UK's 61,000 Seized Bitcoins Spark Industry Debate on Strategic Reserve
The UK's 61,000 seized Bitcoins (BTC) have sparked debate within the crypto industry. Some British players suggest using these assets to create a strategic reserve, while others argue for their return or disposal. The UK government, however, is currently focused on keeping most of these coins.
The UK's approach to criminal assets, guided by the Proceeds of Crime Act (POCA), prioritises the recovery of criminal proceeds rather than long-term investment. The government is thus seeking to retain most of the 61,000 BTC seized in 2018.
However, some in the industry advocate for a strategic role of Bitcoin in the UK's future reserve policy. The British Blockchain Association, for instance, supports a measured approach. They believe studying the feasibility of Bitcoin and crypto reserves through research and pilots could be beneficial.
The Bank of England itself proposed exploring Bitcoin's potential role in the bank's future reserves back in 2019. Yet, the UK's official reserves policy currently does not contemplate adding Bitcoin, and there are no plans to change this.
Meanwhile, civil recovery proceedings are underway to determine how much of the seized BTC should be returned to victims of a large-scale Chinese investment fraud. Some industry representatives suggest a phased and transparent disposal of the seized BTC to reduce market impact.
The UK government is facing a significant budget gap, estimated at up to $67 billion. While some argue that long-term holding of seized assets is at odds with UK law, the government is currently not considering adding Bitcoin to its reserves. The future of the seized BTC remains uncertain, pending the outcome of civil recovery proceedings.
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