Since March, the U.S. Treasury Department has been authorized to store seized digital assets in the “Strategic Bitcoin Reserve,” according to data from Galaxy Research.
Reserves increased by 64% overnight due to the addition of assets from Prince Group research. The US government's Bitcoin holdings currently exceed the Bitcoin holdings of every institution except MicroStrategy.
Galaxy Research reported that this was the largest asset seizure operation in the history of the US Department of Justice, seizing 127,271 Bitcoins (approximately $15 billion).
The person at the center of the investigation is Cheng Ji, chairman of Cambodia-based Prince Holding Group. Prosecutors allege Chen ran an extensive criminal network that included online illegal activities, forced labor camps, and an investment scam known as “pig butchering.” The illegal proceeds were allegedly laundered through crypto mining companies such as Warp Data (based in Lao-Texas) and Rubian (based in China).
LuBian made headlines in 2020 with a critical private key vulnerability (“Milk Sad”). This vulnerability resulted in the theft of 127,000 BTC. It is noteworthy that the wallet address listed in the latest Justice Department indictment matches the address of LuBian.com, which was attacked during this period due to weak encryption.
According to Galaxy's analysis, Prince Group and Rubian were not two separate organizations, but different branches of the same criminal organization. The FBI seized the keys to Chen's personal wallet and discovered over 127,000 BTC in Bitcoin. Chen is reportedly still at large, but has been added to OFAC's sanctions list.
This development is consistent with Washington's new fiscal strategy. An executive order enacted in March stipulates that seized digital assets be added to government reserves without being sold. Therefore, the US positions Bitcoin as a store of value similar to gold reserves, maintaining its status as “digital gold.”
With the latest seizure, the U.S. strategic Bitcoin reserve is equivalent to about 3.5% of the country's gold holdings in dollar terms. According to a report by Galaxy Research, “The U.S. government is currently the world's largest holder of Bitcoin outside of MicroStrategy.”
*This is not investment advice.
