- Chainalysis could help the US government with the sale of the 69,369 Bitcoin (BTC) seized last week.
- The sale could be an “epic entry opportunity” for institutional investors.
Chainalysis, a blockchain analysis company, recently announced the launch of a program for the recovery of Bitcoin and other cryptocurrencies to assist government agencies and insolvency practitioners in the handling, storage, recovery and monitoring of seized assets. The announcement follows the largest U.S. government seizure to date less than two weeks ago.
As CNF reported, the US Department of Justice managed to seize 69,369 Bitcoin (BTC) worth over $1 billion that was related to the legendary darknet platform, Silk Road. Chainalysis contributed significantly to the success of the operation with its tools and investigative support. The company helped law enforcement agencies identify and investigate the crypto-wallets.
As law enforcement, as Chainalysis notes, becomes more sophisticated in investigating illegal activities involving cryptocurrencies, including the confiscation of illegal proceeds, the need for cryptocurrency recovery services is growing. For this reason the company has now developed a new service:
When law enforcement discovers and investigates illicit cryptocurrency assets, they need to seize and store them until they can be legally forfeited. As such, government agencies and insolvency practitioners – licensed professionals who advise on insolvency matters – need a safe way to track, store, and ultimately sell seized cryptocurrency assets for fiat currency.
Jason Bonds, Chief Revenue Officer, Chainalysis stated that “cryptocurrencies are becoming more and more prevalent” and “are increasingly used by good and bad players alike”. As governments become more successful in eradicating bad actors, “assisting in the recovery and realization of assets is a natural next step,” he said.
To this end, Chainalysis will work with Asset Reality, which has an “experienced team of legal and law enforcement experts” on an international level, to determine how confiscated cryptocurrencies can be sold.
Chainalysis could help the U.S. government sell the Bitcoins
In other words, Chainalysis could soon be helping the US government sell more than 69,000 BTC. Meanwhile, as Messari CEO Ryan Selkis speculated, the sale could be “an epic institutional entry opportunity”. He also stated that Square, Fidelity or even PayPal might be interested in bidding for the coins:
(…) In fact, these auctions will be epic institutional onboarding opportunities. The winner of a direct purchase from the U.S. authorities, is essentially buying “virgin” coins. Square or Fidelity or PayPal or DCG, etc will be among the winners of this auction.
Meanwhile, some observers suggested that the U.S. government should not sell the seized Bitcoin at all.
Controversial opinion: the DOJ should not sell seized Bitcoins, it should begin stockpiling a national reserve of BTC to back the USD after the fiat era ends.