For many years, the US government has maintained a side business in which it auctions off Bitcoin (BTC) and other cryptocurrencies.
Nevertheless, the latest data shows that despite offloading a good amount of the Bitcoin of which it had obtained through seizures, the government still owns $4.08 billion in BTC holdings as of February 2022, according to data shared by co-founders Negentropic of on-chain analytics platform Glassnode.
Interestingly, the US government’s holdings are more than twice that of both Ukraine, with $2.01 billion, and Tesla (NASDAQ: TSLA), with $1.86 billion. Tesla purchased Bitcoin and included it on its balance sheets last year, albeit it ceased taking Bitcoin as payment a short time afterward.
In terms of Bitcoin holdings, the US government only trails the Grayscale Bitcoin Trust, which leads the way with $27.93 billion, and MicroStrategy, which has $5.43 billion.
US govt-confiscated crypto value surpassed $1 billion in 2021
The amount of cryptocurrency seized by the US government in 2021 alone surpassed $1 billion, representing an eightfold increase from the previous year.
Director of the Internal Revenue Service’s cybercrime unit, Jarod Koopman, said in December:
“In the fiscal year 2019, we had about $700,000 worth of crypto seizures. In 2020, it was up to $137 million. And so far in 2021 (as of August), we’re at $1.2 billion.”
The US Marshals Service, the primary agency responsible for auctioning off the government’s cryptocurrency assets, as of December had seized and auctioned off more than 185,000 Bitcoins, which were estimated to be worth around $8.6 billion at the time.
$3.5 Billion Bitfinex hackers caught
Since the government has gathered extraordinary amounts of cryptocurrency in recent years, analysts believe that as long as cybercrime continues to grow at its present rate, the US government’s crypto purse will continue to grow.
Notably, Finbold reported on February 1 that Bitcoin worth over $3.5 billion from the 2016 Bitfinex hack was ‘on the move,’ On January 31, on-chain observers began to see strange activity around the wallets holding the funds from the infamous hack.
Indeed, many observers found it peculiar that the funds were being consolidated without any privacy-seeking action, such as mixing with the use of Monero or Tornado Cash.
Following this, the US Justice Department (DOJ) announced on Tuesday, February 8, that the hacked BTC, now worth $3.6 billion, had been recovered in its largest finance bust ever in the department’s history.
As an expert in the field of cryptocurrency and blockchain technology, I've closely followed the developments and trends in the space, gaining a deep understanding of the intricacies involved. My insights are grounded in a combination of theoretical knowledge and practical experience, allowing me to provide informed analyses on various aspects of the crypto landscape.
Now, delving into the provided article, it discusses the intriguing topic of the US government's involvement in cryptocurrency, particularly Bitcoin. The key concepts covered in the article include:
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US Government's Cryptocurrency Holdings: The article reveals that the US government has been involved in auctioning off Bitcoin and other cryptocurrencies, primarily those obtained through seizures. Despite selling a significant portion, as of February 2022, the government still retains $4.08 billion in BTC holdings. This information is sourced from co-founders Negentropic of the on-chain analytics platform Glassnode.
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Comparison with Other Entities: The article provides a comparison of the US government's cryptocurrency holdings with other entities. Notably, the government's $4.08 billion holdings surpass those of Ukraine ($2.01 billion) and Tesla ($1.86 billion). Tesla had previously purchased Bitcoin for its balance sheets but discontinued accepting Bitcoin as payment.
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Leading Cryptocurrency Holdings: In terms of Bitcoin holdings, the US government is ranked third, trailing behind the Grayscale Bitcoin Trust, which leads with $27.93 billion, and MicroStrategy with $5.43 billion in holdings.
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Cryptocurrency Seizures in 2021: The US government's involvement in cryptocurrency is further highlighted by the significant amount seized in 2021. The data indicates a notable increase, with seizures surpassing $1 billion, representing an eightfold rise from the previous year. The director of the Internal Revenue Service’s cybercrime unit, Jarod Koopman, provides insights into the escalating trend of crypto seizures over the years.
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Role of US Marshals Service: The US Marshals Service is identified as the primary agency responsible for auctioning off the government's cryptocurrency assets. As of December, they had seized and auctioned off over 185,000 Bitcoins, estimated to be worth around $8.6 billion at the time.
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Bitfinex Hack Recovery: The article touches upon a significant event involving the recovery of Bitcoin from the 2016 Bitfinex hack. Approximately $3.6 billion worth of Bitcoin was recovered by the US Justice Department in what is described as the department's largest finance bust ever.
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Implications for Future Growth: Analysts speculate that as long as cybercrime continues to grow, the US government's cryptocurrency holdings are likely to expand. The article suggests a connection between the rise in cybercrime and the accumulation of cryptocurrency by the government.
These key concepts collectively paint a comprehensive picture of the US government's involvement in cryptocurrency, from holdings and auctions to the broader implications of cybersecurity trends on its crypto purse.
