Bitcoin News Today: UK Considers Selling 61,000 Bitcoin Worth $7.1 Billion To Boost Budget

The UK government is contemplating the sale of approximately 61,000 Bitcoin, valued at around $7.1 billion, to bolster its national budget. This Bitcoin stash was seized in connection with a 2018 Chinese Ponzi scheme and was discovered when a hospitality worker attempted to purchase luxury property using the digital currency. The worker was later convicted of money laundering and sentenced to nearly seven years in prison.

The Treasury, in collaboration with the Home Office and law enforcement agencies, is developing a system to securely store and eventually sell these Bitcoin holdings. However, the plan faces significant legal and diplomatic challenges. Victims of the Ponzi scheme, backed by Chinese authorities, have been demanding the return of the Bitcoin since at least 2024. The legal complexities arise from the fact that the victims lost yuan, not Bitcoin, and China is lobbying the UK to return the crypto equivalent rather than the original fiat losses. This raises questions about how restitution should be calculated and whether British courts will recognize international claims on seized digital assets.

Crypto advocates and legal experts have expressed concerns about the sale, emphasizing that the assets are still part of an unresolved legal battle. Susie Violet Ward, CEO of Bitcoin Policy UK, labeled the report as “sensationalism over substance” and noted that the Bitcoin is still “legally contested.” She emphasized that no sale can proceed until ownership is fully resolved through legal channels. Freddie New, head of policy at Bitcoin Policy UK, explained that any asset sale would be governed by the UK’s proceeds of crime legislation. According to these laws, confiscated property can be sold to fulfill court-ordered compensations, pay administrative costs, and distribute the remaining funds among law enforcement and the Treasury. However, the unique nature of this case, where the victims’ losses were in yuan, adds complexity to the situation.

The UK government has already taken steps toward building a more formal crypto asset management structure. In May, it issued a tender for a £40 million “crypto storage and realization framework” to help police manage and secure seized cryptocurrencies. However, the tender was reportedly terminated after failing to attract suitable bids. The idea of selling Bitcoin to cover public spending is not without opposition. Crypto advocates have urged the UK to consider holding onto the assets instead of selling them prematurely. Jordan Walker, founder of the Bitcoin Collective, published an open letter advising the government to retain the Bitcoin as a strategic reserve, arguing that it could become even more valuable in the future. Bitcoin Policy UK echoed this sentiment in a July 2024 communication to the government, recommending that officials update legal frameworks to allow the state more discretion in retaining seized digital assets. Despite their efforts, the proposal was reportedly dismissed.

As of now, the fate of the seized Bitcoin remains uncertain. While the Treasury appears eager to convert the digital holdings into cash to plug fiscal gaps, legal and diplomatic barriers may delay or complicate any such move. With the crypto market continuing to grow and public interest in digital assets surging, how the UK handles this high-stakes situation could set a precedent for future cases involving seized cryptocurrencies.

Bitcoin may soon encounter market pressure as the UK assesses selling $7.1 billion in BTC seized in 2018 from a Chinese Ponzi scheme. The potential Bitcoin sale by the UK government holds significant implications for the cryptocurrency market, with anticipated short-term price volatility. The UK government plans to sell over 61,000 Bitcoin seized from the 2018 Tianjin Lantian Gerui scam. Bitcoin's price could face short-term volatility if the sale proceeds amidst current market conditions. The action involves critical UK agencies including the Home Office and Treasury, with Chancellor Rachel Reeves at the helm. Legal issues remain unresolved, making the sale tentative. As Susie Violet Ward, CEO of Bitcoin Policy UK, noted, "No sale can happen while that legal process is unresolved."

The potential liquidation of the seized Bitcoin may affect market liquidity, influencing Bitcoin's price and related digital assets. Historically, government sales have triggered temporary market reactions but no lasting price declines. Market observers remain cautious, noting previous instances where similar actions mostly had short-lived effects on prices. Experts suggest a "wait and see" approach as all legal barriers remain intact. The potential financial and regulatory outcomes of this sale could lead to short-term market adjustments, while regulatory scrutiny may increase. Long-term effects will hinge on how the sale is executed and absorbed by the market, reminiscent of past cases.