The US government has seized a large amount of Bitcoin in the past from the Silk Road and Bitfinex hacking cases, currently holding Bitcoin worth $14.9 billion, making it the fifth-largest Bitcoin holder in the world. Ki Young Ju, the CEO of CryptoQuant, pointed out that the unrealized profit of the US government’s Bitcoin holdings is 2.4 times higher.
(Background:
Will the US government’s auction of $1 billion worth of Bitcoin affect the market? How much Bitcoin has been confiscated in total?)
Bitcoin holdings have unrealized profits 2.4 times higher
Bitcoin holdings are worth $14.9 billion
The source of the US government’s Bitcoin holdings
Between 2020 and 2022, the US government has seized a large amount of Bitcoin from the Silk Road, the largest darknet marketplace, and the Bitfinex hacking case, making it one of the largest Bitcoin holders.
With Bitcoin fluctuating around $70,000, Ki Young Ju, the CEO of CryptoQuant, pointed out:
Additionally, according to data from the cryptocurrency intelligence platform Arkham, the US government holds 215,245 Bitcoins, with a total value of $14.9 billion, making it the fifth-largest Bitcoin whale in the world, second only to Coinbase, Binance, Grayscale, and Fidelity.
In addition to Bitcoin, the US government also holds 50,147 Ethereum, 10.14 million USDC, 5.36 million DAI, and 2.27 million USDT, with a total holding value exceeding $15.1 billion.
The source of the US government’s Bitcoin holdings
Where did the US government acquire such a large amount of Bitcoin? The specific sources are as follows:
Confiscated from the Silk Road, the largest darknet marketplace, in November 2020 – 69,369 BTC
Confiscated from the Bitfinex hacking case in January 2022 – 94,643 BTC
Confiscated from the Silk Road hacker James Zhong in March 2022 – 51,326 BTC, of which the US government still holds 41.5K BTC
Currently, these BTC are mainly stored in encrypted, password-protected offline cold wallets controlled by the US Department of Justice, the Internal Revenue Service, or other institutions.
For a long time, how the US government handles these confiscated Bitcoins has been a topic of market concern, as any sale could potentially affect the price. The US government’s recent actions in selling Bitcoin include selling 9,861 BTC on Coinbase in February last year and announcing the sale of 2,858 BTC at the end of January this year. However, according to information from CryptoQuant, the US government did not sell any Bitcoin at the end of January this year. In February this year, the US government transferred 15,085 BTC confiscated from the Bitfinex hacking case, possibly in preparation for an auction.
The US Marshals Service has previously stated that they will sell cryptocurrency assets in batches rather than all at once to minimize adverse effects on the market. Jarod Koopman, the director of the Cybercrime Investigations Unit at the IRS, has also stated:
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