It’s not Germany that’s selling bitcoins. It’s one of its states and it has no choice.

• It wasn’t Germany that sold millions of dollars worth of bitcoins, but a small German state called Saxony.

• The state confiscated nearly 50,000 BTC in January and sold its holdings in line with standard practice for assets seized during criminal investigations, an expert said.

For several days, media around the world have been reporting on Germany’s sale of hundreds of millions of dollars worth of bitcoins {{BTC}} and the resulting distress in the markets and massive sell-offs in cryptocurrency prices.

First of all, it is not Germany itself that is selling the cryptocurrency. It is a small state in the east of the country, Saxony.

Second, even though cryptocurrency fans have criticized the decision to dump so much of their beloved bitcoin, Saxony has no choice.

Earlier this year, the State Criminal Police Office (known by its German acronym LKA) 49,857 bitcoins seized (worth nearly $3 billion at current prices) of the operator of Film2k.toSaxony website found guilty of money laundering and other illegal activities.

About a week ago, a crypto wallet owned by Germany’s Federal Criminal Police Office (BKA) began transferring thousands of BTC to exchanges such as Kraken, Coinbase, and Bitstamp, signaling its intention to sell them. The wallet’s bitcoin holdings have since decreased to 23,788.

The reactions on social networks were strong.

“Germany selling all its #Bitcoin will be considered one of the stupidest things its politicians have ever done,” one X user said. wrote.

“The German government officials are real idiots,” another said.

But what is happening in Germany is not a bad investment strategy: it is simply standard procedure that applies to assets confiscated in criminal investigations, one expert said.

“The Saxony General Prosecutor’s Office is responsible for liquidating confiscated assets, and this sale is hardly surprising,” said Dr. Lennart Ante, co-founder and CEO of the Germany-based Blockchain Research Lab. “Seized assets are always liquidated within a set period of time. This is a routine business process, albeit on a larger scale than normal.”

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The reason why the wallet belongs to the BKA (Federal Police Office) and not to Saxony itself is probably because the police agency was involved in the initial investigation and had the technical knowledge to handle such a large amount of bitcoins, he argued. However, the BKA has no decision-making power and acts only on instructions from the state.

In most cases, confiscated property can only be transferred or sold and the proceeds paid into the state budget once a judge rules that the state is allowed to do so, which is not the case in this particular situation. However, states can request to initiate an emergency sale, which could be issued if the property is likely to lose value quickly or is difficult to store, for example, Ante explained.

“In the case of bitcoin, it could at least be argued on the basis of volatility,” he said.

There is, however, evidence that Saxony is trying to sell too many bitcoins at once. On Tuesday, He received $200 million in return for some tradesindicating that there was not enough demand to purchase such a huge amount.

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