U.S. Government Loses $2 billion (Of Citizen’s Money) On Early Bitcoin Trade
Ever wondered who is paying for all these FBI investigations? It’s you, me, and every other tax paying citizen. However, it turns out the government and FBI department could have gone a long way to foot the bill by doing absolutely nothing. Yes, if the government sat on their hands, they would have amassed a windfall in excess of $2 billion. The source? Bitcoin.
In 2013, according to New York Federal Court documents, the government seized 144,336 bitcoin from Ross William Ulbricht, the founder of online black marketplace Silk Road. The underground website was shut down for a raft of illegal activities both in the U.S. and offshore. “These purchases included heroin, cocaine, ecstasy, and LSD, among other illegal drugs, and were filled by vendors believed to be located in more than 10 different countries, including the United States, Germany, the Netherlands, Canada, the United Kingdom, Spain, Ireland, Italy, Austria, and France,” the court documents said.
However, four years on from the seizure of the now famed cryptocurrency, the Department of Justice released a statement detailing exactly what happened to the prized stash of coins. “These Bitcoins were ultimately sold by the United States Marshals Service pursuant to Court order for $48,238,116,” the DoJ press release said.
That may sound like a lot of money, but it turns out the coins were sold for a paltry $334 each. Now, after trading through $1000 a coin, then $10,000 a coin, and even reaching $20,000 a coin on some exchanges, the U.S. government has certainly “left some money on the table,” as a trader would say. How much exactly? Around $2.3 billion.
With bitcoin trading at $16,500 at time of writing this article,144,336 bitcoin is valued at $2.38 billion and makes up nearly 1 percent of the entire bitcoin market. And it’s not just the $2 billion the government passed up – it may have beaten the Winklevoss twins to become the first bitcoin billionaire. (See also: Winklevoss Twins Are Bitcoin’s First Billionaires)
While the government is ok holding trillions of dollars of debt, a handful of bitcoin is outside its comfort zone. After the release of the Justice Department statement, spokeswoman Dawn Dearden told CNBC that the department is not in the business of looking for investments in its seized assets. So a missed opportunity maybe, but at least they (the Justice Department) got more than a few pizzas for the hard-working folk in Washington.