The US government has been seizing and accumulating cryptocurrencies from cyber crime for a number of years, and then auctioning them off at sub-par market conditions.
US authorities have been acquiring a record amount of cryptocurrencies over a span of multiple years, all of which has been seized from illicit cyber activities. “In fiscal year 2019, we had about $700,000 worth of crypto seizures. In 2020, it was up to $137 million. And so far in 2021 (as of August), we’re at $1.2 billion,” said IRS cybercrime unit director Jarod Koopman to CNBC.
The US Marshall Service, which is primarily responsible for auctioning off the seized cryptocurrencies, has thus far acquired over 185,000 bitcoins, worth approximately $8.6 billion at today’s market prices. But, as CNBC points out, the government has not exactly been timing its crypto sales to ideal market conditions: back in 2018, authorities sold 500 bitcoin to Riot Blockchain for approximately $5 million, which is now worth over $23 million. Likewise, another 30,000 bitcoin was sold to billionaire venture capitalist Tim Draper at a paltry price tag of $19 million in 2014, which today would fetch for more than $1.3 billion.
The proceeds from the bitcoin sales have been kept in the Treasury Forfeiture Fund, or the Department of Justice Assets Forfeiture Fund. As Koopman reveals, funds from the seized cryptocurrencies are responsible for about 60% to 70% of entirety of the Treasury Forfeiture Fund, making them one of the largest single contributors.
Once deposited in either one of the two funds, government officials decide how to allocate the money: for example, Congress has the power to revoke the proceeds and transfer it to other projects. “Agencies can put in requests to gain access to some of that money for funding of operations,” said Koopman.
Information for this briefing was found via CNBC. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
