US Marshals Service Bitcoin Holdings Far Lower Than Estimated, FOIA Request Reveals

A recent Freedom of Information Act request has shed new light on the United States government’s Bitcoin holdings, revealing that the U.S. Marshals Service possesses significantly fewer Bitcoins than previously estimated by industry analysts. According to a response from the Department of Justice, the agency holds just 28,988 Bitcoins, valued at approximately $3.4 billion based on current market prices. This figure, disclosed in March, stands in stark contrast to earlier estimates from firms like Arkham Intelligence, which suggested the U.S. government collectively holds around 198,012 Bitcoins, currently worth roughly $25 billion. The discrepancy has sparked debates about the true extent of federal cryptocurrency reserves and raised questions about potential off-chain transactions.

The FOIA request was filed by independent crypto journalist L0la L33tz, founder of The Rage, a cryptocurrency trade publication. L33tz submitted the request in March at the behest of Bitcoin Magazine Chair David Bailey, who offered a $10,000 reward to confirm the exact quantity of Bitcoin and other crypto assets held by the U.S. Marshals Service. The agency, responsible for managing and auctioning seized tokens from federal organizations like the Federal Bureau of Investigation and the Internal Revenue Service, provided its response on Wednesday. The revelation has prompted scrutiny of how the government handles its cryptocurrency assets and whether significant portions have been sold or transferred discreetly.

Strategic Bitcoin Reserve and Government Transfers

The lower-than-expected Bitcoin holdings have fueled concerns among crypto advocates, particularly in light of President Donald Trump’s executive order earlier this year. In March, Trump mandated an audit and that federal agencies transfer their Bitcoin holdings to the Treasury Department to establish a Strategic Bitcoin Reserve. The policy aimed to centralize and preserve the government’s cryptocurrency assets as a long-term investment. However, the reported figure of 28,988 Bitcoins has raised alarms, with some speculating that the government may have sold or transferred a substantial portion of its reserves.

Senator Cynthia Lummis, a vocal proponent of the Strategic Bitcoin Reserve, expressed dismay, stating that reports of the U.S. holding only 29,000 Bitcoins would represent a strategic misstep. She argued that such a reduction could hinder the nation’s position in the global cryptocurrency landscape. Yet, it remains uncertain whether the government has actually sold its Bitcoin or if the assets were moved through over-the-counter trades, which occur offchain and are facilitated by custodians like Coinbase Prime, the official custodian for the U.S. Marshals Service. These transactions, often used for large-volume trades, leave no visible footprint on the blockchain, complicating efforts to track government holdings.

Onchain analyst Sani, founder of Time Chain Index, noted that he has been monitoring addresses believed to be associated with U.S. government Bitcoin reserves. He observed no recent onchain activity, suggesting that the Bitcoins have not been sold. However, industry figures like David Bailey have pointed out that a custodian such as Coinbase could be facilitating offchain swaps between government entities, allowing assets to change hands without public record. This possibility has led to speculation that the government’s Bitcoin reserves may still be intact but held in a less transparent manner.

The lack of centralized public databases and the covert nature of seizure operations make it challenging to confirm the total cryptocurrency holdings across all federal agencies. While Arkham Intelligence’s estimate of $25 billion in government-held crypto assets remains a widely cited figure, the FOIA response indicates that the U.S. Marshals Service’s portion is far smaller than anticipated. This discrepancy highlights the complexity of tracking government-controlled cryptocurrencies and the need for greater transparency in how these assets are managed. As the Strategic Bitcoin Reserve continues to take shape, stakeholders in the crypto community are calling for clearer reporting to ensure the U.S. maintains a competitive edge in the global crypto race.