The United States has a history of convicting criminals and ridding them of illicit funds stolen in units of bitcoin. However, the government has shown itself to be “paper hands” as it quickly sells off these bitcoins and redeems them as fiat currency.
In an analysis curated by Jameson Lopp, the co-founder and chief technology officer (CTO) of Bitcoin security provider Casa, the U.S. government has missed out on profits worth about $5 billion, as it didn’t hold on to the seized bitcoins.
(Source: Jameson Lopp Github)
U.S. Government Misses Near $5B Profit in BTC
Per the records, the U.S. government has confiscated and sold a total of 195,091.75 BTC since 2014 until date. The total amount in the U.S. dollar equaled $366.4 million. Although this amount may seem substantial, it pales in comparison to the potential value of $5 billion if the government had held onto the assets to date.
Jameson Lopp identified 14 separate instances of the U.S. government selling BTC, with the most notable being the $215 million obtained from the then-online black market Silk Road heist in 2012. The platform was hacked for over 50,000 BTCs by James Zhong. The stolen BTCs were worth $1 million at the time of the attack.
Last November, the U.S. government confiscated the stolen BTCs, worth $3.4 billion at the time. Presently, the government retains possession of 41,500 BTCs from the incident.
Will It End?
The U.S. government will continue to apprehend more bad market players and confiscate cryptocurrencies stolen. Recent reports confirm this. However, it is in the government’s hands to decide whether it will stick to a HODL policy or keep on selling off the BTC holdings.
Meanwhile, the U.S. government has shown a mixed approach toward the embrace of digital currencies like Bitcoin. Several American crypto public figures like Coinbase’s Brian Armstrong have previously stressed this in the past. They believe that the government needs to outline a clear and detailed regulatory framework that will govern the use of crypto in the country.
