Seizure, a practice that allows States to deprive people involved in criminal acts of property that is the proceeds of crime, is taking an unusual direction. This is due to a growing trend in recent years: the seizure of cryptocurrencies.

Although bitcoin (BTC) and other cryptocurrencies are not a fundamental component of crime, in digital crimes these assets are used, directly or indirectly, to obtain other people's money.

Hence, authorities have sought ways to recover illicit funds kept in wallets handled by criminals. The situation has led governments to get their hands on large amounts of digital currencies, turning these entities into new bitcoin whales (addresses with more than 1,000 bitcoins).

The figures that many countries manage for this concept are exorbitant. Statistics published by the Buy Bitcoin Worldwide platform show that the governments of the United States, China, Germany, and Finland are the four countries with the largest holdings of bitcoins derived from seizure processes.

The bitcoins held by these world governments are valued at more than $19.7 billion, at the time of writing. There are almost 500,000 BTC that give these countries power to influence the market.

The US Department of Justice stands out as the main whale, managing about 215,000 bitcoins. Most of them come from seizures made on the illegal Silk Road market, one of the most controversial dark web marketplaces of the last decade.

China is the second largest whale. Reports indicate that the Asian powerhouse holds a total of 194,000 BTC as a result of the seizure of the scam platform Plus Token. This amount of bitcoins represents 0.92% of the cryptocurrency's total supply, set at 21 million BTC. It is estimated that they also possess 833,000 ether confiscated by the same scam.

It is striking that despite the strong prohibitions that exist in China, this is one of the governments with the largest amounts of cryptocurrencies in its hands.

In the case of Germany, the country is known to manage more than 50,000 bitcoins. Part of the confiscation was carried out during this month of January, within the framework of an investigation of fraud through a website that sold pirated films. The authorities are evaluating the fate of the seized bitcoins, since formal charges have not yet been filed against the portal administrators.    

Finland and Georgia rank as the fourth and fifth countries with the largest possession of bitcoins resulting from seizures. Between the two they add up to more than 2,000 BTC; less than 0.1% of the total supply.  

In 2021, the bitcoins held by Finland are the result of confiscations related to one of the largest drug suppliers on the dark web, known as  Douppikauppa.  

Part of the bitcoins managed by Finland were donated to Ukraine as funds for the war. Another part has been auctioned and liquidated on the market. 

Georgia, for its part, handles a small amount of digital currencies derived from confiscations (estimated at 66 BTC).  

Although Georgia's figure is small compared to what other countries have, as it is equivalent to USD 2 million at the current exchange rate, it can continue to revalue . A fact that increases the chances that several world governments will become whales, as bitcoin continues to rise in price.  

To the previous list we must add the United Kingdom, which on January 31 just reported the confiscation of more than 61,000 BTC due to the arrest in its country of people involved in fraud in China. 

A “round business” that is booming

The previous data turns the seizure of bitcoin into a big business for the States that – whether they want to or not – are holding bitcoin. Many claim to be not entirely clear about how to manage these resources, as they do not have laws on the subject.

This has led governments such as South Korea to prohibit seizures of cryptocurrencies. Others, such as Finland and the United States, choose to liquidate crypto assets.  

In that sense, the Finnish government recognizes that, despite the “moral dilemma” it faces due to these sales, it has been “one of the best investments they have been able to make.”  

The United States, for its part, has established the sale of these assets as a line of action, although the use of the money resulting from these liquidations is not very clear.  

In any case, it is expected that the list of countries, and the amounts of seizures, will continue to increase. Former FBI analyst and current director of Threat Intelligence at Abnormal Security, Crane Hassold, assures that this is because governments are becoming increasingly trained in managing cryptoasset portfolios.