US Strategic Reserve; is it right to actually use seized assets as reserves

[Kelward]

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.

[Danica22]

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.

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.

[melinoe]

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.

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.

[Fiatless]

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.   

[SilentEcho]

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

[Agbamoni]

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.

[nemesis_incarnate]

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.

[Odohu]

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.

[Marvell1]

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.

[betswift]

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.

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

[Charles-Tim]

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

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.

[MArsland]

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.

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.

[Z-tight]

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.

[PremiumcryptoHub]

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.

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.

We’ve also started to get into the 21st century, a Bitcoin reserve. We’re not going to be buying that, but we are going to use confiscated assets and continue to build that up

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 seized Bitcoin.

Bitcoin drops below $119K after US Treasury secretary rules out new BTC buys

[Floxynice]

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.

[Ronsbit]

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.

[Iranus]

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.   

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://x.com/SecScottBessent/status/1956080030137626887

[joniboini]

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.

[KiaKia]

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.

[headingnorth]

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).