U.S Government is One of the Largest Bitcoin Holders
After seizing over 50,000 BTC from Silk Route thief James Zhong, the U.S. government is now one of the largest holders of Bitcoin. With more than 210,000 BTC under custody, the federal government holds more Bitcoin than Microstrategy.
Following three major confiscations in the last two years, the United States government is now a Bitcoin (BTC) whale. In November, law enforcement officials revealed that the U.S. Department of Justice (DOJ) confiscated approximately 50,676 BTC, worth over $820,000 at the time of writing, from James Zhong, a thief involved with the dark web marketplace – Silk Road. The latest bust brought the U.S. government’s Bitcoin tally to 210,000 BTC, worth $3.5 billion at the current market rate.
Zhong, the criminal mastermind who orchestrated a fraud scheme on Silk Road to steal over 50,000 BTC in September 2012, was arrested at his home in Georgia on November 7th. He pled guilty to his crimes, sealing the DOJ’s claims to seize the Bitcoin in his possession. In November 2020, U.S government officials confiscated 69,370 BTC from another hacker dubbed ‘’Individual X”, who was responsible for stealing $1.1 billion worth of Bitcoin from Silk Route almost 18 months before it was shut down by the Federal Bureau of Investigation (FBI) in 2013.
The largest bust of all was when the DOJ seized over 94,000 BTC that was stolen from cryptocurrency exchange Bitfinex back in 2016. Authorities arrested Ilya Lichtenstein and his wife Heather Morgan who were linked to the attack. Hackers had breached Bitfinex’s security systems and initiated more than 2,000 transactions which led to them draining 119,754 BTC from the platform. These assets were then transferred to a wallet belonging to Lichtenstein. The couple was allegedly trying to launder the proceeds before they were caught in February 2022. The DOJ was able to seize 94,636 BTC that was stolen in the attack, which is now worth over $1.5 billion.
With a total of 214,682 BTC under custody, the U.S government now holds 1.02% of the 19 million Bitcoin that is currently in supply. This total overthrows the tally held by some of the largest corporate holders of Bitcoin – Microstrategy and Block.one, who have 130,000 and 140,000 BTC under custody. Only crypto investment firm Grayscale holds more Bitcoin than the U.S government, with 643,572 BTC worth over $10 billion held under the Grayscale Bitcoin Trust (GBTC).
Usually, the federal government auctions off seized crypto assets through the General Services Administration (GSA) under U.S Marshals. Last year, the GSA auctioned $377,000 worth of Bitcoin and Litecoin (LTC) in June, and $54 million worth of cryptocurrencies seized from the BitConnect fraud scheme in November. Prior to this, authorities thrice auctioned cryptocurrencies for a total of $940,000. The Justice Department has not given details about when they will be putting portions of the 210,000 BTC currently in possession up for grabs.
Also Read Japanese Megabanks To Conduct Tests For Digital Yen Starting Next Year
Apart from the United States, the government of China is also known to be one of the largest holders of Bitcoin. According to Ki Young Ju, CEO of blockchain analytics firm CryptoQuant, the Chinese government currently holds 194,000 BTC worth $3.1 billion under custody that was seized from culprits behind the PlusToken fraud scheme in 2019.
At the time of writing, BTC is trading at $16,218, dropping 1.8% in the last 24 hours.
Also Read Binance Reserves Another $1 Billion to Crypto Recovery Fund
