The UK is reportedly considering the liquidation of over 5 billion British pounds ($6.7 billion) in confiscated Bitcoin to aid in addressing a shortfall in the nation’s budget.
The Home Office and the head of the nation’s Treasury, Rachel Reeves, are collaborating with law enforcement to divest its collection of confiscated Bitcoin (BTC) and aim to establish a framework for storing the cryptocurrency to facilitate the disposal, The Telegraph reported on Saturday.
This sale could likely impact a recently rejuvenated Bitcoin and cryptocurrency surge.
Local law enforcement is responsible for cryptocurrency transactions in the UK, though the Treasury is said to have a role as the crypto market has surged, elevating the worth of the government’s assets.
The precise quantity of seized Bitcoin held by the country remains uncertain, but it includes no less than 61,000 Bitcoin, presently valued at approximately $7.1 billion, confiscated from a Chinese Ponzi operation in 2018 that was stored in the UK.
The concept of the UK liquidating its Bitcoin was suggested earlier this year, with The Daily Mail and The Times reporting in January that Reeves might liquidate the Bitcoin reserve to bridge the fiscal gap.
Cointelegraph reached out to HM Treasury for a statement.
Ponzi victims demand UK return Bitcoin
Nevertheless, the UK’s scheme to sell the Bitcoin could be stalled by the victims of a Chinese Ponzi scheme, who have been requesting the restitution of the Bitcoin since 2024.
“The UK’s Bitcoin remains legally disputed,” Susie Violet Ward, the CEO of the crypto advocacy group Bitcoin Policy UK, stated in a post on X on Sunday, criticizing the article as “sensationalism over substance.”
“Chinese authorities and victims are demanding its return. No sale can occur while that legal matter is unresolved,” she added.
The UK confiscated the Bitcoin in 2018 after hospitality worker Jian Wen tried to launder proceeds from an investment scheme operated by Tianjin Lantian Gerui Electronic Technology by attempting to purchase a mansion with BTC.
Wen was subsequently charged with three counts of money laundering, which she refuted, but was convicted in March of the previous year and imprisoned for six years and eight months in May 2024.
A group advocating for the Ponzi scheme’s victims requested China’s Foreign Affairs Ministry in April 2024 to engage with the UK to retrieve the Bitcoin.
UK wants to retain seized Bitcoin
In the meantime, the Crown Prosecution Service has requested the High Court to permit it to retain the Bitcoin confiscated from the scheme, which may result in the assets being sold and divided among law enforcement entities.
Freddie New, Bitcoin Policy UK’s head of policy, shared on X on Sunday that any liquidation of the cryptocurrency would occur under proceeds of crime regulations, which stipulate that assets will be sold “to fulfill confiscation orders” and provide restitution to victims if mandated by a court.
“We recognize that the victims here lost yuan, NOT Bitcoin. There’s an added complexity here in that we also understand there may be diplomatic initiatives underway to request the Bitcoin instead of the yuan which was initially lost,” he added.
New remarked that after expenses and victim compensations, the residual funds allocated to the Treasury might be distributed among “those entities involved in the asset recovery,” including the police.
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In May, the UK issued a tender for a 40 million British pound ($53.7 million) “crypto storage and realization framework” to enable police to store and manage confiscated cryptocurrency. This was terminated earlier this month after the government announced it had not received proposals that could meet the requirements.
UK again urged to accumulate Bitcoin
New stated that Bitcoin Policy UK wrote to the government in July 2024, urging it to modify the legislation “to provide themselves with more flexibility to retain this valuable asset,” which he acknowledged was overlooked.
Jordan Walker, the founder of the crypto advocacy organization Bitcoin Collective, penned an open letter to the government urging it not to divest the Bitcoin considering The Telegraph’s report.
“Disposing of these assets to address a temporary budget shortfall would convey a troubling message,” he asserted, adding it could have “long-term implications for the UK’s economic stability.”
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