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US law enforcement officials announced Monday that the US Department of Justice (DOJ) seized “approximately 50,676.17” bitcoin from a Silk Road thief. The latest seizure adds to the buffer of bitcoins the US government has today, as three seizures in the past two years have left a holding of around 214,682 bitcoins worth $4.22 billion using today’s bitcoin rates.
The US government has a large stockpile of bitcoin after three major confiscations in the past two years. The first major seizure revealed was back in November 2020, when the DOJ detailed that it confiscated 69,370.22 BTC worth over $1 billion at the time. Today, the stash that was seized from a person called “Individual X” is worth $1.36 billion.
Then on February 1, 2022, onchain analysts noticed that 94,636 BTC were consolidated into a single address. The coins originated from the 2016 Bitfinex hack, and less than a week later, US law enforcement officials announced that the funds had been seized and two people (Ilya Lichtenstein and Heather Morgan) had been arrested. The more than 94K BTC seized from Morgan and Lichtenstein is worth $1.86 billion today.
The latest seizure from the Silk Road thief is the third major stash the US government has confiscated since the Individual X seizure. The recently seized Silk Road bitcoins are worth $997 million using today’s BTC rates. All three caches add up to a total of 214,682 BTC, which is 1.02% of the 21 million limited bitcoin supply. The US government has more bitcoin than Microstrategy’s 130,000 BTC stash and Block.one’s 140,000 BTC cache.
The only publicly known holder of bitcoin (BTC) with more tokens than the Feds is Grayscale’s Bitcoin Trust (GBTC), which holds 643,572 BTC today. It is currently unclear when the US government will decide to auction the large cache of BTC it holds, as it has not held any major BTC auctions for a long time. The US government, leveraging the General Services Administration (GSA), auctioned $377,000 worth of BTC and LTC in June 2021. Additionally, there were a number of small, government-sponsored BTC auctions prior to 2021 as well.
Interestingly, the US government has had many chances to sell at least some of the cache of bitcoins for much more than they are worth today ($4.22B). For example, the first large hoard discovered in November 2020 could easily have sold for $50K to $60K per BTC, and the seized Bitfinex coins could also have sold for $30K to $40K per BTC. Historically, the US government has sold seized BTC at a loss, compared to the values that could have been achieved if they were sold at a better exchange rate.
It is not the first time the US government has been the largest bitcoin holder, as it was once the largest since it held Silk Road bitcoins confiscated during the seizure in 2013. The forfeited bitcoins were later auctioned in 2014 and some of the bitcoins was bought by investors such as Tim Draper.
What do you think about the US government’s large holdings of bitcoin? Let us know what you think about this topic in the comments section below.
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