NewsRescue
The US government has become one of the top cryptocurrency holders after seizing around 200,000 bitcoin worth billions of dollars, according to the Wall Street Journal, citing an analysis of public records by crypto firm 21.co.
According to 21.co, hardware wallets controlled by the Justice Department, the Internal Revenue Service, and other government agencies contain 194,188 bitcoin worth $5.3 billion, which are “lower-bound estimates of the US government holdings based on publicly available information.”
The crypto firm’s investigation traced bitcoin flows to and from US government accounts related with the three major cryptocurrency seizures since 2020.
The intervention in the Bitfinex cyber-attack in January 2022, which took nearly six years to complete and resulted in the Justice Department securing 94,643 bitcoin, is one significant example. Similarly, 51,326 bitcoin were obtained in the March 2022 James Zhong seizure. The authorities was able to collect 69,369 bitcoin during the legendary closure of the online drug bazaar Silk Road in November 2020.
According to reports, the assets are mostly held offline on encrypted storage devices kept by the Justice Department and the Internal Revenue Service.
Washington occasionally sells some of the confiscated bitcoin via an auction system based on court liquidation orders. The most significant transaction came in 2014, when billionaire Tim Draper purchased 30,000 tokens through government auctions.
However, in recent years, the government has chosen to sell seized cryptocurrency assets through exchanges. According to a public filing, one such sale occurred earlier this year, when 9,118 bitcoin were sold on Coinbase.