If you check the US government’s history of crypto relations, you can see it’s a hate affair. The SEC is hellbent on ruining the crypto market, slapping businesses and individuals with all kinds of charges. However, the reality might be truly different after all. Per a new report, it turns out that the government is one of the largest HODLers in the world, owning around 200,000 Bitcoins that are worth well over $5 billion.
This is a surprise that caught everyone off-guard. No one could have thought that the US government has that kind of Bitcoin in crypto wallets, although it didn’t just buy the dip like El Salvador does.
Where Did All the Bitcoin Come From?
According to a recent report the largest portion of those coins came from 3 high-profile crackdowns. Those include the Silk Road seizure in late 2020, coins confiscated from the Bitfinex hack in early 2022, and a collection of over 51,000 BTCs from James Zhang secured in March 2023. A considerable—although undisclosed—number of Bitcoins was also seized from Ilya Lichtenstein and his wife.
Now, many might think that the US government holds the stockpile in crypto wallets just like any crypto holder does. That’s not the case. When you have a Bitcoin or two, crypto wallets might be suitable for a smaller amount. However, such a large amount should be protected in another way, and that way are offline or cold (hardware) wallets. These are managed by the Justice Department and the IRS, so hackers will have a pretty hard time entering the stash. Not to mention the legal repercussions later.
What’s strange about this massive stockpile of BTC is that the country has never been a fan of cryptocurrencies. It has repeatedly been trying to banish crypto holders and hurt businesses that involve crypto. Cryptocurrencies are not legalized per American law, and the Securities Exchange Commission – the one responsible for handling the legal aspects, is a hardcore opponent of cryptocurrencies.
It shows that the government has a love it or hate it affair. You can be sure that it won’s just give away over $5 billion worth in Bitcoin, and will instead most likely put it to use on some of its capital projects.
More Bitcoins Than Tesla and Microstrategy
The difference between the US government stash of Bitcoins and regular crypto traders is that the stash isn’t affected by price swings. It hasn’t been obtained in the regular way and it isn’t an investment strategy. Instead, the coins have been taken as a result of lengthy legal procedures, and their value is set. Jarod Koopman, a senior IRS executive, says that the government’s stash depends on timelines instead of market trends.
Overall, the government’s Bitcoin stash is higher than many other large holders. It goes over Microstrategy’s stash which is in the 158,000 range, and Tesla’s Bitcoin stock of nearly 11,000. Of course, the stash doesn’t just belong to the government. The confiscated BTC is seized and controlled by the US Marshals Service.