Selling Bitcoins Too Early, The U.S. Government Predicted To Have Lost $1.7 Billion

The United States has what it calls the virtual currency law which is meant to regulate the transactions of cryptocurrencies in the country.

The U.S. The Commodity Futures Trading Commission regards cryptocurrencies as commodities, requiring all virtual currencies to register themselves if they want to be traded in the U.S..

Between 2014 and 2020, the U.S. authorities have at least seized 185,230 BTC through criminal investigations.

Using back-dated market rates, cryptocurrency enthusiast Jameson Lopp built a tracker on GitHub to estimate the amount of money the U.S. should have generated.

According to the tracker, the U.S. Marshals earned about $151 million by auctioning the Bitcoins from 2014 to 2020. If it only held the Bitcoins for at least until early February when the cryptocurrency's price reached a little above $10,000, the government would’ve netted $1.85 billion.

By selling them too early, Lopp speculated that the U.S. is likely to have lost around $1.7 billion.

It's speculated that the U.S. government sold its Bitcoins for just $818 each, on average.

This is a far cry from the UK. The government in the country was also auctioning criminally-seized cryptocurrency, having conducted BTC auctions for the first time late 2019.

In September, Hard Fork reported that Wilsons Auctions sold Bitcoin on behalf of the government, and generated $369,000. What this means, 1 BTC was sold for $8,365, 0.5 BTC for $4,236, and 0.25 BTC for $2,426.

At the time, Bitcoin traded on cryptocurrency exchanges for a little over $8,000, which means that the UK finalized those auctions at above market rates.

Bulgaria’s government trumps both the U.S. and the UK, which had been long-rumored to own at least 200,000 BTC ($2 billion) seized from criminals. These Bitcoins were sold to several sovereign wealth funds and Asian investors for around $16,000 each, which is a lot more than the $818 per Bitcoin the U.S. got.

This U.S. sees cryptocurrencies as alternatives to traditional currencies and traditional financial institutions. This is why the digital coins are subject to regulations.

The U.S. considers the following cryptocurrency-related activities illegal:

• Money laundering: Prevalent as it can be, because the government cannot easily detect money laundering crimes, especially when they are related to cryptocurrencies.
• Transactions on Tor: Cryptocurrencies are popular in Dark web markets on the Tor network.

• Securities fraud: The U.S. Securities and Exchange Commission (SEC) treats securities crimes committed with cryptocurrencies the same as money.
• Online gambling: The Unlawful Internet Gambling Enforcement Act (UIGEA) does not expressly prohibit online gambling, but it does make it illegal for an online gambling business to knowingly accept fund transfers. And here, many Bitcoin gambling sites are circumventing this legislation by keeping their funds in cryptocurrency wallets.