A court in Ireland ruled that the cryptocurrency seized from a convicted dark web vendor constituted the “proceeds of crime.” The ruling allowed the government to keep the dark web vendor’s cryptocurrency they had seized during a raid in 2014.
In late 2014, the gardaí raided the Neil Mannion’s home in Dublin. Investigators had learned that the 37-year-old had been selling various illegal substances on a number of dark web markets. After his arrest, Mannion admitted selling drugs in exchange for a six year prison sentence. As a part of the sentence, Mannion had to forfeit his earnings from dark web drug sales. After the government had seized and taken possession of his cash, Bitcoin, and other valuables, authorities closed the case. Later, law enforcement seized more than $28,000 in Ethereum at a time when Ethereum was not considered a proceed of crime. A judge ruled in favor of the government, denying that the former dark web vendor’s rights had been violated.
In October 2014, law enforcement in Ireland raided the personal and business properties of Neil Mannion and Richard O’Connor in Dublin. On the premises, police seized more than $160,000 worth of amphetamine, LSD, cannabis, alprazolam, and various other substances. The United States Federal Bureau of Investigation and Europol assisted law enforcement in Ireland with an investigation into a prolific dark web vendor. The vendor had established a reputation on Silk Road, Agora, and other markets. The vendor sold under the usernames, “Hulkster” or “TheHulkster.”
During the raids, authorities also found computers with cryptocurrency wallets stored on them, postage labels, various types of plastic and paper bags, different types of envelopes, and a vacuum sealing machine. Mannion eventually helped authorities understand the crimes they had accused him of committing. He showed them the dark web marketplaces and showed them the account he had been using to sell drugs to customers around the globe. Mannion admitted that he had been selling drugs under the Hulkster usernames on multiple marketplaces. He admitted that O’Connor had not played the same role he had played in the operation. O’Connor had simply followed the orders of someone who had offered him a flat payment every month in exchange for the handling of package deliveries and handling package drop-offs.
Both defendants pleaded guilty to drug trafficking crimes in 2015. In December 2015, the Dublin Circuit Criminal Court sentenced Mannion to six years in prison and sentenced O’Connor to three years in prison. Not long after the court issued Mannion’s sentence, he appealed the sentence at the Court of Appeal and lost the appeal. The presiding judge ruled that the Dublin Circuit Criminal Court had appropriately sentenced Mannion. Mannion had argued that the court should have sentenced him to a sentence as short as his co-defendant’s sentence. The court said that O’Connor’s sentence was fair and that Mannion’s sentence was longer since Mannion had controlled the entire operation. Not long after the Court of Appeal had denied Mannion’s appeal, the Criminal Assets Bureau (CAB) pursued Mannion in court to recover Mannion’s illegally obtained assets. The CAB filed documents requesting the bank accounts, credit cards, prepaid debit cards, and the Bitcoin in a number of Bitcoin wallets and exchanges as the proceeds of crime. They settled this case in February 2016. Months later, in July of the same year, the CAB went after more than $26,000 in Ethereum that Mannion had been keeping in an exchange wallet.
The CAB had known about the Ethereum before they filed for the forfeiture of Mannion’s other assets. But Ethereum, at the time, was not officially considered a virtual currency. Authorities have since reclassified Ethereum. Although she called the case groundbreaking, Ms. Justice Stewart said that the CAB had the authority to seize Mannion’s Ethereum.