Czech Justice Minister Pavel Blazek has resigned amid uproar over a $45 million Bitcoin donation tied to a convicted drug trafficker. The scandal erupted after the ministry revealed it raised nearly 1 billion Czech koruna (about $45 million) by auctioning close to 500 Bitcoin on May 28. The funds were intended for justice system upgrades, anti-drug initiatives in prisons, and improved housing for prison staff.

However, local media Denik N uncovered that the cryptocurrency originated from Tomas Jirikovsky, a criminal convicted in 2017 for running the dark web platform Sheep Marketplace. In March, Jirikovsky’s lawyer offered one-third of his seized Bitcoin as a donation. Blazek accepted the offer without verifying the origin of the funds, stating he wasn’t interested in details from a years-old case.

The revelation sparked widespread backlash, with critics accusing the minister of negligence and poor judgment. Opposition leaders branded the donation a scandal, and police have now opened an investigation into the Bitcoin’s origins. Jirikovsky, who was released from prison in 2021, is still trying to recover 1,500 Bitcoin confiscated during his arrest. Authorities had previously linked the crypto to Nucleus, another illegal dark web site.

Under mounting political pressure and just months before elections, Blazek stepped down on May 30, stating he didn’t want to damage the government’s reputation. Prime Minister Petr Fiala, once a close ally, publicly distanced himself from the embattled minister.

This controversy comes shortly after Czech President Petr Pavel signed new crypto legislation in February, aligning Czechia’s regulations with EU standards and aiming to foster innovation while ensuring clarity in digital asset management.