United States law enforcement officials announced on Monday that the U.S. Department of Justice (DOJ) seized “approximately 50,676.17” bitcoin from a Silk Road thief. The latest seizure adds to the cache of bitcoins the U.S. government holds today as three forfeitures during the last two years have led to a stash of around 214,682 bitcoin worth $4.22 billion using today’s bitcoin exchange rates.
After 3 Major Forfeitures, U.S. Law Enforcement Officials Hold More Than 1% of Bitcoin’s Capped Supply
After three large confiscations in the past two years, the U.S. government now has a substantial bitcoin stash. In November 2020, the DOJ revealed that it had confiscated 69.370.22 BTC, which at the time was valued over $1 billion. Today, the stash seized from a person dubbed “Individual X” is worth $1.36 billion.
On February 1, 2022, the onchain analysts saw 94,636 BTC merge into one address. These coins were obtained from Bitfinex’s 2016 hack. Less than one week later, U.S. authorities explained that funds had been seized and Heather Morgan and Ilya Lichtenstein were both arrested. Morgan and Lichtenstein were able to seize more than 94K BTC. Today they are worth $1.86billion.
This is the third largest stash that the U.S. government confiscated from Silk Road thiefs since Individual X forfeiture. The recently seized Silk Road bitcoins are worth $997 million using today’s BTC exchange rates. These three caches total 214,682 BTC. This is 1.02% of 21 million bitcoins. The U.S. government holds more bitcoin than Microstrategy’s 130,000 BTC stash and Block.one’s cache of 140,000 BTC.
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’s currently unclear when the U.S. government will decide to auction the large cache of BTC it holds, as it hasn’t held any major BTC auctions in quite some time. In June 2021, the U.S. government auctioned $377K worth LTC and BTC using the General Services Administration (GSA). Additionally, there was a series of smaller government-sponsored BTC auctions that took place prior to 2021.
The U.S. government had many opportunities to sell some bitcoins at a fraction of their current value ($4.22B). The first large-scale bitcoin stash found in November 2020 might have been easily sold at $50K-60K per Bitcoin, while the Bitfinex coins could also have been sold for between $30K and $40K per Bitcoin. In the past, the U.S. government had sold seize BTC for losses compared with the potential gains if the exchange rate was better.
It’s not the first time the U.S. government has been the largest bitcoin holder, as it once was the biggest back when it held Silk Road bitcoins confiscated during the seizure in 2013. Investors like Tim Draper bought some bitcoins from the forfeited Bitcoins and sold them at an auction later in 2014.
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