U.S. Poised to Secure $14 Billion in BTC for Strategic Reserve
The U.S. government is set to incorporate approximately 127,271 BTC, estimated to be worth around $14.2 billion, into what it now designates as a Strategic BTC Reserve. In a collaborative effort with UK law enforcement, these coins were seized in relation to a significant crypto asset fraud operation orchestrated by Chen Zhi, a Chinese individual associated with the Cambodia-based Prince Group.
Rather than selling the assets as is customary, the government seems inclined to retain the BTC. This decision signals a potential shift in how governments regard digital assets, indicating that officials now perceive this reserve as a long-lasting financial resource instead of something to be liquidated.
A Protocol of Scams, Trafficking, and Concealed BTC
Based on court documents, Chen Zhi constructed a convoluted and troubling empire merging crypto fraud, political bribery, money laundering, and even human trafficking. His organization operated from several sites in Cambodia, including one named Golden Fortune and another linked to the Jinbei Hotel and Casino.
Reportedly, victims were trafficked to these locations and coerced into participating in sophisticated romance and investment scams known as “pig butchering.” In these schemes, potential victims were engaged for weeks or even months, falsely enticed into relationships or business ventures before being stripped of their savings.
The proceeds from these scams were subsequently laundered through shell companies, crypto wallets, gambling sites, real estate, and block rewards operations. Reports indicate that many victims faced threats, social isolation, and occasionally physical harm.
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Executive Order Establishes the Framework
The authority for the U.S. to retain this Bitcoin instead of liquidating it originates from an Executive Order enacted in early 2025, which formally created the Strategic Bitcoin Reserve. The decree mandates that any crypto assets forfeited due to criminal or civil proceedings be place in the new reserve instead of being sold or converted to cash.
While this appears to be a clear-cut process, there are still legal procedures to navigate. Courts must approve the forfeiture, and there exists a possibility that Chen Zhi or others related to the funds may contest the decision. Even if these obstacles are overcome, the government must figure out how to safely store and oversee more than $14 billion in BTC.
Various agencies are currently collaborating to manage this initiative, including the Department of Treasury, FinCEN, and OFAC, each contributing to monitoring, assessing, and protecting the assets.
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BTC as a Government Asset?
The choice to retain rather than liquidate could have significant implications. It implies that the government recognizes the potential of treating Bitcoin as a reserve asset, akin to gold. By removing these coins from the trading market, officials can help avert the intense selling pressure that often leads to price declines when substantial amounts are sold simultaneously.
If this strategy succeeds, it might prompt other nations to reconsider the automatic liquidation of confiscated cryptocurrencies. It could also spark broader debates about the role of digital assets in national reserves.
Still Much to Demonstrate
The outcome relies on how officials manage this situation. A successful implementation could reform the U.S. approach to high-value crypto seizures and influence other nations to follow suit. It could establish new standards for custody, regulation, and asset categorization.
However, it could also have adverse effects. If the legal process takes too long, if custody solutions falter, or if there are issues with internal management, public and trading market trust could diminish.
At the moment, those 127,271 BTC remain inactive. The forthcoming decisions could shape the trajectory of state-level cryptocurrency policies.
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Key Takeaways
- The U.S. government intends to retain 127,271 BTC, equivalent to roughly $14.2 billion, as part of a newly established Strategic Bitcoin Reserve instead of auctioning it off.
- These assets were confiscated from Chen Zhi’s illicit operation, which encompassed crypto fraud, human trafficking, and extensive money laundering.
- An Executive Order passed in early 2025 laid the groundwork for the Strategic Bitcoin Reserve, mandating that authorities maintain seized cryptocurrencies rather than selling them.
- Holding the BTC could enable the U.S. to consider it as a reserve asset, mitigate trading market sell pressure, and indicate a significant policy transformation at the government level.
- The eventual outcome will depend on how effectively the government addresses legal disputes, custody logistics, and inter-agency coordination in managing the $14 billion reserve.
The article U.S. Set to Lock In $14 Billion in BTC as Part of Strategic Reserve first appeared on 99Bitcoins.
