The United States government holds an impressive amount of 200,000 Bitcoins, valued at around 5 billion dollars. However, unlike regular investors, its interest does not lie in the cryptocurrency’s market value. This substantial Bitcoin reserve is the outcome of assets seized from cybercriminals. What the government possesses is not the result of an investment strategy but rather the consequence of protracted legal procedures.
What Will They Do?
Most of these assets are stored in hardware wallets and are under the control of government agencies such as the Department of Justice and the Internal Revenue Service (IRS). The major uncertainty lies in what the government will do with this vast Bitcoin reserve since any sale of these assets could have a significant impact on the market.
The legal process from the seizure of crypto assets to their liquidation can take several years, contributing to the accumulation of this impressive reserve. During this time, the government holds these assets as evidence, preventing their sale or use. While this may not represent intentional “holding,” it has indeed yielded significant economic benefits due to the evolution of Bitcoin over the years. The Department of Justice has been storing the seized Bitcoins in hardware wallets since the closure of Silk Road in 2013.
Previously, the government conducted auctions to sell these seizures to interested buyers. However, in January 2021, they decided to liquidate part of their seized assets on cryptocurrency exchanges instead of traditional auctions to avoid adverse impacts on the market. One of these sales occurred in March when the government sold 9,861 Bitcoins through Coinbase.
Always Towards Freedom
The proceeds generated from the sale of these assets are often directed toward reimbursing victims of cybercrimes. On the other hand, it is always necessary to reaffirm the government’s non-intervention in this market and keep pushing forward for the defense of our financial freedom..
