US Marshals miss Senator Lummis’ deadline to provide answers on their Bitcoin stash

The US Marshals Service missed the Friday deadline to give Senator Cynthia Lummis what she wanted—straight numbers on how much Bitcoin the agency controls and how it plans to manage it.

Her letter, sent over two weeks ago, laid out direct questions like, “How many Bitcoins does the agency have?” “What’s the plan for them?” and “Have previous Bitcoin sales been evaluated for effectiveness?”

But so far, it has been silence. The Marshals haven’t responded publicly, though a Bloomberg report claims they’re planning a private briefing for Cynthia and her team in the coming weeks.

There is a massive government stash of Bitcoins seized in criminal investigations at stake here—digital loot that’s auctioned off just like confiscated cars or houses. The Marshals handle it all, and as of September, the agency had $7.6 billion worth of seized assets in its custody.

Senator Cynthia Lummis grills US Marshals over seized Bitcoins 

Senator Lummis’ letter zoomed in on a specific treasure trove: 69,000 Bitcoins seized from Silk Road, the now-defunct dark web marketplace. It’s where people pay in Bitcoin for everything from drugs to fake IDs. Cynthia said:

“Of particular concern are current plans to sell an additional 69,370 Bitcoin, which appears to be proceeding despite President Donald Trump’s July 2024 announcement regarding the establishment of a National Bitcoin Stockpile which would entail keeping “100% of all the bitcoin the U.S. government currently holds or acquires.”

Ross Ulbricht, the guy behind Silk Road, got life in prison for drug trafficking, conspiracy, and running a criminal enterprise. But earlier this month, President Donald Trump dropped a bombshell—he pardoned Ulbricht for those charges.

The Bitcoin tied to Ulbricht didn’t get a pass though. The Justice Department is still holding those assets, and the Marshals Service has been auctioning them off in tranches since 2014.

Back when they seized the coins, the US said Silk Road had facilitated 9.5 million Bitcoin transactions and earned 900,000 Bitcoins in commissions. Investigators tracked down Ulbricht’s laptops and found a mountain of digital coins, which he agreed to forfeit during a separate court proceeding.

In 2017, the government auctioned off 140,000 of those Silk Road Bitcoins at a bargain price of $330 each. At today’s prices, those same coins are worth over $100,000 each.

Senator Lummis pointed out this massive price jump in her letter, saying the US lost out on nearly $19 billion by selling too early—a 98% difference. She’s pressing the Marshals to explain their decision-making.

Senator Lummis pointed out that the Marshals have stayed quiet on whether they evaluated the timing or effectiveness of their auctions. Silence will not be an effective strategy with Senator Lummis leading the investigation.

Trump’s Bitcoin reserve plan and Cynthia’s 1 million token target 

Trump’s administration recently announced plans to explore creating a “digital asset stockpile” to function like the nation’s gold reserves. One idea is to transfer Bitcoin held by the Marshals Service directly into this new reserve instead of auctioning it off.

Senator Lummis introduced legislation pushing the US Treasury to acquire 200,000 Bitcoins every year until the reserve hits 1 million tokens. That’s 5% of the entire global Bitcoin supply. She called it the BITCOIN Act.

In a statement released Wednesday, Senator Lummis said her Senate subcommittee would hold public hearings to discuss the proposal. “One of the first orders of business will be to hold public hearings on the Strategic Bitcoin Reserve,” she said.

Her team is wasting no time, with plans already underway to gather lawmakers, regulators, and industry leaders. Senator Lummis’ influence in Washington’s crypto circles is at its peak. After all, this is a woman who has consistently and fiercely advocated for Bitcoin and Americans’ financial freedom.

Tim Scott, chair of the Senate Banking Committee, appointed Lummis as head of the newly formed “Subcommittee on Digital Assets” just a week ago, and in his announcement, he described her as a “strong and focused leader” who deserves to be put in charge.

According to the Republican senator, the subcommittee will focus on two main goals over the next four years. First, they will be passing bipartisan laws to promote innovation and protect consumers, which includes regulating stablecoins, market structures, and building the national Bitcoin reserve.

Second, they’ll oversee federal regulators to make sure they don’t overstep their boundaries—especially when it comes to heavy-handed tactics like Operation Chokepoint 2.0, which is currently being investigated, as Cryptopolitan reported last week.

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