Considered to be the sideshow of the financial world once, Bitcoin’s reputation has drastically changed in the last few years. Since its creation, Bitcoin’s value had the tendency to increase, but it was perhaps its sudden increase to $20,089 in December 2017 that shook the world. Large investments soon followed, but not all investments were made by private individuals and/or companies.
In fact, some governments decided to buy Bitcoins, while others seized sizable amounts of the digital currency after raiding criminal organizations with large holdings. This article will discuss three countries, on three different continents, with various amounts of Bitcoins in their possession, along with Bitcoin usage and legality in these countries.
Here is a list of the countries appearing in the article and their current or past Bitcoin assets: NB: The dollar amount reflects the current exchange rate of BTC to USD, not the one at the time of possession.
- The United States – 70,000 BTC ($2 203 992 000) (speculation)
- North Korea – No data
- Bulgaria – 213,519 BTC ($6 782 132 108) (as per 2017)
The United States
The U.S. government was rather proactive in its attitude towards Bitcoin. Bitcoin was recognized as a convertible decentralized digital currency by the U.S. Treasury in 2013. Then, in 2015 the United States categorized Bitcoin as a commodity, while the IRS taxes Bitcoin as property.
Currently, it’s unclear exactly how many Bitcoins the American government owns, with some speculating that the number is around 70,000 BTC ($2 203 992 000). The current amount is impossible to estimate as different governmental agencies have seized Bitcoins over the years, and the way in which they report their forfeitures complicates the classification process.
There are a few famous cases of seizures, however, which have made headlines. In 2014, the US Marines auctioned off 29,656 BTC to venture capitalist Tim Draper for $18.5 million after seizing them from the black-market website SilkRoad. Apparently, Bitcoin mining is also popular with US Marines as the government had to ban Marines from mining on government devices in 2020. Another big seizure, again from SilkRoad, occurred in November 2020 with the government seizing $1 billion worth of Bitcoin. Lastly, on 8 June 2021 US investigators recovered $2.3 million in Bitcoin they seized from the hacking group DarkSide, which was responsible for shutting down the Colonial Pipeline. This money was paid in ransom by Colonial Pipe Co.to DarkSide, while its recovery is the first of its kind undertaken by the recently created DOJ digital extortion task force. This last event shows how governments are gradually adjusting to cryptocurrencies and crimes associated with them.
North Korea
This addition to the article might surprise you, but North Korea had lately become infamously connected to Bitcoin. Three North Korean hackers, believed to be part of a North Korean military intelligence agency, have been indicted on charges of theft and extortion amounting to $1.3 billion in cash and digital currencies. The US Department of Justice connects the hackers to other cybercrimes associated with cryptocurrencies like the creation of the blockchain platform Marine Chain Token, which the Department believes was used by North Korea to ‘secretly obtain funds from investors, control interests in marine shipping vessels, and evade U.S. sanctions.’ The hackers are also accused of stealing millions of dollars from cryptocurrency companies.
Another hacking scandal occurred in December 2017. South Korean crypto-exchange website was forced to close after 17% of its assets were stolen. The South Korean government has explicitly blamed North Korea for the cyber-attack.
In addition to these two scandals, North Korea is lately said to be influencing the Bitcoin market. Some analysts claim the massive surge of 2017 was caused by increased activity in Asia, some of which might be in North Korea.
Considering how isolated North Korea is from the global market, it makes sense for the country to trade with Bitcoin in order to facilitate its economy. Since Bitcoins are not regulated by an international financial body, the digital currency can easily be purchased by anyone, thus North Korea can evade sanctions. Still, the Bitcoin system was meant to be transparent, so anyone could trace holdings, but dividing the assets can make the process of tracing harder.
Bulgaria
The legality of Bitcoin in Bulgaria is regulated in the same way as in other European Union countries. Bitcoin is completely legal, and it’s classified as currency, thus conversion between BTC and fiat (traditional) currency is exempt from taxes. Buying goods and paying for services with Bitcoin, however, is taxed. Bulgaria even has two ATM machines, which convert cash into Bitcoin/Ether/Litecoin.
The reason why Bulgaria is on this list is because at one point, it was the second-largest holder of Bitcoin, only after Bitcoin’s mysterious creator Satoshi Nakamoto disappeared in 2011. The Bulgarian government seized 213,519 BTC in 2017 from a criminal enterprise group, which is accused of hacking government computers. Apparently, the hackers recruited customs officers in Bulgaria, Macedonia, Greece, Romania, and Serbia who, in return, would infect government devices with malware, which tricks the system that incoming shipments between the countries have been inspected. The supposed damages amount to 10 million BGN ($6.22 million).
23 suspects were arrested in connection to the crime, with their Bitcoin wallets seized in the process. However, the press release citing the number 200,000 BTC was made by the Southeast European Law Enforcement Center, not by Bulgarian authorities. There have been conflicting reports about the supposed seizure and its consequent fate. Some reports claim the seizure never occurred, while others claim the government has been gradually selling the Bitcoins as to not disturb the market, and some even think the government is still in possession of the Bitcoins. Whatever the truth is, the 213,519 BTC have been making headlines in Bulgaria and abroad for the past four years.
