Bitcoin News Today: U.S. Government Holds 198,000 BTC Despite FOIA Report Showing 28,988 in Marshals' Wallets

The U.S. government’s Bitcoin holdings have sparked renewed debate after a Freedom of Information Act (FOIA) response revealed the U.S. Marshals Service (USMS) holds only 28,988 BTC, valued at approximately $3.4 billion [1]. This disclosure initially fueled speculation that the government had sold off 80% of its Bitcoin reserves. However, blockchain analytics firm Arkham Intelligence clarified the broader picture, confirming U.S. agencies collectively control at least 198,000 BTC, valued at $23.5 billion, with the majority stemming from high-profile seizures tied to criminal investigations [1].

The FOIA document, obtained by journalist @L0laL33tz, was limited to the USMS’s current holdings and excluded assets managed by other agencies such as the FBI, IRS, DEA, and Department of Justice [1]. These departments often seize Bitcoin during investigations but rarely disclose their holdings publicly. Arkham’s analysis attributes the largest portion of government-held Bitcoin to cases like the 2016 Bitfinex hack (114,599 BTC), Silk Road-related seizures (94,643 BTC), and the FTX collapse (1,751 BTC) [1]. Despite some sales—such as three separate 10,000 BTC transactions from James Zhong’s wallet in 2023 and 2024—none of the tracked wallets have moved in four months, indicating no large-scale liquidation [1].

The confusion arises from discrepancies in ownership status. Seized Bitcoin does not always equate to forfeited assets; some funds may be returned to victims or held pending court decisions [1]. Senator Cynthia Lummis critiqued the reported sell-off as a “strategic blunder” if confirmed [1], though Arkham emphasized the FOIA response did not reflect the full scope of government holdings. Analysts have long estimated U.S. Bitcoin reserves near 200,000 BTC, but fragmented reporting practices across agencies complicate accurate tracking [1]. The lack of a centralized database exacerbates uncertainty, with @L0laL33tz pursuing further FOIA requests to clarify whether Coinbase Prime manages any government crypto assets [1].

The FOIA data and Arkham’s findings highlight the complexity of assessing government-held cryptocurrencies. While the USMS’s 28,988 BTC represents a visible portion of the total, the broader $23.5 billion in seized assets underscores the government’s substantial crypto reserves. These holdings are largely tied to criminal investigations, reflecting Bitcoin’s role in illicit finance and law enforcement’s evolving strategies to seize digital assets. The absence of standardized reporting mechanisms across agencies, however, leaves room for misinterpretation and public skepticism. As debates over transparency and asset management continue, the U.S. government’s approach to its Bitcoin holdings remains a focal point for investors and policymakers alike.

Sources: [1] [U.S. Government’s 198,000 Bitcoin Holdings Remain Intact Despite $3.4B Report] [https://cryptofrontnews.com/u-s-governments-198000-bitcoin-holdings-remain-intact-despite-3-4b-report/]