2025 Czech government Bitcoin scandal

Overview

The 2025 Czech government Bitcoin scandal was a scandal in the Czech Republic that involved a donation of 468 Bitcoins to the country's Ministry of Justice. The Czech daily newspaper, Deník N, reported that the Minister of Justice, Pavel Blažek, accepted the donation from Tomáš Jiřikovský, which was worth one billion Czech koruna at the time (approximately $45,000,000 USD). Jiřikovský had previously been convicted of embezzlement, drug trafficking, and illegal possession of weapons in 2017. After Jiřikovský's early release from prison in 2021, he attempted to recover the Bitcoin wallets. In 2023, he hired a lawyer acquainted with the Justice Minister, hoping to recover the seized devices containing the wallets. Deník N reported the suspicious bitcoin transfer to the Czech Ministry of Justice in 2025. The Ministry was notified by the donor's lawyer on 26 May 2025, that the bitcoin had been seized. Pavel Blažek, a member of the Civic Democratic Party, subsequently resigned on 31 May 2025. Blažek stated that he approved the donation without verifying its origin but denied that his actions were illegal. The donation was not returned to Jiříkovský. On 18 June 2025, 98 of the 192 members of the Parliament voted to oppose a no-confidence motion against the government of Prime Minister Petr Fiala, which was filed by the opposition party ANO 2011. This was the fourth no-confidence vote survived by the Fiala government since entering power in 2021.

Background

The controversy concerns a donation made to the Czech Ministry of Justice by Tomáš Jiříkovský, a convicted criminal who operated the dark web marketplace known as the Sheep Marketplace, which was used for illegal transactions. Jiříkovský was convicted in 2017 for offenses including embezzlement, drug trafficking, and illegal arms possession. After his early release from prison in 2021, he sought to reclaim the bitcoin that had been seized during his arrest. Later, he donated 30% of these assets to the Ministry of Justice.

Public disclosure

The case was uncovered by Zdislava Pokorná from Deník N, who published an article on 28 May 2025 listing Tomáš Jiřikovský among the wealthiest Czechs, with an estimated net worth of approximately two billion Czech koruna (CZK). Sheep Marketplace, operated by Jiřikovský, used bitcoin as currency to keep vendors and consumers pseudonymous. Jiřikovský earned substantial profits through commissions of each transaction. While running the marketplace, he was defrauded of 5,400 bitcoins by Nathan Gibson and Sean Mackert, who exploited a vulnerability in the marketplace's source code. In December 2013, they managed to steal nearly 841 bitcoins from buyers and sellers on the platform, the equivalent of over 16 million Czech koruna at that time, or around 22–24 million Czech koruna in 2025.

Jiřikovský's sentence

In 2017, a court sentenced Jiřikovský to nine years in prison for embezzlement, drug trafficking, and illegal possession of firearms. He was released for his good behavior after serving half of his sentence (specifically four years, seven months, and seven days). On 19 November 2020, Břeclav District Court granted his request for conditional release, establishing a six-year probation period ending in November 2026.

Return of computing equipment

Since 2021, legal proceedings have been underway regarding seized electronics. Initially, the Krajský soud v Brně and the Vrchní soud v Olomouci ruled that the hardware should be returned, but only after its contents were wiped. This was intended to prevent Jiřikovský from regaining access to remaining bitcoins through the data on the devices. However, in 2023, the Supreme Court of the Czech Republic overturned this, ruling that the data should not be deleted. The court held that if it cannot be proven beyond doubt that the computers contained bitcoins obtained through suspicious means, Jiřikovský is entitled to the return of the devices in their original state. In January 2025, Krajský soud v Brně issued a final ruling to return the main portion of the hardware to Jiřikovský without formatting it, after Jiřikovský claimed he had forgotten the passwords to the computers. The court ordered the wiping of only three laptops and one data storage device (an external drive), where experts determined he could have gained access to crypto-wallets. Eight encrypted devices were returned intact, including two encrypted computers, three phones, and three tablets. A total of approximately 30 devices were returned. Upon the return of the hardware, Jiřikovský also regained access to cryptocurrency wallets containing assets other than bitcoin. Specifically, he accessed Bitcoin Cash valued at 16 million CZK at the time. The official notary record of the bitcoin handover contained no mention of these alternative cryptocurrencies.

Bitcoin donation agreement

The initial correspondence from attorney Kárim Titz, containing an offer of bitcoins, reached the Ministry in mid-August 2023. It was received by Deputy Minister Antonín Stanislav (ODS), who subsequently resigned in the spring of 2024 following a series of unrelated allegations. The attorney proposed the transfer of high-value bitcoins to the Czech Republic on the condition that the state return seized hardware to Jiřikovský. Titz argued that Jiřikovský had already completed his sentence for operating the illegal darknet market Sheep Marketplace, his assets had been forfeited, and the police had failed to establish that the bitcoins stored on his computer were proceeds of crime (an argument later echoed by Minister Blažek). At that time, law enforcement was unaware of any connection between Jiřikovský and the Nucleus marketplace. In mid-December 2024, Karel Dvořák, the Political Deputy to Minister Blažek and Vice-Chairman of Mayors and Independents (STAN) movement, received an official email as part of his duties at the Ministry of Justice addressing a previously submitted offer by attorney Titz regarding a bitcoin donation to the state. The response from the Deputy, and by extension the Minister, stated that under the law, the hardware containing the cryptocurrencies could only be released to Jiřikovský by a court, and that the Ministry is prohibited from interfering with judicial proceedings. As early as January 2025, Titz suggested in an email to Ministry of the Interior employees that the funds in question might not be entirely legitimate. Legal experts from the Ministry of Finance subsequently drafted a formal warning on 12 February 2025 in response to documents received from the Ministry of Justice regarding a proposed donation agreement with Jiřikovský. The legal opinion cautioned that the donation could represent a moral hazard, that the bitcoins might originate from criminal activity, and that the contract could serve as a pretext for money laundering. However, then-Minister of Finance Zbyněk Stanjura did not review the warning until 25 March—three weeks after the contract with Jiřikovský had been signed—as the documents were intended as briefing materials for a scheduled meeting with Minister Blažek. The three-page legal warning was not delivered to Stanjura in a timely manner by his chief of staff, Filip Benda. Benda declined to comment on why he waited 40 days to inform the Minister about the donation. His brother, Marek Benda, later characterized Filip Benda's involvement in the affair as a mistake. Despite pressure from the parliamentary opposition and government MPs from the STAN party to dismiss him, Stanjura retained Benda in his position. In March 2025, attorney Kárim Titz proposed an agreement to the Ministry of Justice whereby the Ministry would receive 30% of the contents of cryptocurrency wallet upon its joint opening. Titz subsequently confirmed that Jiřikovský's objective was to utilize the donation as tax deduction. Titz further asserted that "the court records did not indicate that the devices contained any proceeds of crime. On the contrary, as early as 2013, the client possessed 1,172 bitcoins with no connection to criminal activity, a fact supported by expert testimony." The negotiations for the bitcoin donation agreement were conducted by Radomír Daňhel, a former Deputy Minister of Justice. During the process, Daňhel repeatedly sought to clarify what the potential response of Financial Analytical Office (FAÚ) would be regarding the donated bitcoins should they be found to originate from criminal activity. According to Titz, Jiřikovský's specific motivations were never addressed during the negotiation of the donation to the Ministry.

Titz stated that, within the draft agreement, he proposed that the Ministry of Finance, the Financial Analytical Office, the Office for Government Representation in Property Affairs, and the Supreme Public Prosecutor's Office all be informed of the pending transaction. However, the matter was not reported to the FAÚ until a week later, with Daňhel personally briefing FAÚ leadership only in late March. The Supreme Public Prosecutor's Office was officially notified of the transaction on 1 April, coinciding with the appointment of Lenka Bradáčová as head of the office by Minister Blažek. In July 2025, Bradáčová provided a formal clarification regarding the timeline of when the Supreme Public Prosecutor's Office was first apprised of the contract between the Ministry of Justice and Jiřikovský. Subsequent police findings concerning the prosecution's involvement in the case led to Bradáčová's recusal from the legal supervision of the investigation to ensure impartiality. Bradáčová officially learned of the donation on her first day in office in April 2025. At around the same time, Daňhel inquired by letter how she intended to use the funds from the accepted gift. The then-High Public Prosecutor stated that the money would be allocated for electronic equipment across the public prosecution system. Journalists noted discrepancies in the statements contained in the case file: while Bradáčová was officially informed of the donation on April 1, 2025, the then-Minister of Justice, Blažek, had informed Kateřina Arajmu, Director of the Office for Government Representation in Property Affairs, that Bradáčová had known about the donation as early as February 6 of that year. Furthermore, journalists pointed out inconsistencies between the testimonies of Arajmu and her former deputy regarding the ministry being warned prior to the acceptance of the gift. The deputy also confirmed that his office lacked any prior experience in verifying the provenance of cryptocurrencies.

Bitcoin issuance

Blažek initially stated that the crypto wallet was opened in the presence of a notary, who, according to the official record, arrived on March 7. However, an investigation by Radiožurnál revealed that hundreds of bitcoins valued at approximately two billion CZK had already been transferred to two separate accounts a day earlier. One of the accounts belongs to Jiřikovský, while the owner of the second remains unknown. Contrary to initial erroneous assumptions that the wallet contained 5366 bitcoins (roughly 12.5 billion CZK), which would have netted the Ministry up to 3.7 billion CZK under a one-third profit-sharing agreement, these figures were not confirmed. The discrepancy arose because the initial estimate included bitcoins that had remained dormant since 2016. Consequently, the final figure used for the calculation was 1,562 bitcoins, of which the state received 468.468. When notary Lubomír Mika and Deputy Minister Daňhel arrived at the scene, forensic expert Jiří Berger informed them that he had already opened the wallet in the presence of Jiřikovský and his attorney (Kárim Titz). The wallet allegedly contained 1,562 bitcoins (approximately 3 billion CZK), a claim verified on blockchain and supported by the donor's screenshot. The value of the 30% donation was subsequently calculated based on this figure. According to Daňhel, it was "explained to them" that the technology was obsolete, requiring 30 hours to become operational. The expert and the donor reportedly began the process before the other invitees arrived so that the notary and ministry representatives would not have to "sit there for so long." Investigations by Seznam Zprávy revealed that the expert was paid by Jiřikovský's attorney, Titz, based on an agreement with the Ministry of Justice, which had initially contacted the forensic expert on 20 February 2025. An additional witness—a representative of the Office for Government Representation in Property Affairs (ÚZSVM), which operates under the Ministry of Finance of the Czech Republic—was intended to be present during the handover. However, the Office declined to participate, citing a lack of competence for such activities. Consequently, the Ministry received a donation of 468 bitcoins, which, as of May 2025, was valued at approximately one billion CZK. The bitcoins were transferred to a crypto wallet held by the UZSVM, as the Ministry of Justice did not possess one. Although Decroix pledged to release the auditor's report, her handling of the matter raised concerns regarding transparency due to repeated failures to publish the audit text. This constituted a breach of a prior coalition condition established during a vote of no confidence in Fiala administration. Titz later maintained that the transaction agreement concerned only a single wallet containing 1,561 BTC. However, the Ministry received bitcoins linked to the Nucleus marketplace, which held over 5,300 BTC; of these, 3,855.15 BTC have remained untouched since 2016, and are unrelated to the transaction.

Sale of bitcoins

The Ministry sold the acquired bitcoins in an auction at the end of March. In May 2025, when questioned by journalists, Minister Blažek described the transaction as "ultra-legal" or "ultra-clean." The successful bidders who purchased the bitcoins from the ministry discovered their illegal origin only after attempting to use them at exchanges, where the funds were subsequently seized.

Identification of Bitcoin origin

Jiřikovský personally attempted to liquidate Bitcoin worth 120 million CZK at the Prague-based cryptocurrency exchange Bit.plus. Using the independent blockchain analysis tool Chainalysis, the exchange determined that the Bitcoin originated from a wallet associated with the illegal market Nucleus, a platform known for the trade of weapons and narcotics. The exchange conducted this verification in compliance with cryptocurrency regulations and anti-money laundering (AML) legislation. During the process, Jiřikovský presented contract with the Ministry of Justice claiming ownership of two billion CZK in Bitcoin (indicating that the Ministry had been aware since May 26 that the funds were of illicit origin). Due to the suspicious nature of both the Bitcoin and the provided contract, the exchange reported the transaction to Financial Analytical Office (FAÚ), the Czech Republic's financial intelligence unit, on March 28. The FAÚ subsequently filed a criminal complaint with the police on April 1 (though, according to reporting by Seznam Zprávy, police were already investigating the matter by that time). Law enforcement subsequently ordered the "freezing" of the Bitcoin by instructing exchanges to prevent any further liquidation. This discovery established a direct link between Jiřikovský and the Nucleus marketplace. Prior to late May 2025, during the investigation into Jiřikovský's involvement in the Sheep Marketplace case, for which he had already served a sentence, authorities had not pursued potential connections between him and Nucleus.

Resignation of Minister Blažek

After media scrutiny, Minister Blažek resigned on 30 May 2025, citing a desire to avoid compromising the governing coalition's standing four months ahead of the parliamentary elections. Blažek's deputy, Radomír Daňhel, also stepped down from his position. In response to the developments, Prime Minister Fiala announced that he would convene the National Security Council to address the situation.

Seizure and disclosure

The National Headquarters Against Organized Crime (NCOZ) seized the first 50 bitcoins on 4 April 2025; however, the Ministry of Justice did not officially learn of this until May 26, when Jiřikovský's lawyer, Kárim Titz, sent the seizure protocol to the ministry. The Ministry of Justice reportedly experienced urgent internal communications regarding the bitcoins' legal status and origin verification. A chronological overview published by Eva Decroix describes urgent concern within the ministry. The case was made public on 28 May 2025.

Sale of seized Bitcoins

Kirill Juran, legal representative of two clients who received the bitcoins from the state, said his clients did not receive any information from the state regarding the origin of the cryptocurrency coins. The purchase agreement did not contain information about the addresses from which they originated. The clients did not receive the full amount from the state on 11 June 2025. Juran pointed out that the state did not want to issue another purchase agreement to complete the transfer of the entire amount. At the same time, he criticized the statement that no one had been harmed in the case, arguing that, the people who bought bitcoins from the state were the most harmed. He did not rule out legal proceedings against the state for the damage incurred, which he estimated at half a billion Czech koruna, depending on the market price of bitcoin.