Key facts:
The State profits from the sale of BTC, but keeps how much it owns secret.
The whereabouts of the 94,000 bitcoin seized from the Bitfinex theft are unknown.
The United States seized almost 70 bitcoins (BTC) from Silk Road in November 2020 and is now capitalizing on a 145% gain relative to the price of the crypto asset today. By appropriating funds handled by crypto-related crime, the US government may be amassing a fortune
The Silk Road seizure was the second largest bitcoin seizure ever by the US feds. At that time, some USD 1,000 million of the Dark Web market remained in the hands of the Department of Justice, when the price of the cryptocurrency was in the order of USD 15,500. Now, with BTC at $38,600, the 69,000 cryptocurrencies equals more than $2.6 billion.
It means that the confiscation of bitcoin would be yielding a windfall, or not, for the State, given that cryptocurrencies remain under the power of federal authoritiesproduct of bureaucratic causes, as point out international media.
Bitcoins remain in the hands of the authorities and in the year since then, the cryptocurrency has appreciated more than 140%. Even the return could be higher as the cryptocurrency reached a record price of $67,600 in November last year, although its value has declined in recent months.
Apparently the government now holds the bitcoin it seizes since he would have noticed that it was a way to get higher profits. Previously the bailiffs of The United States auctioned 187,300 bitcoins in nine auctions since 2014 for an amount that did not exceed USD 200,000. This without realizing that today that amount of BTC would give the State benefits in the order of USD 7,000 million, said a reporter from NBC News.
Proceeds from bitcoin auctions are sometimes deposited into the Treasury Forfeiture Fund or the Division of Justice Property Forfeiture Fund, and used to aid future investigations.
The US government is not transparent about its holdings in bitcoin
But not many things are managed with total transparency by the United States government and that is shown by the site Forfeiture.govwhich records the administrative, civil and criminal actions that involve some confiscation by the Department of Justice.
The site should normally be the place to go for information on the total amount of bitcoins held by the government. But, there is a delay between the date of publication of an online report and the seizure dates.
Reports are also not archived online and no paper copies are made. What’s more, the bitcoin addresses that link the wallets to the owners are also not availablewhich makes the situation even more confusing and makes it clear that the government is not as transparent about its bitcoin holdings as it asks its citizens to be.
As an example, fortune found that 322 bitcoins were seized from a marijuana dealer in Texas in 2014, but there is no record of their sale.
The note also references the bitcoin loot of Alexandre Cazes, who authorities say operated the dark web marketplace AlphaBay, which is now is the property of the US Department of Justice., which seized it during a global covert operation.
“The agency plans to sell it, and since the value of bitcoin has increased more than fivefold since then, it could make a big windfall. But if you want to find out who has those coins or when they are being sold, you will need extensive cyber detective skills and a lot of free time. Once in government hands, this digital treasure disappears behind a cloak of secrecy.” points to the note.
Where will the seized bitcoins from Bitfinex go?
Apparently it is impossible to trace the bitcoins that the United States government keeps in its possession. Therefore surely no one will know what will happen to the 94,000 BTC that were seized during the first days of February and that belonged to the users of the Bitfinex exchange, hacked in 2016.
After the hack occurred, Bitfinex pooled all the losses from its users’ accounts and credited BFX tokens to its clients in a ratio of 1 BFX token to 1 lost dollar, a measure that did not end up benefiting users.
In fact, after appropriating the funds, the government of the The United States re-entered the exclusive club of bitcoin super whalesas reported by CriptoNoticias.
Although it is not possible to determine how long the State will keep the confiscated bitcoins, what is it is clear that the country confiscated 8 times more bitcoin in 2021 than in 2020. This is because it tracks cryptocurrency transfers for tax evasion, false tax returns, and money laundering.