Before Trump assumed office, the cryptocurrencies seized by the government were routinely sold under court orders. An agreement had even been made between the U.S. Department of Justice and Coinbase, whereby the government had already started systematizing sales through Coinbase Prime. However, with Trump’s administration came a shift in strategy, and the reserves began to expand rapidly.
127,271 BTC Seized
A significant portion of the scammers on social media related to cryptocurrencies are part of a larger operation. These organized fraudsters are part of a conglomerate that is much bigger than initially anticipated. The recent case involving Chen Zhi, the chairman of Cambodia’s Prince Holding Group, exemplifies this vast organization.
Galaxy Research turned its attention to the 127,271 BTC, valued at $15 billion, seized by the DOJ this week. Chen Zhi was luring people with job offers, only to force them into labor at a fraud camp in Cambodia.
How was the fraud revenue laundered? Companies like Warp Data, based in Laos with a subsidiary in Texas, and LuBian, a China-based mining firm, played crucial roles. In 2020, LuBian suffered one of the largest private key leaks in history. The software glitch known as “Milk Sad” resulted in the theft of 127,000 BTC. Despite not officially acknowledging the incident, LuBian’s on-chain message to “return the stolen assets” confirmed the breach.
According to the indictment, Chen personally maintained records of wallet addresses and seed phrases, and the assets seized today were described as loot from internal fraud. Prince Group and LuBian weren’t separate entities but rather branches of the same organization, meaning the captured assets were proceeds of crime.
U.S. Bitcoin Reserve
In March, a new initiative under Trump’s leadership was introduced. The U.S. Treasury was granted authority to hold seized cryptocurrencies under the Strategic Bitcoin 
$77,184 Reserve umbrella. Consequently, U.S. reserves increased overnight by 64%, surpassing 3.5% of the U.S. gold stock. In other words, the U.S. government became the world’s second-largest Bitcoin holder, just after MicroStrategy.
Empowered by the March 6 executive order, the government chose not to sell BTC, opting instead to retain it in reserves. This policy is expected to continue until Trump’s term concludes in 2028.
