According to a new analysis, roughly 453,000 bitcoins have been seized by world governments authorities. This equates to 2.6% of the current circulating supply.
Released this week, the report also states that 85.6% of the confiscated bitcoins came from just two incidents: the shut down of online black market Silk Road by the FBI (174,000 bitcoins); and a cybercrime shutdown by the joint operation between SELEC (Southeast European Law Enforcement Center) and the Bulgarian government (213,519 bitcoins).
It is important to note that many of the seized bitcoins by the U.S. government have already been auctioned. The most recent took place in October of 2017, where the remaining 144,336 seized bitcoins from Silk Road (valued at just over $48.2 million) were sold, and earlier this month, when $4.3 million worth of bitcoin were auctioned online.
Nevertheless, the US government still holds some bitcoins. According to the estimates from the report, from a total of 198,000 seized bitcoins, the US government still owns between 4,100 to 10,000 BTC. The rest of them were sold at a total of $151 million – averaging $780 per bitcoin.
The origins of the bitcoins confiscated by SELEC and the Bulgarian government however are still unclear.
In December, Ivan Geshev, head of Bulgaria’s Special Prosecutor’s Office, publicly announced that “no bitcoins had been seized”. It is unclear what statement is actually true. Some speculate that authorities miscalculated the number of bitcoins seized, as it is actually a much smaller number.
One of Bitcoin’s most valued features is that it is arguably censorship resistant, as encrypting or memorizing private keys it becomes very difficult to impossible for anyone to access wallets. This may be what happened with SELEC, as the Bulgarian government might have seized the wallets but, since it has no access to the private keys, it is unable to access the content of the wallets.