According to an analysis by cryptocurrency firm 21.co, the US government has emerged as one of the largest holders of cryptocurrency, with approximately 200,000 bitcoin, worth billions of dollars, in its possession. This revelation was based on a review of public filings by the firm. It is important to note that these figures are considered to be conservative estimates of the US government’s holdings.
The analysis conducted by 21.co focused on the movement of bitcoin to and from US government accounts associated with three major seizures of the cryptocurrency that took place since 2020. One noteworthy example was the intervention in the Bitfinex cyber-attack in January 2022. After nearly six years of effort, the Justice Department managed to secure 94,643 bitcoin. Additionally, in March 2022, the government obtained 51,326 bitcoin in the James Zhong seizure. Furthermore, the notorious shutdown of the online drug marketplace Silk Road in November 2020 allowed the government to seize 69,369 bitcoin.
These seized assets are primarily stored offline in encrypted storage devices, which are controlled by the Justice Department and the Internal Revenue Service. This secure method ensures the safety and integrity of these valuable assets.
From time to time, the US government sells some of the seized bitcoin through an auction system based on court liquidation orders. One notable example was in 2014 when billionaire Tim Draper purchased 30,000 tokens from government auctions.
However, in recent years, the government has opted to sell its seized crypto assets through exchanges. Earlier this year, for instance, 9,118 bitcoin were sold on Coinbase, as stated in a public filing. This shift in selling strategy indicates the government’s willingness to adapt to the evolving cryptocurrency landscape.
The possession of a significant amount of cryptocurrency by the US government raises several questions. It presents an interesting dynamic where a decentralized and digital currency is controlled by a centralized entity. This situation also showcases the potential influence that the government can have in the cryptocurrency market.
As the popularity and value of cryptocurrencies continue to grow, the US government’s holdings will likely attract more attention and scrutiny. The disclosure of these holdings highlights the government’s efforts to combat cybercrime and illicit activities associated with cryptocurrencies.
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