When 127,000 bitcoins were transferred from a Cambodian scam group's vault to the U.S. government's digital wallet, it was not only a victory for law enforcement but also a quiet shift in global financial power.
“The U.S. is building the world's largest strategic reserve of bitcoin, not through purchases, but through law enforcement.” In October 2025, as the U.S. Department of Justice completed the asset seizure in the Cambodian Prince Group case, this news sent shockwaves through the crypto world.
The seized 127,271 bitcoins, combined with approximately 197,000 previously held, brought the U.S. government's total bitcoin holdings to about 325,000, valued at over $37 billion, a figure that even surpasses the gold reserves of most countries.
01 National Strategy: From Temporary Liquidation to Long-term Reserve
U.S. Treasury Secretary Scott Bencet officially confirmed that the U.S. government has become one of the largest holders of bitcoin in the world. This statement marks a historic shift in the U.S. attitude towards cryptocurrencies.
Formation of Strategic Reserves
● President Trump issued an executive order in March 2025 to establish a strategic bitcoin reserve, significantly changing the government's method of storing seized cryptocurrencies in federal actions. It consolidated the previously decentralized storage across multiple agencies into a central reserve system.
● The U.S. bitcoin portfolio was entirely built through law enforcement seizures and asset forfeitures, rather than direct acquisitions. As of March 2025, the government held approximately 207,000 bitcoins, valued at about $17 billion.
Policy Turning Point
The policy change stemmed from the realization that prematurely selling bitcoins had cost U.S. taxpayers billions in unrealized gains.
● Bencet made it clear that the government will no longer sell its existing bitcoin holdings, nor will it use taxpayer funds to purchase more bitcoins.
● The Treasury committed to exploring a “budget-neutral path” to increase bitcoin holdings, indicating that new financing mechanisms may be introduced in the future that would not directly impact federal spending.
02 Massive Seizure: Key Details of the Prince Group Case
In October 2025, the U.S. Department of Justice filed criminal charges against the Cambodian Prince Group and its founder Chen Zhi, seizing 127,271 bitcoins, valued at up to $16 billion at current market prices.
Criminal Network Structure
● The Prince Group, led by Chen Zhi, was involved in investment scams, forced labor, and money laundering, with amounts exceeding $16 billion.
● The U.S. Treasury's Office of Foreign Assets Control imposed sanctions on the group and its 146 targets, including affiliated companies and key executives.
● Chen Zhi and his gang built and operated at least ten parks in Cambodia specifically for scams, where laborers were imprisoned under false job promises.
Bitcoin and Criminal Activities
● The approximately 127,000 bitcoins were the proceeds and tools of crime from the Prince Group's scams and money laundering, previously stored in an unmanaged cryptocurrency wallet, with the private keys held by Chen Zhi. The U.S. Department of Justice filed a civil forfeiture lawsuit, and these bitcoins are now held by the U.S. government.
● Blockchain data analysis indicates that these bitcoins may be linked to funds stolen from the Chinese cryptocurrency mining company "Lubian" in 2020.
03 Market Impact: From Sell-off Pressure to Structural Change
The U.S. announcement to retain rather than sell its bitcoin holdings quickly alleviated significant sell-off pressure in the cryptocurrency market. This action effectively eliminated over $17 billion in potential selling pressure.
Market Price Trends
After Bencet stated that the U.S. government would not make new acquisitions, the price of bitcoin initially fell, but as traders digested the commitment to maintain existing holdings, the price quickly stabilized.
As of mid-October 2025, the cryptocurrency market showed the following trends:
Cryptocurrency
Price (USD)
24-hour Change
BTC
113,028
-2.00%
ETH
43,985.61
-3.39%
BNB
1,162.02
-3.7%
SOL
193.84
-4.25%
XRP
2.51
-3.69%
Data Source: AiCoin
Market Structure Changes
● The U.S. government currently controls over 197,000 bitcoins, valued at approximately $17.3 billion, effectively eliminating over $17 billion in sell-off pressure.
● The trading volume on decentralized perpetual contract exchanges surged, driven by multiple factors such as regulatory scrutiny and zero-fee trading.
04 Regulatory Framework: From Loose to Systematic
The actions of the U.S. government are accompanied by a developing regulatory framework that provides clearer direction for digital assets.
National-Level Regulatory Progress
● New York City Mayor Eric Adams signed an executive order to establish the nation’s first “Office of Digital Assets and Blockchain,” aimed at coordinating cooperation between the crypto industry and the government.
● The Governor of California signed new legislation to protect unclaimed crypto assets, prohibiting forced liquidation of unclaimed cryptocurrency assets.
● U.S. Republican Congressman introduced the “Retirement Investment Options Act,” aimed at legislating President Trump’s executive order allowing 401(k) retirement plans to invest in cryptocurrencies.
Law Enforcement and Judicial Innovation
● The U.S. jurisdiction over the Prince Group case is based on the principle of “long-arm jurisdiction,” allowing U.S. courts to exercise jurisdiction over foreign actions with “minimum contacts” to the U.S.
● The successful resolution of the Prince Group case was largely due to advancements in blockchain analysis technology. U.S. law enforcement utilized advanced on-chain analysis tools to track the flow of funds on the blockchain, ultimately identifying the wallets involved.
05 Global Impact: The Domino Effect of Strategic Reserves
The U.S. bitcoin strategic reserve policy is generating widespread international effects.
● Treasury Secretary Bencet revealed the U.S. bitcoin holdings of $17 billion, marking a significant turning point in government cryptocurrency policy.
● By agreeing to retain seized digital assets rather than liquidating them, the U.S. effectively acknowledged the long-term value of bitcoin.
● Bencet confirmed that multiple governments have expressed plans to investigate similar reserves, recognizing that digital assets may become an increasingly critical component of national finances in the 21st century.
● The UK also announced sanctions against the Prince Group and related entities, freezing London business assets and properties allegedly linked to Chen Zhi.
● Japan will introduce new regulations to prohibit insider trading in cryptocurrencies, indicating that global regulators are strengthening oversight of the crypto market.
06 Future Outlook: An Era of Sovereign Digital Currency Reserves
● Senator Cynthia Lummis stated that the U.S. seizure of approximately 127,000 bitcoins from the Prince Group highlights two urgent tasks for Congress:
First, to pass digital asset market structure legislation as soon as possible, enabling law enforcement to combat illegal activities while protecting innovation;
Second, to clarify the storage, return, and intergenerational protection plans for seized bitcoins, transforming criminal proceeds into national assets that enhance the U.S. strategic bitcoin reserve.
● The U.S. government's bitcoin reserve policy may just be the beginning. The Treasury has committed to exploring a “budget-neutral path” to purchase more bitcoins.
● This suggests that future policy iterations may introduce new financing mechanisms that do not directly impact federal spending, providing more flexibility for the U.S. digital asset strategy.
The U.S. government's bitcoin strategic reserve has reached approximately 325,000 bitcoins, valued at over $37 billion.
These bitcoins, once scattered across dark web trading platforms, ransomware operations, and scam groups, are now integrated into a national strategic reserve.
“Transforming criminal proceeds into assets that enhance the U.S. strategic bitcoin reserve demonstrates how good policy can turn misconduct into lasting national value.”
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