U.S. Government Holds Over $5B in BTC, Becomes Major Bitcoin Player
The U.S. government has amassed Bitcoin worth approximately $5 billion in recent developments. These assets, confiscated in connection with various criminal activities, now form one of the largest known Bitcoin caches. Cybercriminals and darknet marketplaces are the primary contributors to this stash, with federal agencies ensuring these digital assets are secured offline in encrypted hardware wallets.
U.S. Government Bitcoin Holdings Surpass $5 Billion
Significantly, swelling the government’s Bitcoin coffers isn’t a strategic move. Instead, it results from lengthy legal protocols related to asset seizures. Jarod Koopman of the IRS clarified that the acquisition and holding of Bitcoin are tied to legal timelines, not market conditions. The government’s hands-off approach departs from active trading, underscoring a commitment to legal proceedings over financial speculation.
Moreover, recent activities have significantly padded the government’s Bitcoin reserves. Despite selling some, the U.S. still holds assets exceeding $5 billion. Considering the ongoing nature of numerous seizure processes, the actual quantity might be even greater.
U.S. Updates Method for Bitcoin Disposal
Understanding the U.S. government’s methodology requires a look back at past seizures, like the notable case involving Silk Road founder Ross Ulbricht. The Justice Department, since 2013, has adapted secure storage practices for seized Bitcoins, utilizing hardware wallets. These protocols ensure security and compliance with legal standards pending asset forfeiture completion.
However, the strategy for liquidating these assets has evolved. Initially, direct auctions were the standard, attracting bidders like Tim Draper in 2014. However, as of January 2021, a shift occurred. The U.S. Marshals Service began dispersing digital currencies through crypto exchanges to mitigate market impact. This approach involves selling assets in phases, ensuring stability within the cryptocurrency sphere.
One such instance was in March, selling 9,861 Bitcoins via Coinbase. The U.S. Marshals confirmed this transaction, marking a continued trend toward strategic asset liquidation. This practice aligns with the agency’s commitment to prompt, fair-market-value sales. The proceeds typically support various facets of a criminal investigation or go toward victim restitution.
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