The U.S. government, a significant Bitcoin holder, has accumulated approximately $5 billion in the cryptocurrency through three primary seizures: Silk Road (69,369 BTC), Bitfinex Hack (94,643 BTC), and James Zhong (51,326 BTC), according to data from 21.co. The acquired Bitcoins are securely stored in offline hardware wallets and are managed by the Department of Justice and IRS until a final forfeiture order issued by a court permits the U.S. Marshals Service to take ownership.
Jarod Koopman, working with the IRS's cyber and forensics services section, explained that although government Bitcoin sales could trigger crypto price fluctuations, they do not manipulate the market or hold onto assets for future profitable sales. The government employs crypto exchanges like Coinbase (NASDAQ:COIN) to sell seized tokens, as was demonstrated when it offloaded 9,118 BTC in March 2023.
This method of managing seized Bitcoin will be a central discussion point at Benzinga's Future of Digital Assets conference. The U.S. government's approach to handling these assets is crucial to maintaining market stability and ensuring fair practices in the dynamic and volatile world of cryptocurrency.
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