The U.S. government is one of the worlds Bitcoin largest holders, with three recent seizures resulting in approximately 200,000 Bitcoins worth more than $5 billion seized from cybercriminals, as per WSJ.
U.S. Government Becomes Bitcoin Largest Holder
The U.S. government has been reportedly one of the worlds Bitcoin largest holders. The holding is a result of three recent seizures, which yielded over 200,000 Bitcoins valued at more than $5 billion.
The seized Bitcoins primarily come from cyber criminals and darknet markets and are stored in encrypted hardware wallets controlled by various government agencies such as the Ministry of Finance, the Internal Revenue Service (IRS), and the Justice Department.
The government‘s total stash is likely even larger than what has been publicly disclosed. While the U.S. has been slow in converting its Bitcoin holdings into dollars, recent seizures have added substantial value to its overall holdings. The legal process to convert seized Bitcoin into cash can take years, during which time the cryptocurrency’s value can appreciate significantly.
Approach to Handling Seized Bitcoin
The U.S. governments approach to handling seized Bitcoin differs from its treatment of other seized assets. When a government agency takes control of a crypto asset, it does not immediately become the property of the government.
Only after a court issues a final forfeiture order does the government take ownership and transfer the tokens to the U.S. Marshals Service, the primary agency responsible for liquidating seized assets.
To ensure a fair market value and avoid adverse impacts on the market, the U.S. Marshals Service has evolved its liquidation process alongside the development of the crypto industry.