Alex Dovbnya
The Wall Street Journal has revealed that the US federal government owns a staggering $5 billion worth of Bitcoin following strategic actions against cybercrime and darknet activity
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Contents
- How the US government amassed its Bitcoin fortune
- How it sells Bitcoin
A recent report from the Wall Street Journal revealed that the US federal government has a staggering $5 billion in Bitcoin, the world’s largest cryptocurrency. This massive cryptocurrency fortune is a byproduct of the government’s aggressive efforts to prevent cybercrime and illegal online activities.
How the US government amassed its Bitcoin fortune
The huge Bitcoin supply under the control of the US government is due to several high-profile operations and raids against cybercriminal activities and darknet platforms.
A notable example was the intervention in the Bitfinex cyberattack, which lasted almost six years and resulted in the Department of Justice securing a significant amount of Bitcoin.
The infamous shutdown of online drug marketplace Silk Road in 2013 also allowed the government to confiscate large amounts of Bitcoin.
In addition, other operations involving individuals and organizations involved in cybercrime, including the cases against Ilya Lichtenstein and his wife Heather Morgan, contributed to the increase in the government’s stockpile. These measures, as the Wall Street Journal details, represent just the tip of the iceberg, while many other measures continue to add to the enormous reserve.
How it sells Bitcoin
After the confiscation of Bitcoins from illegal sources, a meticulous legal process follows, which can sometimes take several years. For example, it took nearly six years for the legal machinations surrounding the Bitfinex cyberattack to come to a conclusion and for the Justice Department to finally take control of the assets.
Once the legal aspects are resolved, the US Marshals Service assumes responsibility for liquidating these assets. The initial preferred strategy was auctions, which had proven lucrative in the past for buyers such as venture capital legend Tim Draper.
About the author
Alex Dovbnya
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience reporting on everything related to the emerging industry – from price analysis to blockchain disruption. Alex has written more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He is particularly interested in the regulatory trends around the globe that are shaping the future of digital assets. He can be contacted at [email protected].