Earlier this week, Lithuania's tax service, the Lithuanian State Tax Inspectorate, added $7.6 million dollars to the state budget through the sale of cryptocurrencies seized in criminal investigations. 

The occasion marked the first time that the Lithuanian government liquidated confiscated cryptocurrencies. In doing so, the country joined the growing number of jurisdictions worldwide that have auctioned off or sold cryptos obtained by the long arm of the law. 

However, unlike the United States Federal Marshals, which netted $37 million at auction from confiscated crypto last February, the STI opted to sell the crypto through an exchange. According to Linas Rajackas, CEO of Vilnius-based crypto startup Kaiserex, this seemed to work out in the regulator's favor:

"We managed to sell Bitcoin above average that day's price, no auction would have achieved that. STI spent less than 0.2% from the total received amount (6.4 million euro) on exchange fees, legal contracts and crypto transaction services. So it was as efficient as it can possibly get.”

The STI chose Kaiserex as a technology partner for selling the cryptocurrency via a public tender. STI head Edita Janušienė told Cointelegraph:

“The goal of the STI was to convert the cryptocurrency into euros as soon as possible. Therefore, first of all, a decision was made to announce a public tender in search of a national supplier. Four Lithuanian companies participated in the tender, which was won by Kaiserex.”

According to Janušienė, the crypto sale started on Nov. 18 and took nearly 24 hours to complete, with the STI eventually adding more than 6.4 million euro to the state budget. The rypto was initially confiscated by a local court. While Janušienė confirmed the partnership Kaiserex, she did not elaborate as to why the regulator shied away from the auction model.

Rajackas speculated that “[the STI] have consulted with professionals in the field and it was obvious that selling at large OTC desks would be much more profitable than doing it in an auction. Auction in comparison is a very bad choice, because you can not know in advance a good day to sell, set the price or back off.”

Kaiserex completed the sale through an over-the-counter desk at a major cryptocurrency exchange. Rajackas said, “I can not tell the OTC desk that we used, what I can tell is that it is in the top five crypto exchanges worldwide.” At publishing time, the top five crypto exchanges on CoinMarketCap are Binance, Huobi Global, Coinbase Pro, Kraken and Bithumb.

The sale involved about 337 Bitcoin (BTC), 360 Ether (ETH) and nearly 12,000 Monero (XMR). Each cryptocurrency was sold at a market price on the day of the trade, with one BTC priced at 15,100 euros ($17,900), one ETH at 400 euros ($480), and one XMR at 99.6 euro ($119).

The bull market, in which Bitcoin briefly broke the $19,000 threshold, was one reason the sale was so profitable, according to Rajackas. “This made it possible to sell the available cryptocurrency at record prices and extract the maximum amount of euros,” Rajackas said, adding:

“My opinion would be that if a government wants to have exposure in crypto it should be done by our finance ministry, which plans and takes care of government's assets. STI deals with taxes and realizing confiscated assets, they have no business in speculation or holding something as an investment.”

Kaiserex is a cryptocurrency exchange acting as a broker connected to more than 40 crypto exchanges and multiple OTC desks. Rajackas, who owns 100% of the company shares, says that Kaiserex is not listed on major crypto websites like CMC because it does not have internal order books and relies on other exchanges for liquidity.

The company reportedly plans to continue working with the Lithuanian institutions on similar cryptocurrency deals and support the Lithuanian central bank in its digital currency efforts.