The US government may not come to mind when one is looking to buy large quantities of Bitcoin; but the country has sold off nearly 185,000 Bitcoins already. Where did it all come from? The secret stash of Bitcoins, and other cryptocurrencies, that the US is selling are blocks of tokens that have been seized from those running criminal operations. The next block of Bitcoins to be sold is of over 4,000 tokens that are worth around $56 million at current prices.
“It could be 10 boats, 12 cars, and then one of the lots is X number of Bitcoin being auctioned,” said Jarod Koopman, director of the Internal Revenue Service’s cybercrime unit.
But the stash of Bitcoins and other cryptographic assets that the US enforcement agencies have been seizing has only been growing at an exponential rate. The Federal Bureau of Investigation, Homeland Security, the Secret Service, the Drug Enforcement Agency, or the Bureau of Alcohol, Tobacco, Firearms and Explosives can all be involved in the process, which has seen Uncle Sam seize over $1.2 billion in assets in the current fiscal year.
“In 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, we’re at $1.2 billion,” Koopman had told CNBC in August. The amount of crypto assets in holding has grown so much that the US Department of Justice has even brought in private players to aid the government in maintaining and storing the assets that are being seized.
Seized assets come from cases of fraud, theft, crime, illegal operations like drug trafficking and other criminal activities. The crypto assets associated with each case are only sold once the criminal investigation has been concluded and the judicial proceedings closed.
(Edited by : Shoma Bhattacharjee)