A Massive, Secret Stockpile of Bitcoin
The United States government has run a side business auctioning off bitcoin and other cryptocurrencies for years. Historically, Uncle Sam has done a poor job of market timing.
The 500 bitcoin it sold to Riot Blockchain for around $5 million in 2018? It is now worth more than $23 million. Or the 30,000 bitcoin sold to billionaire venture capitalist Tim Draper in 2014 for $19 million? That equates to more than $1.3 billion in today’s dollars.
One of the following seizures up for auction is a $56 million worth of cryptocurrencies confiscated by authorities as part of a Ponzi scheme case involving the offshore crypto lending program BitConnect.
Seizing and Stockpiling Bitcoin
For the most part, the U.S. has used legacy crime-fighting tools to deal with tracking and seizing cryptographically built tokens.
The flow of bitcoin and other cryptocurrencies through the criminal justice system in the United States is currently at three significant crossroads.
The first stage consists of a search and seizure. The next is the liquidation of raided cryptocurrency. The third step is to put the proceeds from the cryptocurrency sales to use.
The first stage is a collaborative effort. The Federal Bureau of Investigation, Homeland Security, the Secret Service, the Drug Enforcement Administration, or the Bureau of Alcohol, Tobacco, Firearms, and Explosives could all be a part of it.
Other organizations with more money and resources concentrate on the technical aspects.
The Crypto Auction Block
The United States Marshals Service is in charge of auctioning off the government’s crypto holdings once a case is closed. It has seized and auctioned over 185,000 bitcoins so far. Even though many sold in batches at much lower prices, that cache of coins is now worth around $8.6 billion.
It’s a big responsibility for one government agency to bear, which is why the Marshals Service no longer does it alone.
The United States General Services Administration, which usually auctions off surplus federal assets like tractors, added confiscated cryptocurrencies to the auction block earlier this year.
His team’s tracked and seized cryptocurrency accounts for roughly 60% to 70% of the Treasury Forfeiture Fund, making it the most significant individual contributor. Congress, for example, has the authority to revoke the funds and redistribute them to other projects.
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