U.S. Government Emerges as a Massive Bitcoin Holder with Assets worth $5.3B
Summary:
The U.S. government is one of the largest Bitcoin holders, possessing over 200,000 BTC worth approximately $5.3 billion. The stash is primarily stored offline in encrypted hardware wallets under the Justice Department and the Internal Revenue Service jurisdiction. Despite large Bitcoin seizures from 2020 onwards, seized assets don't instantly belong to the government; they're transferred to the U.S. Marshals Service only after a forfeiture judgment. Additionally, the government frequently sells off portions of the confiscated Bitcoin via auction based on court orders.
In a surprising twist of fate, the U.S. government has become the owner of more than $5 billion in Bitcoin, encompassing over 200,000 BTCs, even after selling millions of dollars worth of Bitcoin earlier in the year. Crypto company 21.co estimates that the U.S. government's possession of Bitcoin still stands at 194,188 BTC, worth $5.3 billion, based on an examination of publicly available records, signalling that the estimates are fairly conservative.
The findings were the result of tracking the Bitcoin transactions connected to the U.S. government’s wallets that were tied to the three biggest Bitcoin seizures from 2020 onwards. This included the 69,369 BTC obtained from the infamous Silk Road seizure in November 2020, the 94,643 BTC from the Bitfinex Hack incident in January 2022, and 51,326 BTC from the James Zhong seizure which took place in March 2022.
The collection of Bitcoin owned by the government is primarily kept offline in secure, encrypted storage devices known as hardware wallets. These are maintained under the Justice Department and the Internal Revenue Service. These two bodies oversaw two significant seizures that occurred in 2022.
However, these confiscated assets do not instantly become government property. The U.S. Marshals Service, taking the lead role in disposing of seized goods, only gains control of the taken Bitcoins after a court issues a conclusive forfeiture judgment. Additionally, the government will sell a portion of the seized Bitcoin sporadically through a court-ordered auction process.
The most noteworthy such auction took place back in 2014, when billionaire Tim Draper purchased 30,000 BTC from a U.S. government auction. However, recently, the government has shifted to using crypto exchanges instead of public auctions to offload Bitcoins. A prime example of this occurred just this March when the government auctioned off a hefty sum of 9,118 BTC on Coinbase, a tidbit discovered via public filings.
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In other related news, U.S. law enforcement agencies are taking a more proactive approach in their fight against criminal activities linked to cryptocurrency.
Published At
10/16/2023 8:19:01 AM
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