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US Gov. Has been Holding Thousands of Bitcoins & This is What They are Doing with Them!

The US Government has auctioned 185000 bitcoins to date.

Like any government, the United States Government auctions any assets it seizes. The same is the case for bitcoins or any other cryptocurrency.

The US Marshalls Service is the agency entrusted with the responsibility of auctioning seized crypto assets.

An advertisement by US Marshalls Service for Bitcoin auction.

To date, it has auctioned off 185000 bitcoins worth $8 billion, according to a CNBC report. Most of it was sold in batches well below today’s market prices. This is not the only crypto it has auctioned.

The practice of auctioning off crypto, in blocks, at fair market value, is not expected to change, according to Jarod Koopman, director of the Internal Revenue Service’s cybercrime unit.

Taking Help from Private Sector

The enforcement agencies are not as skilled as the criminals.

“The government is usually more than a few steps behind the criminals when it comes to innovation and technology,” said Jud Welle, a former federal cybercrime prosecutor.

This kind of scenario is not part of the basic training, but in the coming years “there will be manuals edited and updated with, this is how you approach crypto tracing, this is how you approach crypto seizure”, added Welle.

Currently, the Government is taking the help of the private sector to manage the storage and sales of its hoard of tokens.

In July, the Department of Justice hired San Francisco-based Anchorage Digital to be its custodian for the cryptocurrency seized or forfeited in criminal cases.

Where do the proceeds go?

After the confiscated assets are auctioned, the proceeds are typically deposited into one of two accounts: The Treasury Forfeiture Fund or the Department of Justice Assets Forfeiture Fund.

Koopman revealed that crypto assets constitute roughly 60% to 70% of the Treasury Forfeiture Fund, making it the largest individual contributor.

“The underlying investigative agency determines which fund the money goes to,” said Sharon Cohen Levin, who worked on the first Silk Road prosecution and spent former Chief of the Money Laundering and Asset Forfeiture Unit in the U.S. Attorney’s Office for the Southern District of New York.

Post that the funds are devoted to different projects.

“Agencies can put in requests to gain access to some of that money for funding of operations,” said Koopman. “We’re able to put in a request and say, ‘We’re looking for additional licenses or additional gear,’ and then that’s reviewed by the Executive Office of Treasury.”

Rather than seizing and keeping the crypto assets with itself, the US Government is auctioning them off and using the proceeds for public projects. So, the Government is also benefitting from crypto assets albeit not directly. In future, Governments could be seen using crypto assets as reserve assets in their sovereign funds.

News recommendation: 2021 Saw More Investments in Crypto than All Previous Years Combined

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