Does the US Federal Government hold crypto? Probably so. Following enforcement actions or tax violations, the feds may confiscate various types of assets, and these can include digital ones like Bitcoin, etc.
Earlier this week, Congressman Tom Emmer, along with Congressman Joe Auchincloss, reminded us they had requested information as to how much crypto the government holds. The bipartisan letter asked that the Federal Reserve provide information on the US government’s digital asset holdings.
Apparently, there was no “timely response” from the request as Congressman Emmer was tweeting out the letter from last June. He added that government entities frequently seize digital assets, but the process is not transparent. Congressman Emmer stated that reports indicate that as of February 2022, the US government controlled over $4 billion in Bitcoin alone.
US law enforcement regularly captures and seizes cryptocurrency and auctions that crypto off to the public. This process is not transparent, and there are reports that, as of February 2022, the US government owned over $4 billion in Bitcoin alone.
— Tom Emmer (@GOPMajorityWhip) August 8, 2022
What do the feds do with confiscated assets? The US General Services Administration frequently holds auctions of all kinds of assets – including crypto. A year ago, it was reported that the IRS was auctioning off $1.2 billion in crypto due to a “tax non-compliance case.” There have been other similar auctions.
The government does provide an annual report or audit of the Assets Forfeiture Fund and Seized Asset Deposit Fund, but this is rather opaque when it comes to crypto – which falls under “financial instruments” (as opposed to cash and monetary instruments). So it is really hard to tell if the federal government holds any significant crypto. Auditors have recommended a new and improved Asset Forfeiture Management Guide which is due to be released at the end of next month (September 2022) perhaps more granularity will be provided at that time. And perhaps by then, the US Federal Reserve will respond to the Congressional request.