Archive for May 29, 2018

Germany Benefits from Digital Crime Cases

It’s not unusual, crime agencies and police forces across the world finance some of their activities using seized assets. Wherever you live, you may have come across police auctions or heard about places where stolen goods are sold off. After all if these assets can’t be repatriated with their rightful owners then why not use it to fund police forces.

This of course has been more difficult in respect of digital crime, as often the assets are difficult to find never mind seize especially if the crimes are committed across international borders. However there’s now an unlikely source of funds that seems to be present whenever a digital crime is solved – huge caches of digital currency.

Most cyber criminals are pretty clever at covering their tracks and maintaining a high level of secrecy. This usually involves using rotating and residential proxies to hide their location. In addition, there’s now another common component to keep themselves secure using a crypto currency to process any payments used in their crimes. Although it’s difficult to trace the owners sometimes it’s a simpler option to seize the digital assets when a crime is solved.

The German authorities have just made around $14 million through the sale of Bitcoin and many other cryptocurrencies which they seized in criminal investigations.

This was simply an emergency sale, according to a Monday report in the Tagesspiegel newspaper, since the Bavarian justice treasury was concerned about the wild changes in cryptocurrency values. Emergency sales are normally generally kept back for perishable goods, such as food, or goods that generally depreciate in valuation, for example cars.

The cryptocurrencies which were sold off– 1,312 Bitcoins, 1,399 Bitcoin Cash tokens, 1,312 Bitcoin Gold tokens and 220 Ether– were generally mostly confiscated in a clampdown on a system called, which was unlawfully selling copyrighted ebooks and audiobooks at very low prices. The website was confiscated and blocked out last June, its own operators were arrested and its resources went into a fund that is typically used for police resourcing.

The sale happened over a number of months, in a succession of more than 1,600 transactions on a German cryptocurrency forex platform. According to Der Tagesspiegel, the receipts totalled just over EUR12 million ($ 13.9 million.).

The selloff began in late February, when the rate of one Bitcoin had actually crashed from its December highs– almost $20,000– to around $11,400. Over the course of the sale, the rate dipped below $7,000 and cleared $9,000 once more. Since then, it has fallen once more to a price of $7,230, so the polices’ timing appears pretty good for now, unless Bitcoin makes a surprising rebound in the future.

This was actually a record-breaking transaction of seized possessions within Germany, but American powers have already been generating much more money off confiscated cryptocurrencies for some time. The Justice Department got $48 million in October last year from the sale of Bitcoins which stemmed from Ross “Dread Pirate Roberts” Ulbricht. The sale in fact took place a couple years earlier, when one Bitcoin was actually worth a mere $330 or so, but Ulbricht, the owner of the Silk Road online drug market, had actually disputed the legality of the forfeiture and took a while to drop his claim.

Further Reading: – Using Sneaker Proxies for Profit.

Can a Football Tournament Transform the Russian Economy

There are of course only a few sporting events which have the potential to affect an economy as large as Russia’s.  Indeed the Olympics and the World Cup are probably the only two that come even close.  Despite some incredible sounding predictions it still seems unlikely that even one of the world’s biggest sporting events has the capacity to make even a small impact.

There’s no doubt that Russia’s economy needs a boost and it needs one fast. President Putin has pretty much been allowed to be flexible on the democratic process on the understanding that he brings prosperity and jobs to the Russian economy.  That has not been easy over the last  few years, with a huge fall in oil prices and the ongoing sanctions placed as a result of Russia’s international policies.

The World Cup has been seen by many Russians as a chance to start integrating Russia back into the world economic marketplace where it’s become increasingly isolated due to the Ukraine and Syria issues. The World cup is huge and brings plenty of potential in tourism and other related effects.  The last report published actually estimated that there could be a total impact of around $30 billion to the Russian economy.

This sounds a staggering amount but just to clarify the report suggests that this is the measured impact on GDP over the 10 years 2013 to 2023.  This is roughly the time scale of the project ranging from the initial infrastructure projects to the ongoing impact from these investments after the tournament has finished.

Of course, hosting the World cup isn’t cheap, indeed the Russian state has probably spend around $11 billion on the various infrastructure needed. However much of this spending has revolved around roads, transport links and stadiums which would have been built anyway even if the tournament hadn’t been held here.

Confusion like this is why these economic figures about sporting events are always so hotly disputed.  It’s extremely difficult to isolate costs and resulting benefits from the actual event especially when it comes to things like transport links.  Some of these investments can genuinely invigorate areas especially in isolated and neglected regions.  The problem is that economic benefits can easily be attributed to the event over this long time scale even if only some of this is genuinely attributable.

The easiest major benefit to measure is of course the tourism that the actual event brings.  There has been some trepidation from many football fans from attending this event, with rumours of Russian hooligans and worries about policing.  It’s important that tourists have a great time and these impacts are minimal as they can also have a long term effect on Russian tourism well after the event has finished.

Obviously many people will not risk travelling to the country for a variety of reasons, however football fans are usually extremely hardy and will support their teams whatever the costs.  Many will prefer to enjoy the tournament from home and digital streaming, perhaps watching Match of the Day stream across the internet. Yet the tournament will almost certainly be a sell out with transport links from European countries fairly reliable and inexpensive.

Russia has of course, already invested heavily in another sporting event this decade in the form of the 2014 Winter Olympics.   Spending on that was reported as being over $50 billion which seems incredible, and if true made them by far the most expensive Winter games in history.

Ultimately though, these events are worth even more than money to the President Putin – they are a way of promoting national prestige.  With Russia facing many challenges abroad with their overseas policy these sporting events are an ideal way of promoting Russia on the international stage.

Further Reading: