The United States government has grown its bitcoin holdings to about 1% of the total supply according to blockchain analytics.
The US government currently holds 205,000 bitcoin, worth about $5.75 billion, more than at any time since 2013.
That follows three Blockbuster asset seizures since November 2020, starting with 70,000 seized from Individual X.
The officers involved provided the bitcoin addresses in the complaint, and so now years on we know precisely what is happening to those coins. They still have 69,369 BTC.
Then on November the 9th 2021, they seized 51,000 bitcoin taken from James Zhong. Both seizures are related to the now defunct Silk Road online bazaar.
The Zhong seizure was the “second largest financial seizure ever” based on the value at the time of $3.36 billion according to the Justice Department.
A third success for the law enforcement came from a slightly different area when they were able to take possession of 94,000 bitcoin from the Bitfinex hacker on January 31st 2022. Describing it at the time, they said:
“On January 31, 2022, law enforcement gained access to Wallet 1CGA4s by decrypting a file saved to LICHTENSTEIN’s cloud storage account, which had been obtained pursuant to a search warrant. The file contained a list of 2,000 virtual currency addresses, along with corresponding private keys.”
This detail was presumably revealed because some officials confused the ‘voluntary’ handing over of data by some cloud provider with ‘hacking bitcoin private keys’ as some claimed at the time.
Regardless, this has added bigly to gov’s bitcoin holdings, even though the Bitfinex ones might be more temporary possession.
The Silk Road ones are related to hacks of Silk Road, and there might be questions regarding whether they have any relation with the hacked MT Gox coins as the flow between the two was vast at the time.
These considerations might explain in part why they’re still holding the coins, but it may be also because the government might try to hedge as with foresight, they suffered huge losses in their 2014-15 sale of Silk Road bitcoins.
They seized 144,000 BTC at the time, and sold them for just $50 million. It is now worth, even with the circa 70% fall in price since November 2021, $4 billion.
In addition, the US government is a vast entity and needs private money outside of the banking or state system that does not reveal any information if you are careful with how you use it.
They are willing to pay informants in bitcoin and other cryptos for example. With a war going on at the edges of Europe, they could also fund with bitcoin some new secretive arm production facility.
The government of course has the power to tell a bank to shut up if they want in regards to these sort of activities, but the bank data might be hacked or some employee might leak it. The bitcoin instead, and the data, is fully in control of the specialist agents.
The government being so vast however can also mean that the left hand doesn’t talk to the right hand. One might sell it at $50 million, and the other might have to buy it at $4 billion.
But, these are just the bitcoin holdings of the US government that we know of, not necessarily their total holdings, and they’re the biggest of any government.
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- Source: https://www.trustnodes.com/2023/03/28/us-gov-becomes-top-holder-of-bitcoin
