German Authorities May Have Left $5B in Movie2K Bitcoin Unclaimed in 100+ Wallets

German authorities may have missed seizing nearly $5 billion in Bitcoin tied to the Movie2K movie piracy site, according to findings by blockchain analytics firm Arkham. The firm identified 45,060 BTC, valued at approximately $4.99 billion based on current Bitcoin prices, still inactive in over 100 wallets connected to the defunct site. This discovery raises questions about whether German law enforcement fully accounted for the site’s illicit digital assets. Arkham noted that the Bitcoin has not moved since 2019 and is likely under the control of the Movie2K operators.

The oversight emerged after German authorities conducted a record-breaking seizure of 49,858 BTC from Movie2K in January 2024. These funds were voluntarily handed over by two suspects during the investigation and later sold between June and July 2024 at an average price of $57,900 per BTC, generating $2.8 billion in revenue for the government. This timing proved costly, as Bitcoin prices surged months later. By mid-November 2024, the cryptocurrency had risen to over $90,000, and by mid-August 2025, it had reached a peak of $124,128. The funds that were sold would have been worth over $5 billion at that peak, prompting criticism over the decision to liquidate the holdings when it did.

German prosecutors defended the rapid sale of the seized Bitcoin, citing legal requirements to liquidate volatile assets before they risked losing 10% of their value. However, the recent findings by Arkham highlight the potential for additional gains had the government held onto the 45,060 BTC identified in the report. The challenge for authorities now is proving that the newly identified Bitcoin is also tied to Movie2K’s illicit activities. Under German law, the government must demonstrate in court that the funds are of criminal origin before it can legally seize them.

The report also underscores the complexity of recovering the dormant Bitcoin. Authorities would need to identify and gain control of the over 100 wallets associated with the funds, a task complicated by the lack of access to the private keys required to move the assets. Arkham’s analysis suggests that the wallets are still under the control of the original operators, though their inactivity since 2019 indicates a lack of immediate intent to transfer or spend the Bitcoin.

This situation has reignited debates about Germany’s approach to managing seized cryptocurrencies. Some lawmakers and Bitcoin advocates argue that holding onto large reserves of seized Bitcoin could yield greater long-term gains compared to immediate liquidation. Proponents of a sovereign Bitcoin reserve strategy suggest that Germany could follow the lead of countries like El Salvador, which has integrated Bitcoin into its financial system. Critics, however, caution against treating Bitcoin as a reserve asset due to its volatility, with figures like Bundesbank President Joachim Nagel comparing it to historical financial bubbles like the Tulip Mania of the 1600s.

The potential recovery of the $5 billion in dormant Bitcoin could also have broader implications for the cryptocurrency market. Previous sales by German authorities had already triggered noticeable volatility in mid-2024, and any attempt to liquidate an additional 45,000 BTC could lead to similar market reactions. This highlights the need for careful planning and coordination in handling large-scale Bitcoin seizures, particularly as the market continues to evolve and regulatory frameworks adjust.

The debate over how governments should manage seized digital assets is far from settled. While the German case offers a cautionary tale about the risks of timing and legal constraints, it also underscores the growing importance of Bitcoin in both criminal and legitimate financial ecosystems. As more countries grapple with the challenges of digital asset regulation, the Movie2K case serves as a key example of how traditional law enforcement methods may need to adapt to the unique nature of cryptocurrencies.