Trump's cryptocurrency policy may be in a dark spot, as the Department of Justice has confirmed the sale of Bitcoin previously seized worth 1 trillion yen, which could lead to a shortage of reserves.
At the end of 2024, a US court ruled that the Department of Justice should be allowed to sell 69,370 BTC (approximately 1 trillion yen) seized in the 'largest cryptocurrency seizure case in history.' The Department of Justice is expected to proceed with the sale, but this is at odds with President-elect Donald Trump's policy of 'using Bitcoin as government funds,' as technology media Ars Technica explains.
US selling 69K seized bitcoins could mess with Trump plans for crypto reserve - Ars Technica
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The 69,370 bitcoins were originally seized from criminals. It all started in 2012 when hackers stole bitcoins from Silk Road, a platform for buying and selling goods with bitcoins. As the US government continued its investigation, the stolen bitcoins were discovered in 2020 and seized by the government.
However, Battle Born Investments, which said it had purchased bitcoins from the hackers or people connected to them, filed a lawsuit over whether the seizure was appropriate, so the bitcoins were temporarily unavailable. Battle Born Investments sought the return of the bitcoins, but was denied, so the next step is to try to expose the hackers' identities through the Freedom of Information Act.
However, this attempt was also rejected on the grounds that the government argued that the hackers were under investigation and should not be identified. This resulted in Battle Born Investments' rights to the bitcoins being terminated, paving the way for the government to sell them.
The price of Bitcoin fell immediately after the news broke that the Department of Justice had received permission to sell a large amount of Bitcoin, and Ars Technica predicted that 'if the sale gets underway, there will be further price fluctuations.' If the price of Bitcoin falls further, it could disrupt Trump's plan to set up a government fund in Bitcoin.
Trump has a strong interest in virtual currencies, including Bitcoin, and argues that the government should keep the Bitcoin it owns. Under the Biden administration, government-owned Bitcoin is sold to the public, with the proceeds being used to compensate crime victims and fund law enforcement agencies, but Trump believes that 'all sales should be stopped,' and instead plans to build a Bitcoin reserve with seized Bitcoin. The amount of Bitcoin owned by the U.S. government is now at 198,000 BTC, worth approximately 2.9 trillion yen.
Trump also said, 'I'm going to do something great with virtual currency,' and suggested the possibility of using it to wipe out the national debt. In addition, he nominated Paul Atkins, a former virtual currency advocate, as the next chairman of the Securities and Exchange Commission, and appointed David Sachs, a former PayPal employee, as head of AI and virtual currency monitoring, and indicated his intention to relax regulations on virtual currency and expand the framework.
President-elect Trump appoints former PayPal COO David Sachs as 'White House AI and cryptocurrency czar' - GIGAZINE
Analysts expect the price of Bitcoin to more than double if Bitcoin Reserves are introduced.
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