Czech Justice Minister Resigns Over $45M Bitcoin Donation Scandal

Czech Justice Minister Pavel Blazek has stepped down following a scandal over his ministry’s sale of nearly $45 million worth of Bitcoin donated by a convicted drug trafficker.

The controversy erupted on May 28 after the ministry posted on X that it had raised close to 1 billion Czech koruna (approximately $45 million) by auctioning off nearly 500 Bitcoin (BTC).

The funds were earmarked for projects such as digitizing the justice system, combating drug use in prisons, and improving housing for prison staff.

However, Czech news outlet Denik N revealed that the cryptocurrency came from Tomas Jirikovsky, a convicted criminal behind Sheep Marketplace, a dark web platform notorious for selling illegal goods.

Related: Czech to explore new assets, skips Bitcoin as $7B BTC reserve faces criticism

Czech minister accepts Bitcoin donation

In March, Jirikovsky’s lawyer approached Blazek, offering one-third of the Bitcoin as a donation to the Justice Ministry. Blazek accepted without probing the cryptocurrency’s origins.

“I have no way to investigate the matter, and I wasn’t interested so many years after the case,” he said at a Thursday press conference, suggesting the donation reflected Jirikovsky’s desire to “repent.”

However, public outcry grew over the transaction’s lack of due diligence. Opposition leaders labeled it a scandal, and police have now launched an investigation into the Bitcoin’s origins.

Jirikovsky was sentenced in 2017 for embezzlement, drug trafficking, and weapons violations. Since being released from prison in 2021, he has been seeking to reclaim 1,500 Bitcoin seized at the time of his arrest.

During his trial, Czech authorities suspected the funds were linked to Nucleus, another dark web marketplace shuttered just after Jirikovsky’s arrest. Despite this, he maintained the Bitcoin was acquired legally, which allowed him to retain it after serving his sentence.

Related: Czech National Bank governor to propose $7B Bitcoin reserve plan

Blazek resigns after mounting pressure

Facing mounting pressure and with legislative elections just four months away, Prime Minister Petr Fiala distanced himself from Blazek, a long-time political ally.

Subsequently, Blazek resigned on May 30. “I am not aware of any illegal action. However, I do not wish to damage the reputation of the government or the governing association,” he said in his statement.

On Feb. 6, Czech President Petr Pavel signed a “landmark” cryptocurrency legislation into law, providing Czechia with regulatory clarity on digital assets that are aligned with broader European Union laws. 

The new legislation simplifies crypto tax rules and implements the EU’s Markets in Crypto-Assets (MiCA) regulation “in a way that supports innovation and development of the entire industry.”

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