UK Government Could Sell Confiscated £5B in Bitcoin to Offset Economic Challenges

Word is circulating that the UK government could use approximately £5 billion seized from organized criminal affairs to settle part of its £22 billion debt, exacerbated by economic challenges.

Recent reports confirm that several influential figures have urged Rachel Reeves, the chancellor of the exchequer, to sell the entire BTC stash to pay some of the nation’s deficits.

Bitcoin Stash to Settle Nation’s Debt

On-chain data from blockchain intelligence firm Arkham revealed that approximately 61,245 BTC (worth over £5 billion) is currently in the custody of the UK government. Most of these funds were derived from confiscated digital wallets owned by Jian Wen, an ex-takeaway employee for a Chinese fraudster. Wen reportedly helped her employer to launder £7 billion from a crypto-focused scam. She is currently serving a nearly seven-year jail sentence.

Notably, the UK authorities seized the BTC stash in 2021, two years before a bill was passed that allowed the government to confiscate ill-gotten cryptocurrencies.

Norman Lamont, who served as the chancellor of the exchequer in the early 90s, advised Reeves to spend the entire BTC holdings. He added:

“Otherwise it looks like the government is legitimising crypto, which has no intrinsic value. It would also help with the government’s finances.”

Other entities supporting the idea that the government sells its BTC holdings argue that the leading cryptocurrency is highly volatile and speculative. One called the action “a get-out-of-jail-free card” for Reeves.

Potential Impact on BTC’s Price

If the UK government sells the entire BTC stash, its action could mirror the German government, which sold all of its Bitcoin holdings within three months.

In 2013, the German authorities confiscated 50,000 BTC from a piracy website called Movie2k.to. In June 2024, Germany’s police agency, BKA, began offloading the entire portfolio, sparking a broader crypto market decline. The government would not have missed out on over £880 million in profit if it had held the digital asset until early November.

While selling all of the BTC holdings seems like an easy move for the UK government, it is worth noting that its sales action could also lower bitcoin’s price below its current level of about £82,200.