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Tuesday, July 16, 2024

US government has $5 billion worth of bitcoin – WSJ

A massive amount of crypto has reportedly been seized from cybercriminals

The US government has become one of the largest holders of cryptocurrency after seizing roughly 200,000 bitcoin worth billions of dollars, the WSJ reported on Sunday, citing an analysis of public filings by crypto firm 21. co.

Hardware wallets controlled by the Justice Department, the Internal Revenue Service and other government agencies contain 194,188 bitcoins, estimated to be worth $5.3 billion, according to 21.co, which claims these are “lower-bound estimations of the US government holdings based on publicly available information.”

Read more: Standard Chartered predicts Bitcoin to hit $100,000 by end of 2024

The analysis carried out by the crypto firm tracked bitcoin movements to and from US government accounts associated with the three largest seizures of the cryptocurrency since 2020.

A notable example was the intervention in the Bitfinex cyber-attack of January 2022, which took nearly six years to complete and resulted in the Justice Department securing 94,643 bitcoin. Similarly, 51,326 bitcoin were obtained in the James Zhong seizure in March 2022. The notorious shutdown of the online drug marketplace Silk Road in November 2020 enabled the government to seize 69,369 bitcoin.

Read more: Bitcoin has ‘no future’ – Russian finance official

The assets are reportedly stashed primarily offline in encrypted storage devices kept by the Justice Department and the Internal Revenue Service.

From time to time, Washington sells some of the seized bitcoin through an auction system based on court liquidation orders. The most notable sale occurred in 2014, when billionaire Tim Draper bought 30,000 of the tokens from government auctions.

However, in recent years, the government has opted to sell the seized crypto assets via exchanges. One such sale was carried out earlier this year, when 9,118 bitcoin were sold on Coinbase, according to a public filing.