The US government has emerged as one of the largest holders of Bitcoin, the world’s most popular cryptocurrency, according to a news report by the Wall Street Journal. The report estimates that the US government currently holds more than 200,000 BTC worth over $5 billion, making it the third-largest Bitcoin owner behind Grayscale Bitcoin Trust and MicroStrategy.
The majority of the government’s Bitcoin stash comes from seizures related to cybercrime and illegal online activities. For example, the US government confiscated 69,369 BTC from the Silk Road dark web marketplace in 2020, 94,643 BTC from the Bitfinex hack in 2022, and 51,326 BTC from a fraudster named James Zhong in 2022.
The seized Bitcoins are stored in hardware wallets controlled by various agencies such as the Justice Department and the Internal Revenue Service. However, the government does not own the Bitcoins until a court issues a final forfeiture order.
The US government also sells some of the seized Bitcoins from time to time through auctions or exchanges. In 2014, billionaire Tim Draper bought 30,000 BTC from a government auction. In 2022, the government sold 9,118 BTC on Coinbase, according to a public filing.
The report suggests that the US government’s Bitcoin holdings are probably larger than publicly disclosed. It also raises questions about the government’s strategy and attitude towards Bitcoin, which is often seen as a threat to its monetary sovereignty and a tool for illicit activities.
Bitcoin Began the Week Showcasing Solid Numbers
In related news, On Monday morning, Bitcoin once again approached the $28,000 mark, bolstered by positive developments in its spot ETF journey. As per data from CoinGecko, the cryptocurrency is currently being traded at approximately $27,700, after reaching a high of $27,958 earlier in the day.
The recent surge in Bitcoin’s value can be attributed to a significant legal development concerning Grayscale’s ambitions for an ETF. As per multiple sources familiar with the situation, the SEC has decided not to contest a court ruling from August that was related to its previous decision to block Grayscale’s Bitcoin ETF filing.