US government bitcoin holdings balloon to $36 billion following record-breaking DOJ seizure

U.S. bitcoin reserves jumped to over $36 billion at current prices following the record-breaking forfeiture of nearly 130,000 BTC.

The U.S. Attorney’s Office for the Eastern District of New York and the Department’s National Security Division said on Tuesday that it filed a civil forfeiture complaint against a former Chinese national accused of running a massive crypto scam network, which resulted in the seizure of billions of dollars in bitcoin.

“The complaint is the largest forfeiture action in the history of the Department of Justice,” according to a statement.

U.S. authorities also said on Tuesday they had charged former Chen Zhi, who renounced his Chinese citizenship, with orchestrating a Cambodia-based crypto scam network that has used forced labor to steal billions of dollars, according to a release published Tuesday.

“The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and Financial Crimes Enforcement Network (FinCEN), in close coordination with the United Kingdom’s Foreign, Commonwealth, and Development Office (FCDO), took complementary actions against criminal networks responsible for targeting citizens of the United States and other allied nations through online scams and the laundering of stolen funds,” the statement said. 

OFAC imposed sweeping sanctions on 146 targets within the group known as the Prince Group Transnational Criminal Organization, which is allegedly led by former Chinese national Chen Zhi, the statement also said.

In an indictment filed with the U.S. District Court for the Eastern District of New York, Zhi is being charged with both wire fraud and money laundering conspiracy. Prosecutors sought the forfeiture of the 127,271 BTC, according to a court filing.

Besides being accused of running a massive fraud network that lures victims into investment scams, Zhi has allegedly also overseen acts of “fraud involving the solicitation for eventual blackmail of sexually explicit materials, often from minors—money laundering, various frauds and rackets, corruption, illegal online gambling.”

Zhi is also accused of managing “industrial-scale trafficking, torture, and extortion of enslaved workers” that are forced to work in “at least ten scam compounds in Cambodia.”

“The rapid rise of transnational fraud has cost American citizens billions of dollars, with life savings wiped out in minutes,” Secretary of the Treasury Scott Bessent said in a statement.  “Treasury is taking action to protect Americans by cracking down on foreign scammers.  Working in close coordination with federal law enforcement and international partners like the United Kingdom, Treasury will continue to lead efforts to safeguard Americans from predatory criminals.”

Before the seizure of roughly $14 billion in bitcoin, the U.S. government’s BTC reserves sat at about $22 billion (197,354 BTC). In August, Bessent said the U.S. would not be buying bitcoin for its strategic reserve.

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