Overnight, a document obtained by independent journalist L0la L33tz through a Freedom of Information Act (FOIA) request and responded to on July 16 dropped a bombshell in the crypto community.

The FOIA request was submitted on March 24. In the document, the US Marshals Service under the US Department of Justice reported that the number of bitcoins it holds is 28,988.35643016, which is worth about US$3.44 billion at current market prices.

This figure is nearly 90% less than the previously disclosed 200,000 (for example, on-chain analysis agency Arkham Intelligence estimates that the total value of cryptocurrency assets held by the US government is close to US$25 billion), which immediately triggered market speculation as to whether the US government has quietly sold most of its holdings.

L0la L33tz emphasized that the list she received from the US Marshals Service was a list of all Bitcoins "held by the US Marshals Service." This means that other seized assets, other than the US Marshals Service, may still be held by the agency responsible for the seizure, rather than being stored uniformly in the Marshals Service. Therefore, the data from the Marshals Service does not represent the "entire stock" of Bitcoin in the US government.

The key to understanding this data is to distinguish between “forfeited assets” and “seized assets.”

• Confiscated assets: refers to assets whose ownership has been legally transferred to the government through legal procedures. The U.S. Marshals Service, as the law enforcement agency of the federal courts, is usually responsible for managing and auctioning these confiscated tokens seized by organizations including the FBI and IRS.
• Seized assets: These are assets that have been temporarily seized by law enforcement agencies during an investigation. These assets may not have been subject to a final legal judgment, their ownership is not fully vested in the government, and therefore cannot be sold.

This explanation clarifies market confusion regarding government-related wallet addresses listed by certain on-chain trackers such as Arkham, BTC Treasuries, etc.

Some public tracking tools often show data on Bitcoin that has been "seized" but has not yet been legally confiscated by the government. For example, Arkham tracked 94,000 Bitcoins from the Bitfinex hack, but the confiscation process for these assets has not yet been finalized. This means that even if these Bitcoins are currently under the control of the government, they may be "unsaleable" because the legal process has not been completed.

On-chain footprint "invalid"? The latest speculation about the custodian's offline transactions

However, the discussion about whether the US government has "dumped" Bitcoin has not completely subsided, but has become more complicated due to new clues.

David Bailey, an early Bitcoin advocate, CEO of Bitcoin Magazine and founder of Nakamoto, suggested that in this case, "it is meaningless to track only the on-chain footprint because it (the transaction) is conducted through a custodian."

Crypto analyst Sani (@SaniExp) explored this in depth.

Sani said that he and many other industry insiders have been tracking on-chain addresses believed to be associated with the U.S. government's holdings, and indeed have not found any recent large-scale on-chain transfers, which originally supported the assumption that "no sales". However, Sani cited multiple sources as saying that custodians may be facilitating "off-chain swaps" on behalf of certain entities. This operation allows the transfer of ownership of currencies without generating on-chain transaction records. Sani speculated that if such large-scale offline transactions exist, the only custodian that can handle such a volume may be Coinbase.

Sani’s point is that in this case, the effectiveness of on-chain tracking becomes “not conclusive,” and he does not assert that on-chain tracking is completely ineffective.

In this regard, David Bailey himself speculated that "although there are more detailed differences, the broad conclusion is that the U.S. Marshals Service has been selling (Bitcoin) and leaving no footprint on the chain." He emphasized that this is a "major development."

Forcing Trump to repurchase in large quantities for "strategic reserves"?

The disclosure of this figure is particularly sensitive in the current context. US President Donald Trump has previously made it clear that the US government will retain its Bitcoin holdings as part of the "Strategic Bitcoin Reserve" (SBR).

In March, he signed an executive order requiring federal agencies to transfer their crypto assets to the Treasury Department, which will oversee the reserve. Trump's crypto "czar" David Sachs has also proposed a "budget neutrality" strategy aimed at obtaining more Bitcoin for government funds. At the same time, the March 6 executive order also established a "U.S. Digital Asset Reserve" to store digital assets other than Bitcoin that have been confiscated in criminal or civil proceedings.

U.S. Senator Cynthia Lummis, a major supporter of the strategic Bitcoin reserve, said on the X platform: "I am shocked by reports that the United States has sold more than 80% of its Bitcoin reserves - only about 29,000 are left. If this is true, it will be a complete strategic mistake and set the United States back many years in the Bitcoin race."

David Bailey believes that the sharp reduction in the US government's Bitcoin holdings may explain the long-term stagnation of prices in the past, and regards it as a "bullish" signal. His latest tweet also mentioned that when "it was discovered that the United States might need to buy back hundreds of thousands of Bitcoins to replenish the SBR", the issue of whether Federal Reserve Chairman Powell would stay or go also surfaced, which he saw as a "manifest destiny."

In short, whether or not these 28,000 BTC represent all of the U.S. government’s holdings, they have injected key variables into the market. If the previous market correction/stagnation was indeed caused by the U.S. government’s OTC selling, then when the “rookie chips” complete the transfer to the “diamond hands,” Bitcoin’s rise may have a more solid foundation.

What is even more interesting is the strategic implications: when the United States transforms from the potential largest seller to the possible buyer of short positions, the liquidity reconstruction brought about by this role change may have a more far-reaching impact than a simple data dispute.