The US will continue to build up its strategic Bitcoin reserve, but only through confiscations.
“To get into the 21st century, we’ve started a Bitcoin strategic reserve,” US Treasury Secretary Scott Bessent told Fox Business on Thursday, but he added that the country won’t buy “anymore of that.”
Bessent’s words come as the amount of Bitcoin the US holds has come under question. In mid-July, US Senator Cynthia Lummis, a staunch Bitcoin advocate and co-author of a Strategic Bitcoin Reserve bill, sounded the alarm after The Rage reported the US may own less than 29,000 Bitcoin — a fraction of the 200,000 Bitcoin cited in earlier estimates.
“If true, this is a total strategic blunder and sets the United States back years in the Bitcoin race,” she wrote on X.
At the time, crypto czar David Sacks had said the government was in possession of around 200,000 Bitcoin, despite the fact a full audit has never been done.
According to Bitcoin Treasuries, Uncle Sam owns more than 198,000 Bitcoin worth about $23 billion, though that figure does not distinguish between forfeited Bitcoin, which the government owns outright, and seized Bitcoin, which could still be returned to victims of alleged cybercrime.
Just this week, White House crypto advisor Bo Hines stepped down amid heightened scrutiny over the size of the US Bitcoin strategic reserve.
Strategic reserve
Bitcoin advocates were quick to rail against Bessent’s statement, accusing Washington of breaking its promise to build a sovereign Bitcoin stack.
US President Donald Trump’s campaign had floated the idea of a reserve as part of his “crypto capital of the world” pledge, which many took to mean purchasing Bitcoin.
A US strategic reserve didn’t rub everyone the same way, however. Bitwise called it a “gamechanger.” But crypto angel investor Nic Carter said the government should not “run an ersatz crypto hedge fund.”
Trump never explicitly promised to buy new Bitcoin. Instead, the reserve was designed to be filled with forfeited Bitcoin, rather than taxpayer-funded purchases.
The motherlode
So, where did the government’s coins come from?
Every Bitcoin the US controls was seized from individuals or organisations accused of illicit activities.
The motherlode came from the Silk Road busts, including about 178,000 Bitcoin seized in early raids. Silk Road was a darknet market operated by now-liberated US citizen Ross Ulbricht. At one point, over 90% of all Bitcoin transactions went through the website.
Additionally, there’s about 50,676 Bitcoin seized from James Zhong, and 69,370 Bitcoin seized from an anonymous user dubbed “Individual X.”
Both were accused and convicted of stealing the funds from Silk Road.
In 2022, the Bitfinex hack recovery added another 94,636 Bitcoin to US coffers. Smaller seizures from scams, Ponzi schemes, and cybercrime fill in the rest.
One bit of what Bessent said did stand out: the US will not be selling any more Bitcoin.
Over the years, the US has auctioned off some of its haul, including an alleged $4.2 billion sale in October 2024.
Pedro Solimano is DL News’ Buenos Aires-based markets correspondent. Got at a tip? Email him at [email protected].
