The U.S. government has indeed seized a massive amount of Bitcoin in recent years, including a record $15 billion worth of Bitcoin from a major cyber fraud operation linked to a transnational criminal organization based in Cambodia. This seizure involved approximately 127,000 BTC and is considered the largest asset forfeiture in history involving cryptocurrency. However, the question of whether the U.S. government is selling seized Bitcoin again is more complex and nuanced.
The seized Bitcoin primarily comes from judicial actions against criminals involved in scams, fraud, hacking, and other illicit activities. Notable cases include the Silk Road seizure in 2013, the Bitfinex hack seizure of 94,000 BTC in 2022, and the recent $15 billion seizure from the Chen Zhi cyber fraud case. These assets are held by federal authorities such as the FBI, the Department of Justice (DOJ), and managed in government wallets, sometimes under the custody of the U.S. Marshals Service, which has historically conducted public auctions to sell seized cryptocurrencies[1][3][4].
Despite these seizures, the government does not immediately own or control the Bitcoin outright. The assets are subject to lengthy legal processes to determine rightful ownership, compensate victims, and resolve claims. This means that even after seizure, the Bitcoin is often held in custody for years before any final disposition is made. Experts estimate that this process can take five to ten years or more, reflecting the complexity of asset management and victim restitution in cryptocurrency cases[1].
Regarding sales, the U.S. government has sold seized Bitcoin in the past through auctions managed by the U.S. Marshals Service. These auctions have been a way to liquidate assets linked to criminal cases, converting Bitcoin into fiat currency. However, recent developments have introduced the idea of a strategic Bitcoin reserve for the U.S. government. Following a 2020 executive order by former President Trump, there is a proposal to hold some seized Bitcoin as part of a national reserve rather than selling it immediately. Treasury officials have expressed interest in expanding this reserve using confiscated assets, but much of the seized Bitcoin remains in legal limbo, awaiting final forfeiture and victim compensation[1][2].
Legislative efforts by some U.S. senators, such as Cynthia Lummis, aim to prevent the government from selling seized Bitcoin altogether. Lummis has proposed laws to bar sales and instead use seized Bitcoin to strengthen a strategic reserve, turning criminal proceeds into a national asset. She also advocates for clear policies on how seized Bitcoin is stored, returned to victims, and safeguarded for future generations. These proposals reflect a growing recognition of Bitcoin’s value as a strategic asset rather than just a liquidated commodity[2].
In summary, while the U.S. government has historically sold seized Bitcoin through auctions, the current situation is evolving. Large recent seizures, such as the $15 billion case, are still undergoing legal processes, and there is increasing interest in retaining seized Bitcoin as part of a strategic reserve. Legislative and executive actions suggest a shift away from routine sales toward more strategic management of these assets. Therefore, the government is not broadly selling seized Bitcoin again at this moment but is instead navigating complex legal, policy, and strategic considerations before deciding the ultimate fate of these holdings.