UK Government Prepares to Dump $7 Billion in Seized Bitcoin – What It Means for Crypto Markets

The UK just signaled a seismic shift in crypto policy—by unloading a $7 billion Bitcoin trove seized from criminals. Here’s why this move could rattle markets… or prove embarrassingly timed.

The fire sale no one saw coming

Whitehall mandarins are quietly prepping what might become the largest state-sponsored BTC sell-off in history. Sources confirm the stash—confiscated during dark web busts—is being transferred to institutional brokers.

Market impact: tsunami or ripple?

While $7B represents just 0.3% of Bitcoin’s total cap, OTC specialists warn the sudden supply could suppress prices short-term. ‘Governments always buy high and sell low,’ quipped one hedge fund manager—between sips of his £15 almond latte.

The custody conundrum

Critics question why HMG held the assets this long instead of immediate liquidation. ‘Austerity for thee, HODLing for me,’ tweeted a crypto anarchist as Treasury officials reportedly studied ‘laser eyes’ memes.

One thing’s certain: when bureaucrats start playing whale, traders should grab their snorkels.

UK Chancellor Turns To Crypto Proceeds To Plug Financial Holes – Report

According to a report by local media Telegraph, the UK Home Office is presently exploring means to offload at least £5 billion ($6.71 billion) in seized BTC as the Labor-led government reportedly struggles with financing the public budget following recent policy reversals on welfare and winter fuel allowance by Prime Minister Kier Starmer.

The Telegraph explains that the Chancellor of the Exchequer, Rachel Reeves, is looking to seal a budget hole of £20 billion amid rising inflation figures, higher borrowing costs, and weak economic growth. While some ministers have proposed a rise in taxes to fill this gap, Reeves is currently exploring other means to alleviate the financial mayhem, including sales of confiscated crypto assets from illicit activities.

The exact amount of digital assets seized by the UK government is unknown. However, a specific police operation in 2018 resulted in the impoundment of 61,000 BTC from a Chinese ponzi scheme. These assets, valued just above £300 million ($402.36 million) at the time of seizure, are now worth £5.4 billion ($7.24 million) at the present market rate, representing a resounding 1700% price gain.

UK To Launch Crypto Storage System

In handling the purported BTC offload, Telegraph further reports that the UK Home Office is looking to develop a crypto storage and realization system that will enable law enforcement agents to effectively preserve and sell seized digital assets. Official documents reveal this project is expected to cost £40 million ($53.65 million), with the service provider set to receive a further commission on each asset sale.

Interestingly, it’s worth noting that the UK government has previously kicked against the idea of a National bitcoin Reserve following suggestions by Nigel Farage, leader of the Reform UK party. But these recent plans may suggest that government figures may now acknowledge crypto assets as a source of significant revenue.

Meanwhile, confiscated crime proceeds are usually split between the UK Treasury and law enforcement agencies. Therefore, it remains unknown what the exact percentage of the reported £5.4 billion BTC sale will be credited to balance the UK government’s books.

At press time, Bitcoin continues to trade at $117,856 following a 0.07% gain in the past day.