Will the Bitcoin sales scandal bring down the Czech government?

On Thursday, June 5, the Czech Chamber of Deputies convened to discuss a political scandal unprecedented by local standards.

This is a story involving crime, political calculations, and bitcoins. It was the sale of these coins by the Czech Ministry of Justice that led to the resignation of the head of the department, Pavel Blažek, at a politically sensitive moment: parliamentary elections are due to take place in the country in a few months, and the current coalition has almost no chance of retaining its majority.

Most likely, the populist ANO party will take first place in these elections, whose leader, Andrej Babiš, actively criticizes the current Czech government for supporting Ukraine.

This rapid story began with a short post on the Czech Ministry of Justice’s X platform, which confirmed: yes, we held 78 auctions and sold bitcoins for 956.8 million Czech korunas—or almost 40 million euros.

In the official statement, the story had a noble and somewhat mysterious message: the bitcoins were received from an unnamed benefactor, and the proceeds—not such a small amount—were to be used to compensate victims of cyber fraud and the chronically underfunded Czech prison system.

But on the same day, journalists from Denik N identified the anonymous donor.

The secret patron turned out to be Tomáš Jiřikovský, who had been convicted of fraud.

Although charitable donations to government agencies are not prohibited in the Czech Republic, and there is no question of any personal interest on the part of Minister Blažek, this story has raised many uncomfortable questions.

And although no official charges have been brought against anyone yet, the situation has caused outrage even among the partners of the former Minister of Justice.

In particular, Interior Minister Vít Rakušan called the sale of bitcoins “very unusual” and damaging to the image of the coalition government.

Minister of Justice Pavel Blažek, “after agreement with the prime minister,” his party colleague Petr Fiala, decided to voluntarily resign so as not to damage the government’s reputation and even withdrew from the list of his native ODS party in the upcoming parliamentary elections. “In my mind, I have already left politics,” he explained.

However, the opposition is convinced that the scandal is not the responsibility of just one minister.

Andrej Babiš, leader of the largest opposition party, ANO, initiated parliamentary hearings on the scandal on June 5, announcing a vote of no confidence in Prime Minister Fiala.

Although the opposition does not have enough votes to pass a vote of no confidence, it hopes to use this scandal to discredit the government before the elections.

However, Blazek’s voluntary resignation deprived the opposition of a key argument and, at the same time, gave Prime Minister Fiala an opportunity to remind everyone that Babiš himself, when faced with allegations of corruption while in office, did not resign.

“You can’t preach morality if you can’t live by it yourself,” the current prime minister reproaches his predecessor (and very likely successor).

However, the story is far from being over. The scandal could become a serious problem for the coalition (the chances of Fiala’s pro-EU government surviving after the elections were not very high to begin with) and for the prime minister personally.

Fiala’s position could deteriorate, potentially forcing him to step down from the ODS party leadership earlier than expected. And then the leadership of the party would pass to his critic and opponent, Martin Kuba.