The US government has seized approximately 200000 Bitcoins from cybercriminals and has one of the world's largest hiding places for Bitcoins. However, Uncle Sam seems not to be in a hurry to clear his fat pile and unintentionally occupies the position of lazy holder
The US government has seized approximately 200000 Bitcoins from cybercriminals and has one of the world's largest hiding places for Bitcoins. However, Uncle Sam seems not to be in a hurry to clear his fat pile and unintentionally occupies the position of lazy holder.
The federal government holds approximately $5.4 billion worth of Bitcoin. If liquidated, such a large reserve will definitely affect the market and increase selling pressure.
Not in a hurry to sell
On October 15th, The Wall Street Journal conducted an in-depth study of government held Bitcoin. The report points out that the United States' rate of converting its reserves of Bitcoin into US dollars is extremely slow.
Furthermore, it seems that it did not intentionally hold higher prices, it pointed out.
This pile of Bitcoin is more a byproduct of lengthy legal proceedings than a strategic plan
We don't play market games, "said Jarod Koopman, Executive Director of the Network and Forensic Services Division of the US Internal Revenue Service." We basically determine based on the timeline of the process
BTC is stored offline in a hardware wallet controlled by agencies such as the Ministry of Justice and the Internal Revenue Service (IRS).
In addition, due to lengthy investigations and legal procedures, it may take several years from initial seizure to liquidation. This sometimes allows the government to benefit from the appreciation of Bitcoin prices.
Once the case is completed, the bailiff's office will liquidate Bitcoin and distribute the proceeds to the victims or pay for the investigation fees.
Early settlements were completed through auctions, but now exchanges like Coinbase are used. Decentralized sales at the judicial police station to avoid market impact.
Nicolas Christin, a computer science professor at Carnegie Mellon University, commented:
The government's actions to dispose of these assets are usually very slow because they require extensive due diligence, cases are often complex, and there is a lot of red tape
In the most recent sale in March, the government sold 9861 Bitcoins through Coinbase. Our goal is to dispose of assets in a timely manner at fair market value, "said a government spokesperson
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