Bitcoin News Today: UK Considers Selling 61,000 Bitcoin to Close £22 Billion Budget Gap

The United Kingdom’s Home Office is considering the sale of seized cryptocurrency assets to address a significant budget deficit. This move could potentially impact the recent surge in Bitcoin and other cryptocurrencies. The Home Office is collaborating with law enforcement to develop a framework for securely holding and liquidating the seized crypto assets, according to a report from July 19.

The total amount of crypto confiscated by the UK is not yet clear, but it is known that the stockpile includes at least 61,000 Bitcoin, valued at approximately $7 billion. These Bitcoin were seized from a 2018 Chinese Ponzi scheme, making the UK the third-largest holder of Bitcoin among countries that own the cryptocurrency. A woman was sentenced to six years and eight months in prison in 2024 for her role in laundering 150 BTC on behalf of a Chinese woman linked to the theft. The sale of the UK’s vast Bitcoin holdings could help close a £22 billion budget gap caused by rising borrowing costs and slow economic growth. Chancellor of the Exchequer Rachel Reeves is seeking funding for welfare reversals and cost-of-living measures.

Typically, UK authorities retain 20% to 30% of seized assets, which are divided between law enforcement budgets and government funds. The Crown Prosecution Service has requested permission from the High Court to retain the confiscated coins, with the proceeds allocated to the Treasury. However, victims have requested that the funds be returned to them. Susie Violet Ward, the CEO of the crypto lobby group Bitcoin Policy UK, criticized the report as “sensationalism over substance,” stating that the UK’s Bitcoin is still legally contested and that Chinese authorities and victims are demanding it back. No sale can proceed while the legal process is unresolved.

Last year, the German state of Saxony sold 50,000 Bitcoin for $2.9 billion as part of a plan to offload BTC seized from the defunct film piracy website Movie2K. This sale was widely criticized by crypto pundits, who argued that the German government missed out on approximately $2.3 billion in profits by selling early before Bitcoin’s price explosion. Observers have also cited the 1999 UK gold reserve sale under then-Chancellor Gordon Brown as a cautionary tale, where selling at market lows led to billions in missed profits. Given that many crypto analysts anticipate Bitcoin to rocket higher this year, a potentially enormous sale could also end up being short-sighted in the long term.

Jordan Walker, the founder of the crypto advocacy group Bitcoin Collective, penned an open letter to the UK government urging it not to sell its Bitcoin in response to the report. “Selling these holdings to address a short-term budget deficit would send a concerning signal,” he said, adding it could have “long-term consequences for the UK’s economic positioning.” Chancellor Reeves stated in April that the UK Treasury is eager to work with the United States to better support innovation across the fast-growing crypto industry through clearer regulation. “Through our Plan for Change, we are making Britain the best place in the world to innovate — and the safest place for consumers. Robust rules around crypto will boost investor confidence, support the growth of Fintech and protect people across the UK,” she said in a statement at the time. It remains to be seen whether the UK will follow the German route or adopt the US’s national Bitcoin reserve plan.