The US government has been seizing and selling bitcoin for the past 10 years, accumulating BTC worth $8 billion and generating more than $640 million from selling it. Where did all these bitcoin come from?

The US government has announced plans to sell nearly $118 million in bitcoin seized from Ryan Farace, a US Secret Service special agent convicted in 2015 of laundering drug money using bitcoin on Silk Road, the popular dark web marketplace.

The US government is one of the largest Bitcoin holders in the world, with a current balance of more than 200,000 BTC, worth approximately 8 billion dollars. Since the judicial process was launched, less than 5% of this haul has been offered for sale. These reserves represent approximately 1% of all BTC currently in circulation, making the US government one of the largest cryptocurrency investors in the world.

They were confiscated mainly from cybercriminals operating on the Silk Road, as the possibility to do transactions in total anonymity and the decentralisation of this cryptocurrency made it a very attractive option for criminals involved in activities such as money laundering, drug trafficking or ransomware attacks.

The US government holds this BTC mainly offline, in encrypted and password-protected storage devices controlled by the Department of Justice, the Internal Revenue Service or other government agencies.

It could get much better returns

The sales of these bitcoin reserves are done through public auctions, which allow the government to dispose of its bitcoin holdings gradually and without distorting the price of the cryptocurrency on the markets.

Although these auctions have generated more than $640 million, the government seems uninterested in maximising the proceeds. Some analysts believe it has missed out on billions of dollars by not selling later and acting as a novice in cryptocurrency trading.

But in any case, it is generating significant revenue from these transactions. You can do the same with Bitvavo, the exchange platform that 11Onze Recommends, which allows you to trade with more than 200 digital currencies. The recent entry into play of Bitcoin ETFs and the halving that will take place in May this year could push the value of this cryptocurrency up considerably by the end of 2024.

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