Bitcoin Vanishes Amid Legal Battle
A recent Puerto Rico District Court order has once again raised the issue of cryptocurrency ownership. Here’s the story:
Juan Carlos Reynoso, convicted of drug trafficking, was ordered to forfeit 119.65 BTC (stored at bc1q...dgac) to a government-controlled address (bc1q...er2h). But on the very day of the court order, the Bitcoins were moved - leaving the government empty-handed.
The court’s response?
- Held Reynoso in contempt of court,
- Demanded he return the funds immediately,
- Slapped a $10,000 daily fine until compliance.
But critical questions remain unanswered:
- Did Reynoso actually move the Bitcoins himself?
- Does he even have access to the addresses where the funds now reside?
If the answer to both is “no”, the court’s penalties - fining someone for failing the impossible - seem unjust. Notably, the ruling offers no proof Reynoso controlled the transfer. Instead, it shifts the burden: “Prove your keys were compromised.”
At rabbit.io, we specialize in cryptocurrency exchange. Personally, I closely follow the crypto business, and I know very well that failing to share private keys with trusted individuals in case something happens to you is extremely reckless. History shows the risks of poor planning:
- Quadriga collapsed in 2019 after its CEO took keys to the grave.
- OKEx froze withdrawals in 2020 when a founder went “missing.”
Reynoso also operated a cryptocurrency business of sorts - albeit an illegal one. In my view, there’s a high probability that third parties moved the Bitcoin once Reynoso faced legal jeopardy. Even miners had more power to block the transfer than Reynoso himself!
