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U.S. Government's Bitcoin Holdings and Liquidation Process

Explore the U.S. government's substantial Bitcoin holdings, their origins from cyber crime seizures, and the ongoing liquidation process.
Published on 2023-10-16

U.S. Government's Bitcoin Holdings

The U.S. government is a prominent Bitcoin holder, managing over 200,000 BTC, currently valued at around $5 billion. These holdings are securely stored offline in hardware wallets under the supervision of the Department of Justice and the Internal Revenue Service.

Origins of Bitcoin Holdings

The majority of these Bitcoin assets were confiscated from cyber criminals. Noteworthy seizures include 69,369 BTC from Silk Road founder Ross Ulbricht in 2020, 94,643 BTC from Bitfinex hackers Ilya Lichtenstein and Heather Morgan in January 2022, and 51,326 BTC from James Zhong in March 2022. These efforts have significantly contributed to the government's Bitcoin treasury.

Seizure and Liquidation Process

The U.S. Marshals Service assumes control of these seized cryptocurrencies only after a court's definitive forfeiture judgment. The liquidation process for these assets commenced in January 2021 and is anticipated to conclude by the end of 2023.

Historical Auctions and Recent Sales

Historically, the government has auctioned off seized Bitcoin following court orders. A notable auction occurred in 2014 when entrepreneur Tim Draper acquired 30,000 BTC. More recently, the government has utilized crypto exchanges like Coinbase for selling seized Bitcoin, marking a shift towards modern digital trading platforms.

These actions underscore the government's strategic approach in managing and liquidating digital assets obtained through legal proceedings, highlighting its evolving role in the cryptocurrency market.

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