Feed: Slashdot
Feed Link: https://slashdot.org/
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Title: What's in the US Government's New Strategic Reserve of Seized
Crytocurrencies?

Link: https://news.slashdot.org/story/25/05/31/0636...

In March an executive order directed America's treasury secretary to create
two stockpiles of crypto assets (to accompany already-existing "strategic
reserves"of gold and foreign currencies). And the Washington Post notes these
new stockpiles would include "cryptocurrency seized by federal agencies in
criminal or civil proceedings." But how big would America's "Strategic
Bitcoin Reserve" be - and what other cryptocurrencies would the U.S.
government hold in its "Digital Asset Stockpile"? "New data on what crypto
cash the U.S. government has seized may now provide some answers. It suggests
the crypto reserves will together hold more than $21 billion in
cryptocurrency... The stockpile will be funded with whatever crypto assets
the Treasury holds other than bitcoin, leaving the stockpile's composition to
be largely determined by a mixture of chance and criminal conduct. That
unconventional method for selecting government financial holdings had the
benefit of making the reserves cost-neutral for the taxpayer. It also
provided a way to estimate what exactly might go into the two pools before
results are released from an official accounting of U.S. crypto holdings that
is underway.Because government seizures are disclosed in court documents,
news releases and other sources, crypto-tracking firms can use those notices
to monitor which digital assets the U.S. government holds. Chainalysis, a
blockchain analytics firm, reviewed cryptocurrency wallets that appear to be
associated with the U.S. government for The Washington Post. The company
estimated how much bitcoin it holds, and the other crypto tokens in its top
20 digital holdings as of May 13, by tracking transactions involving those
wallets. The United States' top 20 crypto holdings according to Chainalysis
are worth about $20.9 billion as of 3 p.m. Eastern on May 28, with $20.4
billion in bitcoin and about $493 million in other digital assets. It has
been scooped up from crimes such as stolen funds, scams and sales on dark net
markets. Those estimates put the U.S. government's top crypto holdings at
less than the approximately $25 billion worth of oil held in the U.S.
Strategic Petroleum Reserve. Their value is nearly double the Fed's listing
for U.S. gold holdings, although that figure uses outdated pricing and would
be over $850 billion at current prices... The crypto tokens headed for the
U.S. Digital Asset Stockpile according to the Chainalysis list include
ethereum, the world's second-largest digital asset, and a string of other
crypto tokens with punier name recognition. They include derivatives of
bitcoin and ethereum that mirror those cryptocurrencies' prices, several
stable coins designed to be pegged in value to the U.S. dollar, and 10 tokens
tied to specific companies, including the cryptocurrency exchanges FTX, which
imploded in 2022 after defrauding customers, and Binance. Two U.S. states
have already passed legislation creating their own cryptocurrency reserve
funds, the article points out. But ethereum co-founder Vitalik Buterin
complained to the Post in March that crypto's "original spirit...is about
counterbalancing power" - including government and corporate power, and
getting too close to "one particular government team" could conflict with its
mission of decentralization and openness. And he's not the only one
concerned: Austin Campbell, a professor at New York University's business
school and a principal at crypto advisory firm Zero Knowledge, sees hypocrisy
in crypto enthusiasts cheering the government's strategic reserves. The
bitcoin community in particular "has historically been about freedom from
sovereign interference," he said.

Read more of this story at Slashdot.

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