Key Takeaways
- US Marshals only hold 28,988 BTC instead of earlier estimates of over 200,000.
- The BTC holding was revealed after an independent journalist’s FOIA request.
- Social media was filled with online conspiracies about what happened to the rest of the BTC.
In a shocking turn of events, a Freedom of Information Act (FOIA) request has revealed that the United States Marshals don’t control 200,000 BTC; instead, they hold a fraction of the popular estimate.
Up until now, popular on-chain monitoring platforms such as Arkham have put estimates in the range of 200,000.
US Marshals Hold Only $3.4B in BTC.
An independent journalist who goes by the X name of Lola L33tz filed a FOIA request about the BTC holdings towards the end of March, revealing the U.S. Marshals Service (USMS) holds just 28,988 BTC worth ~$3.4 billion.
Arkham Intelligence on-chain tracking still shows over $24 billion worth of BTC holdings under the U.S. government.
USMS is the primary agency for managing and auctioning seized crypto, which is usually transferred from other federal agencies like the Federal Bureau of Investigation (FBI), the IRS, and the Department of Justice (DOJ).
But now it appears the USMS no longer holds the bulk of the U.S. government’s BTC, raising the question: Where is the rest, especially of the 119,000 BTC seized from the Bitfinex hackers?
Some reports indicate that the DOJ requested the courts to return 119,000 BTC to Bitfinex, but no on-chain evidence suggests it has already been done.
Where is the Rest of the BTC?
The U.S. government’s actual Bitcoin holdings are now in doubt. Without on-chain proof-of-reserves or centralized reporting, nobody knows how much BTC the U.S. owns — or who controls it.
Several online theories suggest that USMS might not be the sole Bitcoin custodian. As per on-chain pundits, other federal agencies may still hold seized BTC pending legal resolution.
A few believe the government is using private custodians like Coinbase (2024 deal) and Anchorage Digital (2021), which may be managing assets off USMS books, explaining the discrepancy.
Another theory suggests that some seized BTC might be in limbo across multiple agencies, without being accounted for in a public ledger or USMS filings.
One alarming report suggests that USMS still uses Excel spreadsheets to manage BTC custody, which raises serious operational risk concerns.
Strategic Bitcoin Reserve Fallout
The small amount of traceable BTC under the USMS shocked and surprised many, especially those hoping to see a strategic Bitcoin reserve soon.
Senator Cynthia Lummis raised concerns about the small BTC holding by USMS and said:
“I’m alarmed by reports that the U.S. has sold off over 80% of its Bitcoin reserves, leaving just ~29,000 coins. If true, this is a total strategic blunder and will set the United States back years in the Bitcoin race.”
The current BTC holding, as per USMS, means the U.S. holds less BTC than most other countries, which could prove to be a key hurdle in the country’s strategic Bitcoin reserve.
