Author: Tristan Greene, CoinTelegraph; Compiler: Deng Tong, Golden Finance
Donald Trump intends to make the United States the cryptocurrency capital of the planet. The former president promised this and more during a rousing speech at the Bitcoin 2024 conference in Nashville, Tennessee on July 27. But some of the Republican candidate’s comments may have caused panic among cryptocurrency advocates.
While Trump’s speech focused primarily on how Bitcoin and the community around it are a positive force for the United States, he did lay out a few specifics. His main promise was that the United States would not give up its current Bitcoin reserves if he were re-elected.
According to Trump:
“For too long, our government has violated the cardinal rule that every Bitcoin user knows by heart: Never sell your Bitcoin. If elected, my administration will adopt policies whereby the United States retains 100% of all Bitcoin currently held or acquired by the U.S. government.”
However, Jameson Lopp, co-founder and CTO of Casa, said, “There is a small problem with the plan that no one is acknowledging.”
Source: Jameson Lopp.
As of April 2024, the U.S. government allegedly holds 212,847 Bitcoins. As of July 28, the total value is approximately $14.4 billion.
Part of these funds came from the Bitfinex cryptocurrency exchange. In 2022, the U.S. government seized “approximately 94,636” BTC from wallets associated with hackers who admitted to stealing 119,754 BTC from the exchange in 2016.
If we remove these cryptocurrencies from government holdings, the U.S. would be left with approximately $8 billion worth of BTC in its coffers.
The investigation into the Bitfinex hack appears to be ongoing. There has been little news since the 2022 seizure. The US recently moved assets related to the hack between wallets in February 2024, but it’s unclear what the Justice Department intends to do with the funds.
There’s also not much legal precedent, which raises a myriad of questions that may not be answered.
First, federal laws regarding asset forfeiture generally don’t prioritize making victims whole again, especially when an investigation may be ongoing.
For example, if the funds were tied to other assets allegedly tied to other alleged crimes, then the Justice Department would be miscarrying its prosecutorial duties if it returned some of the related funds before taking any subsequent action against other suspects.
It could also be illegal for US agents to return the stolen funds in aggregate to a single source distributor in some cases. Conceivably, a judge could order the US to return the stolen funds to affected users under the supervision of a third-party neutral custodian.
All of this is pure speculation while the investigation and any subsequent legal action are ongoing. But there are more factors at play than just legality.
Second, Trump himself has admitted that he intends to hold all of the government’s Bitcoin. But the president may simply be saying that he will not sell Bitcoin in order to convert the assets into fiat currency for a quick profit.
Generally speaking, there is no reason to believe that Trump intends to ignore any court ruling requiring the government to return the funds.
Finally, Trump has made it clear that it is his administration’s “policy” to hold all Bitcoin currently owned by the United States. While this does mean that he will include the Bitfinex assets, it also means that the government will remain flexible.
There is a difference between legislation or executive orders prohibiting government-held cryptocurrency sales and policies targeting such sales.
However, when it comes to Silk Road founder Ross Ulbricht, things are a little simpler. Ulbricht was convicted in 2015 on charges related to drug trafficking, hacking, and money laundering. He was subsequently sentenced to "double life imprisonment" and 40 years in prison, which he is currently serving.
In 2020, the US government seized 50,591 BTC that were allegedly stolen from Ross and Silk Road in a previous hack. As of July 28, these assets would account for approximately $3.4 billion currently held by the US government.
In his Bitcoin 2024 speech, Trump promised to commute Ulbricht's sentence if re-elected.
Even with a commuted sentence, Ulbricht's conviction would still stand. He would essentially be released after serving his sentence, and those funds, labeled as proceeds of crime, would be remitted to the U.S. government.
This is completely different from a pardon, and presidential candidate Robert F. Kennedy Jr. recently said he would pardon Ulbricht on day one if elected.
A pardon would legally absolve Ulbricht of his crimes and technically provide a legal path to recovery.
However, Ulbricht reportedly signed an agreement in 2022 to waive his claim to those funds as part of a deal with the court to repay a $183 million restitution debt. This likely leaves him with no legal claim to the seized Bitcoin going forward.
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