What the U.S. government does with its secret bitcoin stockpile
For years, the U.S. government has maintained a side hustle auctioning off bitcoin and other cryptocurrencies. Historically, Uncle Sam has done a pretty lousy job of timing the market.
The 500 bitcoin it sold to Riot Blockchain in 2018 for around $5 million? That’s now worth north of $23 million. Or the 30,000 bitcoin that went to billionaire venture capitalist Tim Draper for $19 million in 2014? That would be more than $1.3 billion today.
The government has obtained all that bitcoin by seizing it, alongside the usual assets one would expect from high-profile criminal sting operations. It all gets sold off in a similar fashion.
“It could be 10 boats, 12 cars, and then one of the lots is X number of bitcoin being auctioned,” said Jarod Koopman, director of the Internal Revenue Service’s cybercrime unit.
One of the next seizures up on the auction block is $56 million worth of cryptocurrencies that authorities confiscated as part of a Ponzi scheme case involving offshore crypto lending program BitConnect. Unlike other auctions where the proceeds are redistributed to different government agencies, the cash from this crypto sale will be used to reimburse victims of the fraud.
The government’s crypto seizure and sale operation is growing so fast that it just enlisted the help of the private sector to manage the storage and sales of its hoard of tokens.
FBI agents finish loading materials into a truck out of the home of United Auto Workers President Gary Jones on Wednesday, Aug….