The following is a guest post from Vincent Maliepaard, Marketing Director at IntoTheBlock.
According to the latest data from IntoTheBlock, the U.S. government holds over 1% of the Bitcoin supply, valued at an impressive $13.16 billion. These holdings have tripled since 2021, demonstrating a consistent increase over the years.
Why the US government holds Bitcoin
It’s important to clarify that the U.S. government’s Bitcoin holdings are not the result of purchases but enforcement actions. These seizures typically occur in response to illegal activities.
Spikes in the amount of Bitcoin held by the US government are associated with the biggest BTC-related enforcement actions. Notable instances include the Silk Road vase and the Bitfinex hack.
Silk Road (2013):
One of the most notable cases involved the seizure of approximately 174,000 bitcoins from Silk Road, a dark web marketplace. The FBI shut down Silk Road and arrested its founder, Ross Ulbricht. In a dramatic twist, the US government later seized over $1 billion worth of Bitcoin linked to Silk Road, found in a previously undiscovered wallet holding approximately 69,370 bitcoins.
Bitfinex Hack (2016):
In August 2016, hackers breached Bitfinex, a prominent cryptocurrency exchange, stealing approximately 120,000 BTC, valued at around $72 million.
Years later, in February 2022, the Department of Justice announced the recovery of a significant portion of the stolen Bitcoin, valued at over $3.6 billion. This marked the largest recoveries of stolen crypto in history.
Other notable seizures
While Silk Road and Bitfinex are among the most prominent cases, several other significant seizures have occurred. In 2017, the US seized bitcoins worth $4 million (currently valued at over $60 million) from the BTC-e exchange during a multi-agency investigation into alleged money laundering activities. Alexander Vinnik, the alleged operator of BTC-e, was arrested.
Another notable case involves the 2020 seizure of assets from the founders of the BitMEX exchange for violations of the Bank Secrecy Act. Although specific amounts of Bitcoin weren’t disclosed, BitMEX handled large volumes of Bitcoin transactions.
Implications of Government Holdings
Monitoring the holdings of large Bitcoin stashes, such as those held by the U.S. government, is crucial for several reasons.
Firstly, the decisions surrounding whether and when the government moves these Bitcoins could significantly influence market dynamics. The method of their…
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