5 Largest Seizures Underpinning the US Bitcoin Stockpile

President Donald Trump signed an executive order in March 2025, ordering the creation of a strategic Bitcoin reserve with the aim of positioning the US as a leader among nations in government digital asset strategy.

With this order, Bitcoin (BTC +0.34%) is being treated as a reserve asset. Currently, the US maintains several strategic reserves of key materials and scarce resources, including gold, crude oil, pharmaceuticals, medical supplies, and nuclear weapons, and now Bitcoin has been added to this list.

With the Executive Order, President Trump has directed the US Department of the Treasury to administer and maintain custody of Bitcoin.

But where does the Bitcoin for the reserve come from? Well, the government won’t be making any new purchases, at least not yet. The Secretaries of the Treasury and Commerce have been directed to develop strategies to acquire digital assets without imposing incremental costs on US taxpayers.

For now, the reserve is being created using assets that the government seizes from criminals. The executive order states:

“The Strategic Bitcoin Reserve will be capitalized with bitcoin owned by the Department of the Treasury that was forfeited as part of criminal or civil asset forfeiture proceedings.” 

Back in August, Treasury Secretary Scott Bessent said that the US already has an estimated $15 billion to $20 billion in forfeited Bitcoin. The US government is actually the largest Bitcoin holder, followed by China, which has 194,000 BTC. 

Other countries like the UK have also accumulated a significant volume of seized Bitcoin, while Bhutan and El Salvador have actively mined and/or purchased the cryptocurrency in the open market. Meanwhile, countries like the Czech Republic and Sweden, as well as multiple US states, are considering establishing a strategic crypto reserve.

While fresh Bitcoin buys are out of the picture, there’s a huge pool of Bitcoin held by illicit entities, offering a big opportunity for governments. There is actually more than $75 billion worth of crypto tied to illicit activity on-chain that’s within the reach of law enforcement, according to research by blockchain analytics firm Chainalysis.

Illicit entities are holding almost $15 billion in on-chain balances in 2025, with Bitcoin making up about 75% of it. Meanwhile, wallets that have received at least 10% of their total funds from criminal sources hold more than $60 billion. 

Chainalysis has found that vendors and administrators for darknet marketplaces control over $40 billion.

While $75 bln is a massive opportunity, not all of the funds go straight to the government even if seized. In certain cases and jurisdictions, funds can be withheld to repay victims, prosecute criminals, or support additional recovery efforts by law enforcement.

Data from Arkham shows that the US government’s Bitcoin reserve has now reached 325.447K BTC worth over $35 billion. Its other prominent holdings include 351.399M USDT (USDT +0.01%) (351.4 mln) and 60.695K ETH (ETH +0.99%) (227.7 mln), while WBTC, BNB (BNB +6.29%), WBNB, WETH, and BUSD are also among the assets seized by the government.

Now, let’s take a look at the largest seizures that are underpinning the US Bitcoin stockpile.

At-a-Glance: Biggest U.S. Bitcoin Seizures

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1. Prince Group Pig-Butchering Empire: Largest 127,271 BTC Seizure in U.S. History

This month, the US government made potentially the biggest ever addition to its Bitcoin strategic reserve as the US Department of Justice (DOJ) announced a record BTC haul. On October 14, the government agency seized as much as 127,271 BTC worth about $15 billion, marking the largest cryptocurrency forfeiture action in its history.

The DOJ charged a man named Chen Zhi, also known as Vincent, 37, in the Eastern District of New York and seven unnamed co-conspirators, of money laundering and wire fraud. 

If convicted, Zhi faces a maximum penalty of 40 years in prison. He hasn’t been apprehended, though, and remains at large.

“As alleged, the defendant was the mastermind behind a sprawling cyber-fraud empire operating under the Prince Group umbrella, a criminal enterprise built on human suffering. Trafficked workers were confined in prison-like compounds and forced to carry out online scams on an industrial scale.”

– The department in a statement

The agency linked Zhi to a “pig butchering” scheme in Cambodia, a type of online scam where fraudsters earn victims’ trust over time before tricking them into giving crypto or making increasing financial contributions before disappearing with their money.

Pig-butchering scams have stolen a whopping $75 billion from victims around the world, a study revealed last year. The department said:

“Individuals held against their will in the compounds engaged in cryptocurrency investment fraud schemes, known as ‘pig-butchering’ scams, that stole billions of dollars from victims in the United States and around the world.” 

Investigators found Zhi held the Bitcoin in unhosted, or self-custody, wallets where the owner has full control over their private keys and funds. This means Zhi was personally managing access to the funds.

Zhi, along with others, spent money on luxury travel, entertainment, and extravagant purchases such as private jets, yachts, vacation homes, watches, high-end collectibles, and even a rare Picasso painting.

However, the sheer scale of the financial activity and the scope of the fraud drew the attention of multiple international agencies. In response, US and UK officials launched a coordinated operation against the giant Cambodian organization and its leader, in what could be described as one of the biggest actions ever undertaken by law enforcement.

Following the crackdown, the US Treasury Department’s Office of Foreign Assets Control (OFAC) issued financial sanctions against 146 “targets,” including individuals and shell companies linked to the Prince Group Transnational Criminal Organization.

The organized crime entity consists of the Prince Holding Group, which publicly describes itself as “one of the largest conglomerates in Cambodia” involved in financial services and real estate development, along with its chairman and CEO, Zhi, and his associates and business partners. The Group operated more than 100 businesses in 30 countries.

According to DOJ allegations, the organization had secretly grown into one of Asia’s largest transnational criminal networks, running dozens of scam compounds across Myanmar, Laos, and Cambodia. Two of these scam centers alone had 1,250 mobile phones that “controlled” as many as 76,000 social media accounts, according to documents allegedly seized from Zhi.

“The defendant directed one of the largest investment fraud operations in history, fueling an illicit industry that is reaching epidemic proportions. Prince Group’s investment scams have caused billions of dollars in losses and untold misery to victims around the world.” 

– Joseph Nocella Jr., a US attorney for the Eastern District of New York, in a statement

An analysis by Elliptic shows that these are the very same Bitcoins that were “stolen” in 2020 from a Chinese mining business, LuBian.

“It’s important to note that this seizure is extraordinary not only for its scale but for what it represents,” said Ari Redbord, global head of policy at crypto analytics firm TRM Labs. “By targeting the financial architecture—the shell companies, banks, exchanges, and real estate that move and hide these proceeds—the US and UK are dismantling the economic engine that sustains these crimes,” he added. “This is what a 21st-century counter-threat finance campaign looks like—coordinated, data-driven, and global.”

With this crackdown, Trump’s planned Bitcoin Strategic Reserve is poised to win a huge windfall, provided the Treasury can successfully seize the Bitcoin.

“This is a victory for human rights, financial integrity, and American leadership,” said US Senator Cynthia Lummis (R-WY), adding that the Bitcoin seizure underscores the need to codify how seized Bitcoin is stored, returned to victims, and safeguarded for future generations. “Turning criminal proceeds into assets that strengthen America’s Strategic Bitcoin Reserve shows how sound policy can turn wrongdoing into lasting national value,” she added.

2. Bitfinex Hack: Manhattan Couple’s 95,000 Bitcoin Haul

Founded in 2012, Bitfinex is one of the longest-running centralized cryptocurrency exchanges (CEXs) in the world. Even today, the platform manages more than half a billion dollars in daily trading volume.

Back in 2016, the exchange was hacked for 119,756 BTC, worth $72 million at the time but growing to a whopping $4.5 billion by the time of seizure. The Hong Kong-based exchange suffered a security breach, which caused the price of Bitcoin to plummet by 20%. Following the breach, the exchange halted all Bitcoin trading and withdrawals. To compensate its users, the exchange issued BFX tokens in proportion to their losses.

Six years after the hack, US law enforcement set a record by seizing almost 95,000 BTC, then worth $3.6 billion, from a couple who pleaded guilty to laundering funds stolen during the hack.

The DOJ seized the stolen Bitcoin in February 2022 as part of an investigation into Ilya Lichtenstein, co-founder of a sales company MixRank, and his wife Heather Morgan, a columnist and online rapper under the nickname “Razzlekhan”. The Manhattan couple was arrested in New York and accused of being the masterminds of a money laundering scheme.

Most of the coins that they stole were moved from Bitfinex’s addresses to a wallet that Lichtenstein controlled. And the keys to the wallet were found in one of his cloud storage accounts, from which the authorities obtained a spreadsheet that contained wallet addresses and authentication details tied to the stolen funds, as well as logins for crypto exchanges used.

While the majority of the hacked Bitcoin remained in the original wallet, some funds were converted to fiat currency and used to purchase gold, NFTs, a PlayStation, and Uber rides.

“What was amazing about this case is the laundry list of obfuscation techniques used,” said TRM Labs’ Redbord. This includes chain-hopping, which is transferring funds from one crypto to another to make them more difficult to follow. The couple also moved their money through the Alphabay dark web market, which offered “mixer” service by default to “break the link to the source of your funds.”

In 2023, the US federal authorities charged Lichtenstein and Morgan with conspiring to launder the stolen Bitcoin.

In November 2024, Lichtenstein received a five-year prison sentence for his role in laundering the stolen funds, while Morgan was handed an 18-month term for her involvement in fraud and conspiracy, along with three years of supervised release for both.

About 95,000 BTC seized from the Bitfinex hack now makes up a significant share of the government’s Bitcoin reserves. The DOJ has, however, advised the court that the confiscated BTC be transferred back to the exchange.

3. Silk Road Exploit: James Zhong’s Hidden 50,000 BTC Stash

In November 2022, the DOJ seized about 50,676 Bitcoin, worth $3.36 billion at the time, as a result of a previously unannounced raid on the residence of James Zhong, who later pleaded guilty to wire fraud.

According to the authorities, Zhong stole BTC from the dark web marketplace Silk Road by exploiting its vulnerabilities, which enabled him to hack the platform.

“For almost ten years, the whereabouts of this massive chunk of missing Bitcoin had ballooned into an over $3.3 billion mystery.”

– US Attorney Damian Williams said in a statement

It was back in 2012 that Zong created several fraudulent accounts on Silk Road and then funded them with Bitcoin. He then executed 140 transactions in quick succession, tricking the marketplace’s withdrawal-processing system to release about 50,000 BTC into his accounts. He then transferred all the Bitcoin to different wallet addresses that he controlled.

Zong lived a very lavish lifestyle, yet left the majority of his stolen stash untouched. A fatal mistake that led to his capture was making a 911 call to report a theft of hundreds of thousands of dollars in crypto from his residence. 

Then, while tracing the digital wallets containing the stolen Silk Road assets, Chainalysis spotted an $800 transfer to a popular crypto exchange that followed KYC rules, thus revealing the identity of the account.

To confirm their findings, the IRS Criminal Investigation searched Zhong’s house in 2021 under the ruse that they were investigating the crime he had reported a year before.

A search into Zhong’s house revealed a ‘single-board‘ computer hidden inside a popcorn tin in a bathroom closet, containing millions of dollars worth of Bitcoin and a safe that contained precious metals, stacks of cash, and a wallet with Bitcoin from the original Silk Road hack.

“Thanks to state-of-the-art cryptocurrency tracing and good old-fashioned police work, law enforcement located and recovered this impressive cache of crime proceeds.”

– US Attorney Damian Williams said about the seizure

Zhong was charged with wire fraud and, after pleading guilty, was sentenced to one year and one day in federal prison. He didn’t get to keep the stolen Bitcoin as the US government seized those assets.

4. Silk Road ‘Individual X’ Hacker’s 70,000 BTC Seizure

Silk Road, the dark web marketplace, was founded by Ross Ulbricht in 2011, and two years later, it was shut down by the FBI. In 2015, Ulbricht was charged with continuing a criminal enterprise and conspiracy to launder money, commit computer hacking, and traffic narcotics through the internet. He was given two life sentences without possibility of parole, but received a “full and unconditional pardon” from President Trump in 2025.

During Ulbricht’s arrest, the FBI seized 144,000 BTC, which were auctioned off by the US Marshals Service for around $48 million in 2014 and 2015.

Then, in November 2020, the US Treasury seized another $1 billion worth of Bitcoin that was stolen by a hacker referred to as ‘Individual X.‘ This unnamed person successfully hacked the Silk Road between May 2012 and April 2013, stealing almost 70,000 BTC.

The coins were first moved from the Silk Road addresses to two other addresses before being consolidated into a single address. 101 BTC of them were then moved to BTC-e.

With the help of a crypto company, the authorities analyzed Bitcoin transactions executed by Silk Road and identified 54 previously undetected BTC transactions that were the proceeds of unlawful activity.

The authorities were also able to find Individual X and demanded the forfeiture of the funds, which the mysterious hacker agreed to. “On November 3, 2020, Individual X signed a Consent and Agreement to Forfeiture with the US Attorney’s Office, Northern District of California. In that agreement, Individual X consented to the forfeiture of the Defendant Property to the United States government,” reads the court document. 

5. BTC-e Takedown: U.S. Targets Exchange Wallets in Civil Forfeiture

BTC-e was a cryptocurrency exchange that primarily served the Russian market. In 2017, the U.S. seized BTC-e’s website, servers, and portions of its wallets, and in 2025 filed a civil forfeiture complaint targeting all crypto held in the exchange’s operating wallets as of July 25, 2017. Investigators traced about 929.5 BTC and ≈485,705 ETH to specific addresses tied to BTC-e around the takedown, with some funds later moved to successor platforms.

The law enforcement took it down because it was a “significant cybercrime and online money laundering entity that allowed its users to trade in bitcoin with high levels of anonymity and developed a customer base heavily reliant on criminal activity.” Funds stolen from the Mt. Gox hack were also laundered through BTC-e.

As per the DOJ, BTC-e failed to register with FinCEN and had no meaningful AML/KYC controls. Also, the agency alleges that the exchange facilitates transactions tied to hacking, darknet markets, ransomware, and other illicit flows.

Its co-founder, Alexander Vinnik, meanwhile, has been charged with operating an alleged international money laundering scheme, through which he helped criminals launder billions of dollars. Last year, he pleaded guilty to those charges and faced up to two decades in prison before being released this year in a prisoner swap with Russia.

A few months ago, the DOJ filed a civil asset forfeiture complaint, seeking forfeiture of all crypto assets held in BTC-e’s operating wallets at the time of seizure.

Final Thoughts 

The establishment of the US Strategic Bitcoin Reserve marks a real policy shift that puts the trillion-dollar digital asset on par with reserve currencies. By viewing crypto as more than speculative instruments, the government is essentially giving it the same credibility as gold.

What’s particularly notable is that the SBR emphasizes holding onto forfeited cryptocurrency for the long term rather than auctioning it off right away, which is what the US government has done all this time. But of course, just because the government has seized Bitcoin doesn’t mean they automatically get to keep it. Some portions may be awarded to victims, reversed on appeal, or adjusted by courts.

If any of the seized assets are applied toward compensating defrauded parties, that would reduce what’s added to the Bitcoin reserve. And let’s not forget, the US government doesn’t exactly provide real-time updates or full transparency about how much Bitcoin it’s holding from each major seizure.

Still, by allowing the government to retain forfeited Bitcoin, the Trump administration is working to preserve the asset’s long-term value, maintain financial stability, enhance national security, and strengthen economic resilience.

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