The U.S. government is indeed offloading seized Bitcoin through auctions, but this process is complex, lengthy, and carefully managed rather than a simple immediate sale. Over recent years, the U.S. has accumulated a significant amount of Bitcoin through law enforcement seizures tied to criminal activities such as fraud, money laundering, and cybercrime. The most notable recent case involved the seizure of approximately 127,000 Bitcoin, valued at nearly $15 billion, from a large-scale criminal operation known as the “Prince Group,” which was involved in a “pig butchering” scam—a type of cryptocurrency fraud where victims are manipulated into sending funds before being defrauded[2][6].
When the government seizes Bitcoin, it does not immediately own or sell the assets. Instead, the seizure marks a legal claim while investigations and court proceedings determine the legitimacy of the seizure and the rightful disposition of the funds. This process can take many years—sometimes five to ten years—because authorities must identify and compensate victims before any remaining assets can be retained or sold by the government[1].
Historically, the U.S. Marshals Service has managed the auctioning of seized Bitcoin. These auctions are public and allow buyers to bid on Bitcoin that the government has forfeited after legal processes conclude. For example, the U.S. government has auctioned Bitcoin seized from cases like Silk Road and Bitfinex, making it one of the largest holders of Bitcoin globally due to these judicial seizures[4].
In March 2025, former President Donald Trump signed an executive order establishing a strategic Bitcoin reserve for the U.S. government. This reserve is intended to hold cryptocurrencies seized from criminals rather than immediately liquidating them. The rationale is that holding these assets could provide economic benefits as the value of Bitcoin and other digital assets potentially appreciates. Treasury Secretary Scott Bessent has indicated that the U.S. already holds between $15 billion and $20 billion in forfeited Bitcoin, which could be part of this strategic reserve[3].
The creation of this reserve signals a shift in how the government views seized cryptocurrencies—not just as assets to be sold off quickly but as potential strategic financial resources. Other countries, including El Salvador, Bhutan, the Czech Republic, and Sweden, are also exploring or have established similar crypto reserves[3].
Despite this strategic approach, the government continues to conduct auctions to offload some seized Bitcoin. These auctions serve multiple purposes: they help convert illicit assets into usable funds, support victim restitution, and maintain liquidity in the market. However, the volume and frequency of these auctions depend on ongoing legal outcomes and policy decisions.
In summary, the U.S. government is actively managing a large portfolio of seized Bitcoin, balancing between holding assets in a strategic reserve and offloading portions through auctions. The process is governed by legal, financial, and policy considerations, making it a gradual and carefully controlled operation rather than a rapid sell-off.