U.S. Bitcoin Reserves Surge to $36B Following Historic DOJ Seizure

Bitcoin News

The Department of Justice has filed a civil forfeiture complaint seeking 127,271 Bitcoin worth approximately $14.4 billion, potentially representing one of the most significant additions to U.S. cryptocurrency holdings since the strategic reserve's establishment. The action stems from charges against Chen Zhi, who allegedly orchestrated massive investment fraud operations.

The U.S. Attorney's Office for the Eastern District of New York and the Department's National Security Division announced Tuesday that the complaint represents the largest forfeiture action in DOJ history. Federal authorities charged the former Chinese national with operating a Cambodia-based crypto scam network utilizing forced labor to steal billions from victims.

Government Bitcoin reserves jumped past $36 billion at current prices following the record-breaking forfeiture. Before this seizure, U.S. holdings sat at approximately $22 billion across 197,354 coins, making the new confiscation a substantial expansion of federal cryptocurrency assets.

Prosecutors will seek forfeiture upon Zhi's conviction in federal court, where he faces wire fraud conspiracy and money laundering conspiracy charges. The indictment alleges the defendant, who renounced his Chinese citizenship, managed operations that lured victims into investment scams through sophisticated online schemes.

The Treasury Department's Office of Foreign Assets Control imposed sweeping sanctions on 146 targets within the Prince Group Transnational Criminal Organization. The coordinated action, conducted with the U.K.'s Foreign, Commonwealth, and Development Office, targeted networks responsible for scamming U.S. citizens and allied nations while laundering stolen funds.

Beyond investment fraud, authorities accuse Zhi of overseeing fraud involving blackmail of sexually explicit materials, often from minors. The indictment also alleges money laundering, various frauds and rackets, corruption, and illegal online gambling across the operation.

Zhi allegedly managed industrial-scale trafficking, torture, and extortion of enslaved workers forced to operate from at least 10 scam compounds in Cambodia. Treasury Secretary Scott Bessent stated that transnational fraud has cost Americans billions, with life savings wiped out in minutes.

President Trump established national Bitcoin and crypto reserves via executive order in March. Though the system has not been fully implemented, the strategic reserve is intended as the destination for any Bitcoin seized by the U.S. government, suggesting these billions in assets could ultimately flow there.

The Treasury Department has steadily circled Cambodian criminal enterprises, targeting individuals connected to vast arrays of illicit activities. Those crypto-funded operations have long been a focus of digital asset analytics firms, investigators, and congressional inquiries into international fraud schemes.