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Tales from the Crypto: Irish drug baron loses £46mln Bitcoin stash

A look at some recent major events and movements in crypto markets and the wider blockchain industry

Bitcoin

This month’s Tales from the Crypto (TFTC) brings something of a lesson in Bitcoin storage. If you’re going to write down your account details, make sure they can’t get disposed of at any moment.

It is a lesson learned by Irish drug dealer Clifton Collins, who stashed an A4 piece of paper listing the details of several accounts containing Bitcoin worth around £46mln in a fishing rod case.

However, following his arrest and subsequent imprisonment for cannabis possession in 2017, Collins' landlord, from whom he was renting a house in County Galway, threw out his belongings including the fishing rod case containing the account codes.

Without the codes, the accounts containing the loot cannot be accessed, meaning one of the largest hauls for Ireland’s Criminal Assets Bureau is impossible for the authorities to retrieve.

For his part, Collins appears to have come to terms with the loss of the fortune, telling police that it is a punishment for his own stupidity.

Action zero

Speaking of crypto-related legal entanglements, action hero star Steven Seagal found himself in hot water this month after he was hit with a US$300,000 (£256,000) fine by US regulators for promoting an initial coin offering (ICO) on social media without disclosing that he was being paid for his services.

The actor and aikido master fell foul of the US Securities and Exchange Commission (SEC) when in 2018 he promoted an ICO for Bitcoiin2Gen (B2G), which offered digital tokens that were to be issued on the Ethereum blockchain.

However, what Seagal failed to tell potential investors was that B2G had promised him around US$250,000 (£194,000) in cash and another US$750,000 (£583,000) in company tokens as payment for the promotion.

As a result, the SEC found that Seagal had violated federal anti-touting provisions, although the actor managed to settle with the regulator to the tune of US$157,000 (£122,000) without admitting or denying the allegations.

"These investors were entitled to know about payments Seagal received or was promised to endorse this investment so they could decide whether he may be biased," said Kristina Littman, chief of the SEC enforcement division’s cyber unit.

"Celebrities are not allowed to use their social media influence to tout securities without appropriately disclosing their compensation", she added.

However, with ICOs having been wildly discredited after a number of scams connected to their unregulated nature, the potential dent to Seagal’s reputation may have been punishment enough.

Dead Man’s crypto

In a previous TFTC, it was highlighted that legal problems could arise around what happens to people’s cryptocurrency holdings when they die, and it seems that experts are currently exploring a solution for when a crypto investor slips off the mortal coil.

In a workshop in London earlier this month, a number of developers began exploring the possibility of developing a crypto version of the ‘dead man’s button’, a form of fail-safe designed to activate if the operator of a machine becomes dead or incapacitated.

One concept explored at the workshop was the use of a virtual ‘button’ which every week would need to be activated by the user to confirm they were still alive.

If the button was not pressed, the program will assume the user is dead or otherwise incapacitated and issue a pre-determined ‘secret’ designed to allow access to the crypto by the recipients.

However, Pamela Morgan, a crypto inheritance lawyer, told CoinDesk that the use of a dead man’s button “fail[s] to solve the complex and multidisciplinary challenges of crypto asset inheritance distribution”, and that relying on such systems “for something as important as inheritance is likely to cause catastrophic loss”.

One silver lining, she said, was that the technology could help crypto users start to think about who to bequeath their crypto investments to after they have passed.

"If adding a dead man's switch makes more people actually do inheritance planning for their bitcoin, then I'm all for it because so few people actually do anything", Morgan said.

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