Bitcoin Forum

Just days after The US Treasury secretary Scott Bessent announced that the country which is actually setting up a bitcoin strategic reserve is not looking to buy bitcoin. With the intent of actually keeping the 200k bitcoin which is heavily reported to seized bitcoins in their possession as reserve.

Just after that a blockchain analytics platform Arkham reported that $300k value of coins have been moved to the government account from coinbase and it was reported to be siezed from an Hacker


Even though this is not bitcoin but is this the new method of which US are trying build their own reserve by holding siezed assets

My question is; is this actually right? I think this assets are supposed to auction or sold off?

Does Not buying bitcoin actually signifies that they don’t believe in bitcoin at all and are only fulfilling campaign promises.

They are just telling us that these seized coins are in a wallet in which we don't know for sure if truly they are there or just on the news we are hearing and nothing like that exists on the wallet, just imagine now that if such amount could be withdrawn from the wallet, how sure are we that the money remaining exists, who are those in charge and making withdrawals and for what purpose are they doing this.

Secondly, only US I see that can blast on what is not theirs and still claims an investment upon, using the confiscated coins from the public funds is totally a wrong approach to Bitcoin National Reserve, they have another agenda different from all these we are seing.

The scary part is how far are they going to go in considering an holdings worth seizing
It won't be surprised if innocent users would be affected.

What's the difference with what they are doing?
choosing not to sell now doesn't rule out the fact that they would in the future.

Bitcoin and Government, Weird mixture.

It's not a new method, and this is not just something done by the US; most governments have seized a significant amount of coins that are linked to whateverthey tag it as. As long as they consider it to be against their rules, they will seize it.

The only thing new here now is that they have suspended selling all the seized coins; rather, they choose to keep them instead as their reserve, but anything can still change in the future, and they may decide to auction it off.

The thing here is, individuals should just be careful not to mistakenly and unknowingly use their own hand to link their holdings to a government-targeted address that has been suspected to be linked to illicit activities because they will claim the coin, and the chance of the individual getting it back will be very slim.

Not necessarily IMO. I mean, why spend when you already have huge sats in limbo. In addition, I think this seizing can be pretty lucrative, I would guess more will come soon, and their bags will be bigger. Whether the platform deserves to be seized is a different story though.


They will sell it off at some point, but for now they will hodl.

This recent news is big deal. In past government would sell off criminal assets but now they are treating Bitcoin as long term strategic asset similar to gold. This decision is politically good because it allows them to build significant holding of digital asset without using taxpayer money which would be very risky. But this move does not mean government fully accept Bitcoin but creating this reserve showing they believe it will continue to be important in future even if they are not willing to buy it on open market.

Right? I think so. I don't see any reason why it's otherwise. Why does it have to be auctioned or sold? Those are seized in favor of the government. In other words, they're assets of the government now. What makes it wrong to keep them rather than sell them?

Don't mention about government genuinely believing in Bitcoin. That's not true. That'll never be true. The government itself is an antithesis to Bitcoin's philosophy.

Anyway, I don't think you have to worry about them not buying. They probably will at the right time. Also, it needs more than just an order from the president when the government uses money to buy Bitcoin for a strategic reserve. I guess it will have to pass through congress. And it's going to be hard. That's why the easy option is to accumulate Bitcoin without using taxpayers' money. Keeping seized Bitcoin is just one of them.

Right or not right thing to do, I don't know as it depends on many details.

If it is bitcoins seized from criminals and there is no victims that can claim their stolen bitcoins back, I think government can do it rightly. Oppositely if there are victims of those criminals, and they are waiting for final judgement from law suits in order to have rights to claim their bitcoins back, government will do unright action to use those bitcoins as the USA national Bitcoin strategic reserve.

Righ or not right action, Bitcoin is beneficial from this impactful strategic reserve as it reduces available bitcoin in free float on the market and reduce selling pressure too.

To be honest, I think your question is a bit silly. The government can do whatever it wants with seized assets. It usually auctions them off because the money is more useful than the assets. In other words, if it seizes trucks, real estate and tools, for example, it is more useful to sell them and use the money than to keep the assets. They also often seize cash, which they do not auction off. Have you ever thought about that?

So, if a certain type of asset is more useful to keep than to auction, it's normal for them to do so.

With Trump as president, the US has become something insignificant and gloomy. You can no longer be sure of anything. Maybe you are right about these funds. It is also possible that someone has appropriated them. If Americans do not wake up soon, then a national catastrophe is guaranteed. It is time to kick the red-haired old man in the ass and put him in the electric chair for all his deeds. We need to do this before it gets even worse. Cryptocurrencies are reacting well to the antics of this fool and not in the best way.

Also, they have laws for assets or things that were seized. They usually need to do what needs to be done.

Yes it's their right!

Yep, if we do it with these things, we can do it with BTC too.

Loopholes will be found anyways eventually :D

I believe that if there is a part of the asset that's collected via scamming people, the government should continue the investigation to find victims and give them back their money. They are getting very good at blockchain analysis, so they should be good at finding victims, too. Although I highly doubt they'll do this, it's a good idea to hold them because they are going to buy Bitcoin anyways, so why should they sell them? Btw I don't know if the law requires seized assets to be sold. This topic can be discussed very well by those who finished law at University.

Lots of money is laundered and unwisely spent that way. From my experience, the majority of similar organisations don't do things as we imagine they'll be doing. I have a neighbour who was working in a charity and as he told me, most of the money isn't really spent on those who need it but on those who are in charge of the organisation.

Donny is the one who makes the rules. He decides what’s right and what’s wrong so it is pointless to ask if what he is doing with the seized btc is right.

He might sell them, he might build a strategic reserve or a wealth fund with them. Who is going to tell him he is doing it wrong?

As long as he is doing something for the American people with those funds nobody can say anything which he seems to be doing exactly that.

In majority of cases they do sell seized assets, but afaik they don't have to do it if they think they can use it some other way, like for example seized cars. And even if there wa a rule that they have to sell it, they could easily change that law in order to keep whatever they want.


Let me ask you this: does them not selling seized bitcoin signifies that they "believe" in bitcoin?

Entities up above will think ten times before doing anything, and then choose what suits them (not the crypto space by any means) best. It was always like that and it will stay that way..

If there asset is in there position and no one can take it from them then yes they could able to do it especially if all legislators would agree on what their President want to happen.

Also they already made that decision and so far US is doing good for holding lots of Bitcoin coming from those seize assets they get from somewhere else.

But look at this they are also open on possibilities buying Bitcoin https://cointelegraph.com/news/us-treasury-still-exploring-budget-neutral-bitcoin-buys-secretary-says so for sure that they won't stop doing those things they currently done like relying on seize assets since for sure they are thinking about buying to increase their Bitcoin volume, remember they always want to be on top.

Profit and prestige are about to be made, suits would never lose such an opportunity, after all, Trump himself said one time that he wants BTC to be "US-made".

What I can make of this is that the US government seized those coins and of course those coins have to be transferred to a government wallet and not individual wallet. So since the strategy reserve policy or order is already in existence, it was plausible to hodl those coins there for the time being. From the post, we have not yet heard that they have finally converted it to their own reserve but seized them from hackers.

There are various reasons that government can seize assets, coins, fiat or gold and they are basically for economic control, if it is gotten through criminal acts like hacking, drug trafficking and other illegal means.

As for the current seizure, let's keep our fingers crossed probably it may be redistributed to owners if traceable, auctioned or at worse used for the economy.

Anything seized becomes the property of the government and they have to decide what they want to do with it. If they have a place in their constitution that specifies what seized assets will be used for then they should follow their rule of law. If you're looking from the moral angle then you can argue that the US government did not directly buy the seized cryptocurrency so they shouldn't keep it in their reserve. But others can raise a counter argument that immediately the coins were seized they automatically becomes a US property and they can choose to keep it. Anyway we don't know if the government has a timeframe to offload the seized coins in the near future, we'll wait and see.

The idea of ​​buying more bitcoin is not new, and Trump himself mentioned it on the day he signed an executive order establishing a strategic bitcoin reserve. He has ordered the Treasury and Commerce Departments to look into buying more bitcoin. But so far, they haven't figured out how and they're still leaving the door open to buying more bitcoin for a long time.

Honestly, I don't think they care about that and won't find a budget neutral way to buy bitcoin anytime soon without using taxpayer money. The only way they can buy bitcoin is to make bitcoin reserves "Act", otherwise there is no other way.

Depends in the laws in question and whether it really - needed - to do something around said laws..

As I remember, in Germany, for example, there are laws that directly state that what was seized should be converted to fiat eventually, and it was done with BTCs their governement seized, even though it would be better for it to be otherwise in the long run.

United States Treasury Secretary Scott Bessent made it clear that the US will not be buying more Bitcoin for its reserve. So the country will be depending on more seizures. This is a strange move since these Bitcoins have always been auctioned. I think the US law gives those in power to do whatever they want with seized assets.   

US to hold seized assets instead of buying Bitcoin for reserves. $300K crypto moved from Coinbase to government wallet—new strategy or just politics?

If truly fraudulent money are seized from the hackers to the treasury then its not a bad idea. Its better the money remains with the government rather than an institution belonging to someone.
Although, most of the money friezed might belongs to innocent investors who knows nothing about the whole thing. More investigations should be done, but in the meantime the reserve should hold the money.

I do think they would rather just turn seized crypto back into fiat, imo.

No law stops the US from using seized assets as strategic reserve instead of outright selloff like Germany did but what I find annoying is the noise Donald Trump made about it. He boasted so much as though US was going to invest heavily on Bitcoin to make up the strategic reserve only for us to begin to see that those boasting were seized assets and not Bitcoin purchases. I don't know how he is helping Bitcoin by transferring seized asset from the wallet of the law enforcement to maybe a new wallet managed by new body he will constitute to manage those assets.

I'm not defending Trump, but as far as I remember. During his campaign and after becoming president, he never claimed or boasted that the US would “invest heavily” in bitcoin. He just said he would create a strategic bitcoin reserve and would not sell any bitcoin, and make the US the crypto capital. He didn't brag or promise to buy more bitcoin.

The idea that the US will buy bitcoin is just over-expectation or, frankly, delusion on the part of some investors. Because anyone who understands the US constitution knows that buying bitcoin or any national reserve asset requires congressional approval. No one, not even the president, can make that decision on his own.


You ask, what has Trump done to help bitcoin and cryptocurrencies? At least he stopped the government from selling over 200kBTC onto the market, enacted a series of crypto-friendly regulations, something the Biden administration never did.

The march toward a brighter future with crypto overall can be called fuzzy, imo: sure, many words were spoken, some deeds were done, but in the end, more time is needed to see where itr all leads to.

We are at least not in the times where the regulations, heavier ones, would be imposed onto the space :D

Why should it be sold? Literally, it is still the same. United States will still be the owner of the money they receive after selling the coins. Also bitcoin is money as fiat but it is better than fiat because it is an appreciative asset. That makes it different from fiat. In my opinion, it is good how United States use the bitcoin confiscated as reserves. But what I do not like about it is that United States still supposed to buy more bitcoin and add it to the reserve.

It wouldn't be America if it weren't adept at playing both sides. It's always easy for them to create a scheme to pretend they're the victim and allow the assets to be laundered back into their pockets. So essentially Bitcoin as a national reserve is a headline to attract the attention of the bitcoin community, without the need to buy it.

Governments will never believe in BTC in the way we bitcoiners do, forget about that happening, how do you believe that a centralized government would fully believe in a decentralized currency. They understand the advantages of holding BTC and they do not want to be left behind, they also have a huge debt and they want to generate returns from a BTC reserve towards that, but as for believing in BTC the way a bitcoiner will, forget about it.

If they auction confiscated coins and use the funds to buy BTC, wouldn't that just be making the process longer. I do not see anything wrong in this process they have taken.

Yes they always want to be on top and even want to make their country a Bitcoin superpower but we saw that US Treasury Secretary Bessent mentioned that they will create a Bitcoin reserve but they will not purchase Bitcoin there because they will use confiscated assets to advance this strategic reserve. There was also a sensational news that the US President signed an executive order for a reserve, then it seemed like this country might buy Bitcoin to stay on top.

Even when the US Treasury Secretary refused to buy Bitcoin in a new way, the price of Bitcoin dropped significantly, as the price of Bitcoin fell to $119k at that time. This person also mentioned that the government would no longer purchase Bitcoin and he discussed the change in this country's approach to Bitcoin reserves and said that the government should stop selling (https://cointelegraph.com/news/treasury-secretary-scott-bessent-us-bring-btc-onshore) seized Bitcoin.

Bitcoin drops below $119K after US Treasury secretary rules out new BTC buys (https://cointelegraph.com/news/bitcoin-tanks-below-119k-bessent-gov-t-won-t-buy-bitcoin-reserve)

What difference would it make if the government auctions those seized bitcoins? There is no rigid rule anywhere that states what the government should do with seized bitcoins. Whether it is right or wrong is not something we should be bothered about, they have the right to decide what to do with it.

We can't really tell what the true intentions of the US government is for now. Their involvement in Bitcoin is obviously somehow politically motivated. If anyone thinks there are really no seized bitcoins anywhere, I am not going to argue with him. The US has not given us any reason not to doubt their intentions towards bitcoin. Maybe we would believe fully when they actually buy bitcoins and not rely on seized bitcoins.

From all logic, I do not believe or agree with the fact that a seized asset would be called a national reserve when it ought to be auctioned by the government, although I do not know the law in the United States, but in my country, seized assets are normally auctioned to the public for those interested to bid for it but converting it to national treasury or assets looks more like covetting a criminals proceeds.

The US can not publicly tell the world that they own or they invested in bitcoin; there has never been a time when it was captured in the news that they paid money for bitcoin as their reserve. They can not compare themselves to other countries that can talk publicly about their investment in bitcoin because they never made any financial commitment to it. So the US can not talk about reserves when they never bought any bitcoin with their money.  What they have is a seized asset, which they never bought with their money, so they should stop talking about national reserve when they have made any financial commitment for it.

Scott Bessent stated on August 14 that the United States will no longer buy bitcoin and will accumulate bitcoin through seizures. But just a day later, he retracted that statement and corrected that the US Treasury would look for solutions to buy more bitcoin to expand the reserve fund.

Unlike the German constitution, the US constitution allows the government to do whatever it wants with confiscated property. So we shouldn't be surprised that they decided to hold onto it for years before turning it into a strategic reserve.

https://iili.io/K9iJA6g.md.png
https://x.com/SecScottBessent/status/1956080030137626887

If you ask people who lost their money, I guess they would be pissed if the government didn't spend any effort on returning their money. But I think it's hard from a logistical perspective to make sure every penny is returned to its rightful owner. I suppose whether it's the right thing to do is impossible to answer, unless we know they're trying to seize money by labeling every business as illegal and forcing their way into it. The thing we can do as a retail user is to make sure we don't lose our money due to stupid mistakes.

I am quit confused, where is the seized bitcoin from? Because it will hurt if the Bitcoin was seized from an exchange hacker or similar, it means that some people will be affected.

I expect the government to return the Bitcoin to the rightful owners, unless they can't find the rightful owners again, also some Bitcoin that are seized from criminals might be impossible to return to the owners, these are the type they should keep.

Now if they decide to keep doing this it will give the government the power to start seizing Bitcoin to increase their holding, because it's free, they will do it the right and the wrong ways, I am not in support of this crazy strategy, it feels like stealing to me.

A "seized asset" implies something that was stolen by criminals from their victims.

In that case the seized asset should be given back to the victims. The government has no right to
hold on to it or sell it off for its own benefit.

If so then that would give government a perverse incentive to falsely accuse you of stealing
and provide them an excuse to seize your bitcoin (even when you legitimately own it and never stole anything).

No, there are many other scenarios where this is not true.

In many cases this is near impossible or does not make economic sense. Should they spend $100m in taxes to track down, account and reimburse victims $10m in value? No.

Of course they do. The law decides the right, not someone with the username headingnorth.

You've been asleep since you have been born. Did you complain that asset seizure is possible with other assets before or you are just complaining about Bitcoin now? This incentive was always there, and it will always be here.

This is wrong though, if a coin is seized then it means the person that received the coin the first place did it illegally but I want believe that the coin has an origin, why not send back the coin to the original owner. I can't imagine someone coin was hack and lose everything they have fault for only for another country to hold into it. The only coins that government is supposed to keep is only when someone use it for terrorism or use to trade illegal goods.

I remember how silk road Bitcoin was sieze years back, he even went for prison for it because it was reported that the Bitcoin in his possession were gotten under the influence of dark web and any activities on dark web is illegal, he was later pardon but all the Bitcoin was taking by the government which was understandable, he got back though because people still donate some Bitcoin for him after his release, that's one power message of a decentralized community.

Your own example contradicts you. In cases like dark web markets, the users are using the coin for illegal purposes and the sellers are getting coin for illegal things. In both these cases there is reason to return the coin to anyone, so it should be seized and go towards the government. For other cases like scams I have explained it in my post.

It's sad and scary to know there are so many sheep like yourself who think the government can do whatever it wants,
and no one should ever dare question them. That is the anti-thesis of what bitcoin is about and why it was created. 

Someone like yourself would feel right at home in North Korea or Saudi Arabia. I wouldn't be surprised if you are from one those places.

Since it was been seized that means those coins are came from illegal activities.

You will learn lot of things about those seizures they made here https://cryptonews.com/news/story-behind-us-governments-5-billion-bitcoin-heres-what-you-need-know/

Also US didn't seize those coins immediately since they undergo with lots of process. Much better if they seize those coins since somehow its helpful for them, also that's their law and part of consequences to those which did criminal activities in their jurisdiction since this serves as a warning that never do any financial crimes and terrorism in US.

I think, there is nowhere that states a seized asset cannot be a reserve.  As far as I know, it was misunderstood that seized assets need to be auctioned since the previous assets that were confiscated from criminal activities are auctioned, but there is nowhere in the law or guidelines that these seized assets are not fit for reserve.  They had these seized assets from hacks and other criminal activities auctioned to recover costs or fund some programs.

With this I believe it is ok for the seized Bitcoin to be a Bitcoin reserve since there is no law forbidding it.


I think they are just being smart.  Why sell seized Bitcoin when they can just put it in reserve?  It is illogical if they already have Bitcoin and sell it then buy again for their Bitcoin reserve.

What is right in a country is decided by law. Whether you like this or not changes nothing. In your case, the majority of the stupid decides what is allowed and what is not.  :) My man wants the government to give back money to drug addicts and drug sellers, great example of western education.  :D

They can give it back to the right owners; that's if they know who it belongs to or if it's in a case where the owners are clean and can come forward to challenge the government in court and prove they own something in those seized coins. Then they can receive it back, but if they can't do that, then it will come down to selling it in auction, or they will later be left to decide what to do with it.

Giving back money to drug addicts would greatly benefit crackheads like yourself,
so why are you complaining? You get free govt money to buy more crack and meth!



The US government can't even account for its own bitcoin holdings that were seized from various sources including Silk Road.
About 150,000 bitcoins are still unaccounted for. They have never provided proof of funds (ie: public addresses) for the missing amount.
They have never provided a proper explanation of what happened to it.

The US government also hasn't conducted an audit of its gold holdings in over 50 years.

I would not trust them to hold anything of value in a strategic reserve for long. It will eventually get embezzled.

If you would search my post history, I'm sure you would find a post in which I wrote my opinion about US crypto reserves based on exactly what you are writing about now. While people were excited that the US would buy BTC, some like me warned that they would fill their reserves this way.

After all, why buy when you can get it for free - who can complain about anything, they make and enforce the laws - and all those who keep their coins in CEXs wallets are no longer only at risk from hackers, but also from the authorities who can always say "your coins are seized because they are connected to crimes, terrorism and money laundering".

This was always the case though, so nothing new. Instead of seizing to sell, they seize to keep. The risk was always present, people were just ignoring it. The not your keys not your coins lesson comes one way or the other. If a person can't learn by reading, they will learn by losing.

The US has stockpiled seized crypto in a Strategic Bitcoin Reserve & authorities plan to rely on the captured assets rather than make open market purchases.  Even transfers in recent years ($300k) were flagged by Arkham into government wallets as op already mentioned. The US Marshals tend to auction off historically seized BTC, however reporting of FOIA shows that holdings/accounting are sloppy & estimates differ widely. It is absolutely legal but also shady at the same time. Look out for perverse incentives, demand transparency and audits bruh.

It's incredible that even after 15 years since the existence of Bitcoin, a lot of those who own Bitcoin have not learned anything, so they still think that CEXs are some kind of bank where you can store (in a safe way) your cryptocurrencies and nothing bad can happen. Will people ever understand that no government in the world will accept Bitcoin for what it actually is, but rather they accept it by changing its purpose?

It will probably never happen, but as the old saying goes, "While I breathe, I hope"

People are actually aware of this but actually lots of people are lazy to transfer to those wallets which they have control. Since what they think its waste of time to do transfer when they want to trade their asset. They are so confident that nothing will happen on the CEX's they are using.

They only realize that they made huge mistake once they are affected with not only hacking issue but also government seizing those what they think illicit funds came from the exchange they capture.

Hopefully fully realize those mistakes they have done and don't give their full trust on CEX's even if they are what they called reputable platform.

 

I agree with your opinion as it relates to sensitive matters as this. These assets seized by the US government can be returned back to the owners if the government really wants to do so because majority of the seized bitcoin are said to be from hacks which means it could be traceable to the exchanged that got hacked to return it back to the owners but from all indications, the government wants to hold onto it by using the law to back them up for their actions. This is the more reasons why we should be extremely careful so we do not get into situations as this where our assets can not be returned back to us after being taken back from hackers and scammers by the government and we hoping that the government would do the needful be helping to return backto the owners.

It is true that the government can return it to the owners if they want, they will find a way. But did you know that finding the real owner will be costly and time consuming, even more costly than the amount of money seized?

It is easier said than done, and we cannot blame the government in this case when the fault lies entirely with us for failing to control our greed or being too careless in protecting our personal property.
Furthermore, the government has billions of problems to solve at home and abroad, and we cannot expect them to spend all their manpower and time just to refund us.

Between choosing to address other issues like diplomacy, improving infrastructure, attracting foreign investment to create millions of jobs for the people versus spending time just compensating a few thousand people for their negligence. Which do you think is more important?

Indeed we can not blame the government as they have lots of things to be doing in further development and also providing necessities and amenities for her citizens and of course we know  that in most cases also, it would be more expensive to get those funds returned back to the owners but I think that of the exchange would not be an issue as the exchange already have details and names of accounts that got affected by the hack and also they have their customers KYCed so that would  be much easier to trace if they really want to make sure they return the assets back to the owners as the government can collaborate with the exchange to making sure the assets gets to the owners. In all, we just have to be more careful and put our assets under our own custody as third party exchange can not guarantee the the safety of our assets.

It is really crazy to me. It seems that the problem never was about access to information, the problem was in the people.

It has nothing to do with laziness. You are aware that a car hitting you will possibly kill you, but you are lazy so you don't dodge it? Nah, you got things backwards. If you understand the danger of something fully, you act accordingly with this knowledge. Until your acts change, you understand nothing.

It is not worth the effort, so they will not try to return it to the few owners that may have had legitimate ownership.

Moral in this world do not exist anymore and doing horrible stuff is always justified by bad people.
Centuries ago piracy was taking place in the land then in the sea then in the internet. No one can blame the government and the judges are being silenced and Supreme Court was chosen carefully to be theirs. Good luck trying to prove the government wrong.