US Government Stashes Over $5 Billion in Bitcoin: Report Shows

Based on a recent report, it has come to light that the United States government is now among the largest BTC holders. According to the report, the US boasts more than $5 billion in Bitcoin.

This revelation has raised a myriad of intriguing questions. How come the US government holds such a substantial amount of Bitcoin?

US Government Holds Over 200,000 Bitcoin, Estimated at $5 Billion

The US government now owns a lot of Bitcoin, more than 200,000 worth over $5 billion. And even though the government sold a few thousand earlier this year, it still holds a vast amount.

A crypto research firm, 21. co estimated the US government has 194,188 Bitcoins left worth around $5.3 billion. According to 21.co, these are lower-bound estimations of the US government holdings based on publicly available information."

The analysts researched where the US government's Bitcoins came from. They found three significant events where the government seized a lot of Bitcoins. Firstly, in November 2020, they got 69,369 Bitcoins from the Silk Road seizure.Then, in January 2022, they got 94,643 Bitcoins from the Bitfinex Hack seizure.

Furthermore, in March 2022, they got 51,326 Bitcoins from the James Zhong seizure. Notably, the US government keeps its Bitcoin in a secure device known as a hardware wallet. These wallets are kept safe by the Justice Department and the Internal Revenue Service.

Bitcoin Seizures: Legal Steps and Auction Process by US Authorities

In 2022, the government took control of two large amounts of Bitcoin. Usually, when the US government seizes assets like Bitcoin, they don't automatically own them.The US Marshals Service, responsible for selling seized property, will get control of the Bitcoin.

Notably, this only happens after a court officially decides it belongs to the government. In addition, the government sells some of the seized Bitcoin from time to time through auctions. This auction was based on orders from the court, and the highest bidder grabbed the Bitcoin.

One famous auction happened in 2014 when a billionaire named Tim Draper bought 30,000 Bitcoins from the government. Another event where the US government sold seized Bitcoin was the sale of 9,118 BTC on Coinbase in March 2023.

The government confirmed the sale through a public filing as part of the case against James Zhong. Note that Zhong allegedly committed wire fraud in September 2012. This fraud involves obtaining over 50,000 bitcoins from the Silk Road internet marketplace.

Zhong pled guilty in November 2022 and was to receive a jail sentence the following month. The US government sold the seized Bitcoin on Coinbase. The sale netted over $215 million, with each coin's price selling for $21,877.

According to the report, this was $2,000 less than the going rate on the day of the sale. Fortunately, this sale didn't affect Bitcoin's price, as it gained 2.43% on the transaction day. Meanwhile, BTC currently trades at $27,730, representing a 24-hour increase of 3.2%.

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