The United States Government is set to dramatically increase its Bitcoin (BTC) holdings in a budget-neutral way. On Tuesday, the Department of Justice (DoJ) formally indicted Chen Zhi, the founder and chairman of Prince Holding Group, with wire fraud and money laundering conspiracy.
While Zhi remains at large, the U.S. government announced that it is in control of about 127,271 Bitcoins, valued at about $15 billion at press time. Notably, the U.S. government is in possession of private keys to a crypto wallet that was previously unhosted.
At the time of this writing, it remains unclear how the United States government got custody of the private keys to the wallet holding the illicit BTCs.
Following the seizure of Zhi’s Bitcoin by the DoJ, the U.S. government is set to increase its holdings for the strategic BTC reserve (SBR) to 324,625 BTCs, valued at about $36.5 billion. Scott Bessent, the current Secretary of the Treasury, previously stated that the U.S. government is considering adding more Bitcoins to its SBR in a budget-neutral way.
“Under Section 3(d) of the SBR Executive Order, any coins that can be traced to identifiable victims must first be returned to them. But for the remainder, which would otherwise sit idle or be liquidated, the SBR ensures that Bitcoin recovered from atrocities like pig-butchering is preserved as a strategic national asset,” Zach Shapiro, managing partner at Rain Law, noted.
According to on-chain data analysis from Arkham Intelligence, the U.S. government transferred $75 million in BTCs seized from the Potapenko/Turogin case to a new wallet. The movement sparked fear of potential Bitcoin sale or liquidation to reimburse victims.
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