In a startling revelation, The Wall Street Journal has reported that the U.S. federal government possesses a staggering $5 billion in Bitcoin. This enormous cryptocurrency reserve is an unintended outcome of the government’s relentless drive against cybercrime and illicit online ventures.
📰 Tracing the Origin of the Fortune
The U.S. government’s vast Bitcoin collection is a result of numerous high-profile operations targeting cybercriminal activities and clandestine online platforms.
One significant case was the intervention in the Bitfinex cyber attack, a lengthy operation that took almost six years to conclude. This effort led the Justice Department to acquire a substantial Bitcoin amount.
Another major operation was the 2013 shutdown of the infamous online drug bazaar, Silk Road. This action enabled the government to confiscate a large number of bitcoins.
Further contributions to the government’s Bitcoin vault came from operations against individuals and entities engaged in cybercrimes. The cases against Ilya Lichtenstein and Heather Morgan, his wife, are prime examples. As The Wall Street Journal points out, these instances are merely a glimpse, with countless other operations continually augmenting the vast reserve.
📰 The Liquidation Process
After the government seizes Bitcoins from unlawful sources, a comprehensive legal procedure follows, which can sometimes stretch over several years. For instance, the legal proceedings related to the Bitfinex cyber attack took nearly six years before the Justice Department could claim the assets.
Once the legal matters are resolved, the task of liquidating these assets falls to the U.S. Marshals Service. Initially, the preferred method was auctions. In the past, these auctions have been profitable for buyers, with industry giants like Tim Draper being notable beneficiaries.
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