The US government has been seizing and then auctioning off cryptocurrencies for years. The process is gaining steam, so it has enlisted the help of the private sector to manage the storage and sales of its hoard of tokens.
According to Jarod Koopman, the director of the Internal Revenue Service’s cybercrime unit, the government has acquired record amounts of crypto in recent years.
“In fiscal year 2019, we had about $700,000 worth of crypto seizures. In 2020, it was up to $137 million. And so far in 2021 (as of August), we’re at $1.2 billion,” Koopman told CNBC earlier.
Experts say with the rapid growth of cybercrimes the US government’s crypto coffers are expected to expand even further.
The US Marshals Service, which is the main agency responsible for auctioning off the government’s crypto holdings, has so far seized and auctioned off more than 185,000 bitcoins, worth around $8.6 billion.
The proceeds of crypto sales are typically deposited into the Treasury Forfeiture Fund or the Department of Justice Assets Forfeiture Fund. After it’s placed into one of those two funds, the liquidated crypto can then be put toward a variety of line items. For example, Congress can revoke the money and give the cash to other projects.
According to Koopman, the crypto traced and seized by his team accounts for roughly 60% to 70% of the Treasury Forfeiture Fund, making it the largest individual contributor. A Department of Justice spokesperson told CNBC he’s “pretty sure” there’s no central database of cryptocurrency seizures.
“In my experience, folks that are in these positions in high levels of government, they may be there for a short period of time, and they want to get some wins under their belt,” said Jud Welle, a former federal cybercrime prosecutor. “This is the kind of thing that definitely captures the attention of journalists, cybersecurity experts,” he added.