The US Government Holds $5 Billion in Bitcoin
Despite the US government’s supposed aversion to Bitcoin and other cryptocurrencies, a recent report reveals that the country is actually one of the largest holders of the pioneer cryptocurrency. The majority of the US government’s Bitcoin holdings, totaling 200,000 BTC, have been acquired through seizures from cybercriminals and darknet markets. These tokens are primarily held in cold wallets controlled by government agencies such as the Justice Department, IRS, and FBI.
Government’s Approach to Bitcoin Holdings
The government’s handling of these BTC holdings has always intrigued the crypto community. The report sheds light on this matter, explaining that the government is forced to hold onto its stash due to the legal process surrounding asset seizures. Ownership of these assets is not immediately transferred to the government upon seizure; instead, it must wait for a court-issued forfeiture order. Once ownership is transferred, the government passes the tokens to the US Marshals Service, responsible for liquidating them in batches rather than all at once.
The Government’s Major Seizures
Evidence suggests that the government’s Bitcoin holdings may have exceeded 200,000 BTC at one point. According to a report on Dune Analytics, since 2020, the US government has seized at least 215,000 BTC. Notably, three major seizures alone surpass the 200,000 mark. These include 69,369 BTC seized from Silk Road marketplace proceeds in November 2020, 94,643 BTC seized from Bitfinex hack proceeds in January 2022, and 50,676 BTC seized from James Zhong for stealing funds from Silk Road marketplace.
Hot Take: The US Government’s Secret Crypto Fortune
Contrary to its aversion towards Bitcoin, the US government has accumulated a substantial fortune in the cryptocurrency through seizures from cybercriminals and darknet markets. With holdings of over 200,000 BTC, valued at around $5 billion, the government has become one of the largest Bitcoin holders globally. However, due to the legal process surrounding asset seizures, the government is forced to hold onto its stash until ownership is transferred through a court-issued forfeiture order. While the government’s Bitcoin holdings have the potential to significantly impact the market if sold off, it takes a considerate approach by liquidating these assets in batches rather than all at once.
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