The US government is one of the largest holders of Bitcoin and has already confiscated over 215,000 BTC. The blockchain enables an open and publicly accessible ledger. An on-chain analysis of the government's recent transactions, their estimated bitcoin holdings, and the largest wallets.
Lately we discovered that the US government is among the largest Bitcoin holders, which has seized at least 215k BTC since 2020. On March 9, 2023, ~49k BTC associated with US government law enforcement seizures were on the move, with ~9.9k worth $221.7 million sent to a Coinbase address. As such, this dashboard tracks in real-time the US government wallets associated with the three largest BTC seizures to date to anticipate market movements:
- November 2020: 69,369 BTC linked to an anonymous criminal known as “Individual X,” who hacked the funds from the dark web internet marketplace Silk Road during 2013-14.
- January 2022: 94,643 BTC associated with Ilya Lichtenstein and his wife, Heather Morgan. The Internal Revenue Service (IRS) accused the couple of laundering $4.5 billion stolen during the 2016 Bitfinex hack.
- March 2022: 51,326 BTC belonging to James Zhong, who pleaded guilty to committing wire fraud for stealing the funds from Silk Road in September 2012.
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US government: one of the biggest Bitcoin holders?
~39.1k BTC, worth $875.3 million at the time, appear to be internal transfers. However, ~9.9k BTC, worth $221.7 million at the time, was sent to a Coinbase address, raising speculation that the move could signal a potential sale. It wouldn’t be the first time the US government conducts a sale of seized Bitcoin. After law enforcement shut down Silk Road in 2013, it seized 173,991 BTC while pursuing the case, including 144,336 from a wallet belonging to Ross Ulbricht, the marketplace creator. The US government sold all those coins in four auctions in 2014 and 2015, with venture capitalist Tim Draper famously buying 30,000 BTC for $18.7 million.
Another nearly $5.9 billion in bitcoin held by the government
The current estimated Bitcoin balance of the US government is 205,515 BTC, worth about $5.8 billion as of March 22, 2023. Therefore we estimate that the US government owns about 1.06% of Bitcoin’s circulating supply as of March 22, 2023. The Bitcoin holdings of the US Government were worth a little over $10 billion at its peak, precisely a year ago.
We also found that the US government owns two of the 10 largest Bitcoin wallets. The first wallet is associated with the 94,643 BTC seized from Ilya Lichtenstein and his wife. The second wallet is associated with the aforementioned 69'369 BTC seized from the anonymous criminal "Individual X". The four wealthier Bitcoin wallets are related to crypto exchanges, according to BitInfoCharts.
Closing thoughts
An early misconception about crypto that has been demystified over the years is that it can be used to obfuscate transactions easily and, thus, that it’s regularly used for criminal purposes. According to Chainalysis, the overall illicit activity constituted a small share of crypto’s total volume in 2022 at 0.24%. While it’s true that there are a handful of protocols focused on privacy-enhancing features, Bitcoin, Ethereum, and the majority of cryptoassets today rely on a public blockchain that allows every transaction to be traced.
The US government seizures associated with stolen Bitcoin from Silk Road and the 2016 Bitfinex hack are proof of that. In addition, our dashboard allows us to track the US government wallets in real time, leveraging that transparency to anticipate market movements.
