US Marshals’ Bitcoin ‘Forfeiture’ Falls $20B Short—Who’s Counting the Reserves?

Another day, another crypto accounting mystery—this time starring the US Marshals Service. Their seized Bitcoin stash just got a $20B reality check, leaving everyone wondering where the math went sideways.

The ‘Oops’ in the OPM (Other People’s Money) File

When even the feds can’t track their own crypto holdings, it’s either a paperwork glitch or a plot twist for a future Netflix documentary. Either way, Wall Street’s spreadsheet jockeys are having a field day.

Trust Issues: Public Sector Edition

If this were a DeFi protocol, the word ‘rug’ would already be trending. But since it’s the government? Call it ‘creative reserve management’—with a side of audit-proof opacity.

Funny how ‘lost billions’ only make headlines when they’re not yours. *Cough*—looking at you, 2008 bailout architects.

Is the US selling its Bitcoin?

Bitcoin Magazine CEO David Bailey suggested the US likely sold significant portions of its BTC reserves before President Donald Trump’s swearing-in in January. He noted that the lack of visible on-chain activity may not prove anything due to custodial involvement.

He stated:

“I think it is conclusive they’ve been selling without creating onchain footprint.”

Bitcoin analyst Sani, who tracks addresses suspected to be linked to US government wallets, confirmed no recent transactions from those addresses.

However, he pointed out that if custodians like Coinbase were facilitating off-chain swaps, traditional blockchain tracking may no longer clarify government activity.

Sani added:

“If that’s truly what’s happening, then all the on-chain tracking we’ve been doing, mine included, might not matter anymore.”

Senator Cynthia Lummis, a vocal advocate for a national Bitcoin reserve, responded with concern to this development. She said:

“If true, this is a total strategic blunder and sets the United States back years in the bitcoin race.”

Seized vs. forfeited Bitcoin

L33tz clarified that the FOIA request only covered “forfeited” Bitcoin assets legally transferred to government ownership.

According to her, many seized assets, such as those tied to ongoing investigations or hacks like Bitfinex, are not yet government property and may reside with other federal agencies like the DEA or FBI.

She emphasized that platforms like Arkham may misrepresent totals by lumping together seized and forfeited coins. L33tz pointed out:

“For example, Arkham lists 94k BTC from the Bitfinex hack, but forfeiture in the Bitfinex case hasnt been decided, at least last time I checked.”

Blockchain security expert Taylor Monahan also offered further explanation, pointing out that legal custody does not equal ownership.

She noted that in many cases, seized coins remain victims’ property and will never become US government assets.

Monahan highlighted ongoing legal processes, ranging from civil forfeiture to IEEPA, determining the fate of seized property.

She cited several examples, including a case where the FBI currently holds $40 million in crypto linked to an August 2024 theft, but these coins are expected to be returned to the rightful owner under the terms of a plea agreement.

Considering this, Monhan stated:

“Most of the time the coins seized by USG do not become property of the USG. They are returned to the victim that was hacked or defrauded.”