Bitcoin News Today: Arkham Clears Bitcoin Reserve Speculation with 198,000 BTC Tracking

Last week’s release of a U.S. Marshals Service spreadsheet under a Freedom of Information Act request showed only 28,988.35643016 bitcoins in custody, valued at roughly $3.4 billion, despite the White House having cited a figure of around 200,000 coins since March. This discrepancy triggered speculation that more than 80% of the Strategic Bitcoin Reserve may have been secretly liquidated, sparking concern among lawmakers and observers [1]. U.S. Senator Cynthia Lummis (R-WY) criticized the potential move as a “total strategic blunder” and warned of negative consequences for the U.S. position in the global race to control digital assets [1].

Two days later, blockchain intelligence firm Arkham provided clarity, tracking at least 198,000 bitcoins—valued at approximately $24 billion—to addresses linked to federal agencies including the FBI, DEA, DOJ, and U.S. Attorney offices. Arkham’s research indicated that these holdings had remained static for four months, effectively countering the speculation of a phantom liquidation [1].

While the revelation calmed immediate concerns, it also highlighted the ongoing lack of transparency surrounding the U.S. digital asset holdings. Despite President Trump’s Executive Order 14233 in March, which mandated a swift audit of all federal digital assets and the creation of a dedicated office within the Treasury, the administration has yet to release the promised report. The order also required a 60-day timeline for developing budget-neutral strategies to grow the Strategic Bitcoin Reserve [1].

The audit is crucial for maintaining public trust, as the U.S. currently holds the largest known sovereign bitcoin stockpile. It surpasses the UK’s £2 billion in seized criminal assets and Bhutan’s billion-dollar reserves from government-backed mining. However, the management infrastructure remains rudimentary. In 2023, the U.S. Marshals Service outsourced the custody and trading of Class 1 digital assets to Coinbase Prime under a $32.5 million, five-year contract. This arrangement streamlined forfeiture logistics but shifted control of the private keys to a private entity, limiting public access to cryptographic proof of the assets’ existence [1].

Cold storage solutions may satisfy procurement requirements, but they do not ensure transparency. Without cryptographic verification, the public remains unable to confirm the existence or immutability of the reserves, leaving room for speculation and misinformation.

Bo Hines, Executive Director of the President’s Council of Advisers on Digital Assets, recently announced that the audit report is expected to be released the following day. If the report is a standard accounting exercise, it would be an improvement over the current state of affairs. However, it would still lack the cryptographic evidence needed to verify the ongoing status of the reserves.

To achieve true transparency, the federal government must adopt processes that provide continuous cryptographic verification. This would involve techniques similar to those used by exchanges like Kraken and Binance, which use Merkle trees and cryptographic signatures to prove that assets exceed liabilities. The Treasury could implement a similar method by announcing reserve addresses and using on-chain transactions to anchor proof of seizure case numbers. This approach would allow external verification without compromising sensitive data [1].

Cryptographic proof of reserves is technically feasible and would not require new legislation or technology. The Treasury Inspector General already works with independent auditors, and Coinbase already provides institutional-grade cold storage. What is needed is a shift in mindset—recognizing that digital assets require fundamentally different accounting and verification practices than traditional assets.

Without these improvements, the Strategic Bitcoin Reserve remains a legal document rather than a verifiable fact. In an era of immutable ledgers, the U.S. government’s continued reliance on spreadsheet-based transparency is a fragile arrangement. Until the administration adopts cryptographic validation of its on-chain holdings, it is asking global markets to extend trust rather than furnish proof.

The recent confusion sparked by the FOIA response was mitigated by Arkham’s research, but future rumors about asset mismanagement may not be as easily dispelled. Establishing a clear, verifiable framework for the Strategic Bitcoin Reserve would not only strengthen public confidence but also set a benchmark for the broader digital asset industry.

Source:

[1] Birnbaum, David. Did Someone Loot The Strategic Bitcoin Reserve? (https://www.forbes.com/sites/davidbirnbaum/2025/07/30/did-someone-loot-the-strategic-bitcoin-reserve/)