aggression by the Russian Federation.

The deputy planned to use these funds for repairs at the Kharkiv State Biotechnology University, where he served as rector.

The court barred Odarchenko from holding leadership positions in governmental bodies for three years. 0.39 BTC was seized for the state.

In the same month in China, former first Director of Development for the CBDC at the People’s Bank Yao Qian was [expelled](https://forklog.com/news/v-kitae-kriptopapu-uvolili-posle-obvineniya-v-korruptsii) from the Communist Party over corruption allegations involving cryptocurrencies.

Upon investigation, he was accused of falsely presenting himself as an expert in financial technologies, supporting technology service providers, and abusing his powers.

The Bitcoin scandal in the Czech Republic has exposed vulnerabilities in the management of digital assets in the public sector. It highlights the risks of integrating cryptocurrencies into public institutions without proper regulatory foresight, the necessary literacy among officials, and transparency in transactions.

The country recently adopted [MiCA](https://forklog.com/cryptorium/chto-takoe-markets-in-crypto-assets-mica), which exempted bitcoin holders from [capital gains tax](https://forklog.com/news/chehiya-osvobodila-chast-bitkoin-hodlerov-ot-nalogov). The central bank is exploring the possibility of [creating a cryptocurrency reserve](https://forklog.com/news/nravitsya-pribylnost-glava-natsbanka-chehii-predlozhil-vlozhit-milliardy-evro-v-bitkoin-rezerv).

Lawyer Eliza-Tatiana Baseley emphasized that MiCA does not change the foundations of national criminal law and the principles of confiscation: criminally-derived assets still face full forfeiture, and without evidence linking specific assets to criminal activity, equipment and wallets are returned to their owner.

Nonetheless, she believes that practical tools for identifying, freezing, and transferring crypto assets will improve significantly through enhanced information exchange coordination and oversight.

The expert also suggested that the donation controversy and the ensuing political turmoil could create additional negative sentiment surrounding cryptocurrencies and slow the advancement of the idea of forming a bitcoin reserve.

«It can be assumed that the idea of creating a crypto reserve will remain in ‘waiting mode’ until the media focus shifts after the elections and more stringent regulatory practices are established,» she added.

Similar ethical debates have recently flared in Argentina regarding President Javier Milei’s involvement in [advertising the Libra token](https://forklog.com/news/antikorruptsionnoe-agentstvo-opravdalo-prezidenta-argentiny-v-skandale-s-libra), as well as in the United States concerning Donald Trump’s [cryptocurrency initiatives](https://forklog.com/news/kriptoproekty-trampa-proveryat-na-predmet-konflikta-interesov).

The Czech scandal may act as a trigger for tightening government protocols on handling digital assets and for more thorough scrutiny of incoming donations.