The U.S. Treasury Department has released a report exposing significant vulnerabilities within the IRS Criminal Investigation Division's (CI) digital asset seizure and custody system. The report reveals repeated failures to adhere to established guidelines and protocols when managing seized cryptocurrencies. Specifically, the Treasury Department noted instances where the IRS did not fully comply with guidelines related to the management and disposal of cryptocurrencies seized between December 2023 and January 2025. This raises concerns about the security and accountability of the IRS's crypto asset management practices. Given the U.S. government's growing Bitcoin holdings, estimated at roughly 200,000 BTC as of March, these loopholes present a substantial risk. The Treasury Department suggests that a complete overhaul is necessary to ensure proper oversight and prevent potential loss or mismanagement of seized digital assets. Improved security and clearly defined protocols are crucial for responsible handling of these valuable assets. ```

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