The UK government is reportedly planning to sell off more than $7 billion worth of seized Bitcoin to plug the widening fiscal gap. The UK Treasury and Home Office are working with police to set up a formal system for managing and selling cryptocurrencies seized in criminal investigations.
The fund also has a reserve of at least 61,000 Bitcoins (about $1.7 billion, or around Rs 14,000 crore). These Bitcoins were seized in 2018 from a Chinese investment fraud ring connected to a massive Ponzi scheme run by Tianjin Lantian Gerui Electronic Technology. A woman named Jian Wen was convicted in 2024 for attempting to buy luxury property in the UK using funds in Bitcoin, which were linked to the scheme.
The assets were confiscated years ago, but their value exploded during the latest Bitcoin rally—going from around $300 million when seized to upwards of $7 billion now. This has piqued the interest of government officers after the requirement for public expenditure has risen.
Rachel Reeves, the Chancellor of the Exchequer, is reportedly considering a sale to relieve pressure on the budget without raising taxes or cutting services. However, the plan is already mired in controversy. Many Chinese investors are victims of the Ponzi scheme that involved Bitcoin. Along with Chinese authorities, these investors are demanding the return of the Bitcoin seized by the authorities. That seizure can delay or thwart any proposed sale of this involved Bitcoin. You can imagine what kind of value this coin has if the authorities start demanding its return.
Supporters of cryptocurrencies are claiming that Britain should keep hold of the Bitcoin and treat it as a long-run strategic asset. Jordan Walker, Bitcoin Collective founder, warned officials that selling these assets could jeopardize the UK’s chance of becoming a progressive crypto economy. According to him, it is short-sighted to sell now to plug a gap in the budget.
Complicating matters, the Crown Prosecution Service has asked the High Court to permit the state to keep the Bitcoin. If such a sale were to go ahead, the proceeds would first pay off victims and legal costs. After the relevant costs, the rest would be split between the police and the Treasury off the back of UK proceeds of crime legislation.
There’s also a logistical element. At the beginning of the year, the Home Office invited bids for a contract worth $53.7 million for a safe store…
Source
Earlier this year, the Home Office sought bids for a $53.7 million contract to establish a secure storage and liquidation framework for digital assets. However, the tender was cancelled for not getting suitable bids.
Despite these hurdles, officials are eager to move forward. The pressure is on, as the UK faces high inflation, sluggish growth, and an estimated £20 billion hole in the budget. As Reeves tries to steer the economy back on track, it may seem like a viable solution to tap crypto reserves.
Depending on what country it is sold in, any sale will have to deal with legal compliance issues and other monetary things. According to Susie Violet Ward, of Bitcoin Policy UK, the assets that were seized are still “legally contested,” and “no sale can progress until those disputes are resolved.”
Conclusion
Britain’s decision to sell billions in seized Bitcoin could be a costly decision for Britain, according to the UK’s Court of Appeal. The critics say that while the sale might help the ailment when the Sputnik V vaccine takes time to arrive, it will show the narrowness of thinking and invite international backlash. As digital assets become an ever more central part of global finance, how the UK approaches this moment could shape its crypto policy for many years to come.
