Trump’s “Digital Asset Stockpile”

On January 23, 2025, President Donald J. Trump signed an executive order entitled “STRENGTHENING AMERICAN LEADERSHIP IN DIGITAL FINANCIAL TECHNOLOGY” referencing a digital asset stockpile.

Section 4(c)(ii) provides:

The Working Group shall evaluate the potential creation and maintenance of a national digital asset stockpile and propose criteria for establishing such a stockpile, potentially derived from cryptocurrencies lawfully seized by the Federal Government through its law enforcement efforts.

This concept isn’t new. On July 31, 2024, Senator Cynthia Lummis (R-WY) introduced to the 118th Congress the “Boosting Innovation, Technology, and Competitiveness through Optimized Investment Nationwide Act of 2024” (“BITCOIN Act”). The proposed legislation mandates that all bitcoin held by any Federal agency be transferred to the Treasury to be held in a strategic bitcoin reserve. Additionally, it required the Secretary of the Treasury to purchase “not more than 200,000 Bitcoins per year over a 5-year period, for a total acquisition of 1,000,000 Bitcoins” to be held for at least 20 years.

Such a plan would devalue the dollar even more and allow Bitcoin hoarders to cash out their holdings for real money, representing the most significant transfers of wealth in world history.

Adverse Consequences of a Surge in Cryptocurrency Forfeitures

What are the chances that such policies will lead to a sudden surge in the seizure of cryptocurrency assets for federal civil forfeiture proceedings? A surge in crypto seizures tied to a federal stockpile policy could have several adverse effects.

First, crypto investors and businesses might become wary of holding large balances in digital wallets, especially if enforcement actions appear arbitrary or overly aggressive.

Second, exchanges and crypto platforms could face heightened regulation, making it more difficult for users to transact anonymously or move funds without triggering red flags.

Third, large-scale seizures and subsequent auctions of cryptocurrency by the federal government could impact market prices, introducing unpredictable fluctuations.

What Is a “Digital Asset Stockpile”?

The “digital asset stockpile” referenced in Section 4(c)(ii) of the executive order would likely consist of seized crypto assets from civil and criminal forfeitures.

The Department of Justice (DOJ), Internal Revenue Service (IRS), and Homeland Security Investigations (HSI) have already made headlines for massive cryptocurrency seizures.

As of January 2025, the U.S. government holds approximately 200,000 bitcoins, valued at around $21 billion.

Seizures over the past ten (10) years include:

• 2016:
  • The Department of Justice seized nearly 120,000 bitcoins in connection with the Bitfinex hack, marking one of the largest cryptocurrency seizures to date.
• 2017:
  • In July 2017, AlphaBay, a prominent dark web marketplace facilitating the sale of illegal goods and services, was seized and shut down through a coordinated international law enforcement operation. The site’s founder, Alexandre Cazes, was arrested in Thailand, where authorities seized his assets, including cryptocurrencies.
  • In November 2017, approximately $31 million worth of Tether (USDT) tokens were stolen from Tether’s treasury wallet. In response, Tether implemented an emergency hard fork to render the stolen to tokens untradeable.
• 2018:
  • In April 2018, the U.S. Department of Justice seized Backpage.com, a classified advertising website accused of facilitating human trafficking and other illegal activities. In addition to shutting down the site, authorities seized cryptocurrency assets used in connection with its operations, including Bitcoin and other digital currencies.
  • Throughout 2018, the U.S. government targeted drug traffickers and other criminal networks using cryptocurrencies to launder money or conduct transactions on the dark web. Law enforcement agencies seized various amounts of Bitcoin and other digital currencies during these operations.
• 2019:
  • The U.S. Department of Justice announced the disruption of three terror finance campaigns involving cryptocurrency. The operation led to the seizure of over 150 cryptocurrency accounts associated with organizations like al-Qassam Brigades, al-Qaeda, and Islamic State of Iraq and the Levant (ISIS).
• 2020:
  • The U.S. Department of Justice seized approximately 69,370 bitcoins in November, valued at over $1 billion at the time, linked to the Silk Road dark web marketplace, one of the largest cryptocurrency seizures in history.
• 2021:
  • As of June 2021, the USMS had nearly 200 DOJ cryptocurrency seizures comprised of 22 different types of seized cryptocurrency in its custody valued at about $466 million.
  • In June 2021, the Department of Justice announced the recovery of approximately $2.3 million worth of Bitcoin from the Colonial Pipeline ransomware attackers.
  • In November 2021, law enforcement seized over 50,676 Bitcoin, valued at approximately $3.36 billion at the time, from James Zhong. Zhong had unlawfully obtained these funds from the Silk Road dark web marketplace in 2012.
  • That same year, the IRS seized $1.2 billion in cryptocurrency, accounting for over 90% of its total asset seizures that year.

• 2022:
  • The Department of Justice announced the seizure of $3.6 billion worth of bitcoin in connection with the 2016 Bitfinex hack, marking the largest financial seizure in U.S. history at that time.
  • In November 2022, authorities seized over 50,676 bitcoins, valued at approximately $3.36 billion, from James Zhong. Zhong unlawfully obtained these funds from the Silk Road dark web marketplace in 2012.
• 2023:
  • The U.S. Secret Service announced the seizure of nearly $9 million worth of Tether (USDT). These funds were linked to a cyber scam organization that exploited over 70 victims through romance and cryptocurrency confidence scams, commonly known as “pig butchering.”
  • That same year, the FBI seized millions of dollars in various cryptocurrencies, predominantly Ethereum (ETH) and Ethereum-based assets. These seizures were part of broader efforts to combat cryptocurrency fraud and related crimes.
• 2024:
  • In 2024, the U.S. government transferred nearly $2 billion worth of Bitcoin, previously seized from the Silk Road case, to Coinbase, likely in preparation for liquidation or other administrative actions.