The UK government is preparing to offload billions of pounds worth of seized Bitcoin, as pressure mounts on Chancellor Rachel Reeves to plug a widening budget gap.
Key Takeaways:
- The UK government is planning to sell over £5 billion in seized Bitcoin to help ease fiscal pressures.
- A centralized framework is being developed to manage storage and sales, with the Treasury closely monitoring potential proceeds.
- Experts warn against a hasty sell-off, drawing parallels to the UK’s poorly timed gold sale in 1999.
Working alongside police forces, the Home Office is designing a centralized framework to store and sell confiscated digital assets, according to a report from The Telegraph.
The plan, dubbed the “crypto storage and realisation framework,” could enable the sale of more than £5 billion ($6.5 billion) in Bitcoin, most of it recovered from historic criminal investigations.
A single 2018 raid alone netted 61,000 BTC, now valued at over £5.4 billion, after prices hit $123,000 last week.
Treasury Monitors Crypto Seizures as Law Enforcement Leads Sales
While law enforcement handles the seizures and sales, the Treasury is reportedly keeping a close eye on the operation.
Any proceeds not returned to fraud victims are typically split between the central government and law enforcement programs.
Experts believe the Treasury could receive billions from the sales, providing a rare financial boost as Reeves faces the dual challenge of rising debt costs and weak economic growth.
“There is oil under our feet in terms of digital assets,” said Aidan Larkin, CEO of seizure specialist Asset Reality.
“I do think digital assets will lead to a large windfall for government agencies and the public purse over the next five to ten years.”
The Home Office had previously invited bids for the contract to manage the crypto sale system, with terms suggesting up to £40 million in commissions for the chosen provider.
While initial bids failed to meet requirements, the project is expected to continue in a revised form.
The 2018 seizure of Bitcoin tied to Chinese fraudster Jian Wen is now under review, with victims requesting restitution.
If the Treasury were to keep half of that haul, approximately £2.6 billion, it would go a long way toward easing fiscal pressures.
Former Chancellor Norman Lamont urged Reeves to “spend it right away,” but others warn against rushing.
UK’s Bitcoin Sell-Off Sparks Fears of “Another Gold Blunder”
Comparisons have already been drawn to Gordon Brown’s infamous 1999 gold sale, when the UK sold 401 tonnes of gold at rock-bottom prices, a decision that cost the country tens of billions.
Meanwhile, political voices have weighed in. Reform UK leader Nigel Farage has called for the UK to establish a Bitcoin reserve, mirroring a move announced by Donald Trump in the U.S. Labour, however, rejected the idea, citing Bitcoin’s volatility.
Despite the risks, the size of the potential windfall makes it difficult to ignore.
“With the delays in court hearings that we’re getting now, you have to seize it and then maintain it for a long time,” said Cardiff University professor Michael Levi, an expert in criminal asset seizures.
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