DOJ Seizes 127K Bitcoin, Pushing US Crypto Reserve to $36B
- US seizes 127,271 BTC, worth $14 billion, boosting national Bitcoin reserves to $36 billion.
- DOJ exposes Cambodia-based crypto fraud network using forced labor and global scam schemes.
- U.S. Bitcoin reserves rise to 325,000 BTC, bolstering its position among crypto holders.
The United States government’s Bitcoin holdings increased significantly as the Department of Justice (DOJ) seized 127,271 BTC. This seizure was made following a civil forfeiture complaint against Chen Zhi, the founder of the Prince Holding Group, which is based in Cambodia. Officials accuse Zhi of operating a network of cryptocurrency investment frauds connected to forced labor and fraudulent schemes.
According to the DOJ, the confiscated Bitcoin was stored in unhosted wallets, and the private keys have now been recovered. Officials estimate the seized assets are worth over $14 billion. These funds now fall under U.S. government custody, pending a final court ruling. If the court convicts Zhi, the assets will become part of the government’s strategic Bitcoin reserve.
The criminal complaint accuses Zhi of conspiracy to commit wire fraud and money laundering. According to the allegations by U.S. prosecutors, he operated numerous scam compounds in Cambodia where people were subjected to being involved in “pig butchering” scams. These scams include deceiving victims into false online relationships and then luring them into fraudulent cryptocurrency investments.
Federal Agencies Coordinate Global Sanctions and Actions
Several federal entities, including the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN), coordinated actions with the United Kingdom’s Foreign, Commonwealth & Development Office. Together, they imposed sanctions on 146 individuals and entities linked to the Prince Group Transnational Criminal Organization.
OFAC described the group as a significant international criminal network. The sanctions target key figures responsible for the theft of billions of dollars through digital asset fraud and money laundering activities. Treasury Secretary Scott Bessent stated that federal agencies continue to work with international partners to protect U.S. citizens from cyber-enabled financial threats.
The DOJ stated that the scale of the seizure represents the largest crypto forfeiture in its history. Officials emphasized their commitment to disrupting networks involved in human trafficking, financial crime, and online exploitation. The government also noted the recovery of forced labor victims from scam centers operated under Zhi’s control.
Related: DOJ Seizes $584,000 USDT Linked to Iran Drone Supplier
US Crypto Reserve Expands to Over 325,000 BTC
The latest Bitcoin seizure brings the total U.S. government crypto reserves to approximately 325,292 BTC, valued at over $36 billion based on current market prices. The reserve includes digital assets confiscated through civil and criminal enforcement actions, without any government purchases.
Earlier this year, former President Donald Trump signed an executive order establishing a national strategic crypto reserve. The policy requires that digital assets be obtained only through legal seizures. Officials clarified that the reserve is intended to enhance financial readiness and protect national interests in the evolving digital landscape.
Legislative discussions about the reserve’s future have included proposals to expand it by converting other assets, such as gold. Some lawmakers, including Senator Cynthia Lummis, have suggested reallocating a portion of the nation’s gold holdings into Bitcoin. However, these proposals still require additional legal and regulatory review.
The confiscated items linked to the ongoing investigation demonstrate how the federal government is evolving its strategy for managing digital assets and enforcing cybersecurity laws. Criminal investigators persist in seeking justice against those involved in crypto-related crimes, highlighting the need for transparency and international cooperation.
With Zhi still at large, law enforcement agencies continue their efforts to find and capture those connected to this case. If convicted, Zhi faces up to 40 years behind bars. The DOJ continues to pursue forfeiture proceedings as the case progresses through the Eastern District of New York.
