Bitcoin has had a strenuous relationship with the government ever since it started to gain popularity among tech enthusiasts as a mode of payment and among traders as a solid investment. However, modern-day pop culture often ties cryptocurrencies to various illicit activities and this has damaged its reputation and has been a major setback for the underlying industry.
Governments throughout the world have cracked down on cryptocurrencies as a result of increasing criminal activity that often uses crypto as a tool to stealthily evade the regulators. The authorities ended up confiscating the cryptocurrencies found in these cases.
US government dumps too early
The U.S. government is one of the largest holders of bitcoins. The bitcoins are sold off in public auctions conducted by the U.S. Marshals Service, a law enforcement agency within the Department of Justice. More than $1 billion worth of digital coins has spent time in the custody of U.S. law enforcement. As a result, the U.S. Marshals Service, responsible for sales of the confiscated bitcoin, has become a major player in cryptocurrencies.
In a recent turn of events, cryptocurrency enthusiast and privacy advocate Jameson Lopp has created a real-time tracker to estimate the amount of money the U.S. should have generated. The tracker has revealed that the government has been selling off its bitcoin holdings since 2014. The total sum raised from these auctions amount to just over $150 million.
If these bitcoins were held until 2020 where the price touched the $10,000 mark, the total amount raised would have been $1.85 billion. As of now, the authorities have just missed out on $1.65 billion.
According to the official USMS website, the authority is yet again planning to sell “approximately” 4,040 Bitcoins. The process requires a $200,000 deposit just to take part in the auction. The deposits would be returned to non-winning bidders, promising to initiate the return of losing bid deposits within five business days after transferring bitcoins to the winning bidder.
The recently announced Bitcoin auction follows a number of similar bids in the past years. In January 2018, the USMS sold over 3,800 confiscated bitcoins. But it turns out that the US government has an awful sense of timing.
The United States isn’t the only government that has been holding Bitcoins. The United Kingdoms has also sold $369,000 worth of BTC at a time when BTC’s price was approximately $8,000 per BTC.
The Bulgarian government has also seized about 213,000 BTC from a criminal operation, worth about $2 billion. The holding would be worth $3 billion at bitcoin’s peak price. However, the government hasn’t disclosed anything about what they plan to do with their stash. According to reports, the value of the 213,000 seized Bitcoins would be enough to pay off one-fifth of Bulgaria’s national debt.
The South Korean government had also announced plans to auction off roughly $590,000 worth of Bitcoins in 2017. The 216 Bitcoins seized by the government were allegedly used for illicit financial activities operated by 33-year old Ahn, together with seven other suspects, on his web-based marketplace, which accepts Bitcoin as payment for inappropriate content such as gambling and pornography.