Authorities in the US, UK, Germany, and El Salvador collectively hold $18 billion worth of BTC

What’s new? According to the blockchain analytics platform Arkham Intelligence, crypto wallets controlled by authorities in the US, UK, Germany, and El Salvador collectively hold bitcoins worth $17,8 billion at current exchange rates. The first three countries obtained the coins as a result of seizures in criminal cases, while El Salvador purchases the coins on its own.

Arkham Intelligence data

What else is known? The largest share of this amount belongs to the US authorities: their wallets hold $12 billion worth of coins, mostly confiscated from the creator of the Silk Road darknet marketplace Ross Ulbricht, and the site’s drag dealers and hackers. The operation to seize assets from hackers in 2021 was the largest bitcoin seizure in history.

Since 2014, the Marshals Service within the US Department of Justice has repeatedly sold the seized coins through auctions; officials currently prefer over-the-counter (OTC) marketplaces for this purpose. The authorities do not announce the timing of upcoming sales from these stocks to prevent possible market manipulation.

The UK is the second-largest bitcoin hoarding country with a figure of $3,3 billion, and a significant portion of this amount is also related to law enforcement operations. For example, in 2021, police seized $250 million worth of cryptocurrency as part of a money laundering investigation.

The HM Revenue and Customs (HMRC) also auctioned the coins. On April 26 this year, an amendment to the Economic Crime and Corporate Transparency Act 2023 came into force in the UK, allowing authorities to freeze criminal crypto assets without conviction and burn them if necessary.

Germany has an estimated $2,2 billion in bitcoin holdings. In January this year, the authorities conducted the largest bitcoin seizure in the country’s history: 50 000 BTC were seized during an investigation into tax violations of sites with pirated content.

Previously, German authorities preferred to keep the seized assets, but in February this year announced plans to sell the coins worth more than $1 billion.

Since June 19, officials have sold $435 million worth of coins through several exchanges including Coinbase, Kraken, and Bitstamp, which was likely one of the reasons why BTC fell below $60b000 earlier this month.

The founder of blockchain TRON and head of exchanges HTX and Poloniex suggested buying back bitcoins from Germany as part of OTC deals to eliminate selling pressure. MP Joana Cotar called on Chancellor Olaf Scholz to stop the “hasty” and unwise sale of the asset and keep it in the state treasury to protect it from inflation.

As for El Salvador, which was the first to recognize bitcoin as legal tender back in 2021, local officials are purchasing the asset on their own as part of President Nayib Bukele’s strategy.

Here, bitcoin is seen as a strategic investment, and the authorities not only regularly purchase the asset, but also do their own mining. Right now, the government’s wallets hold $314 million worth of coins.