You’ll have seen a lot in the press this weekend on the government’s plans to sell its confiscated Bitcoin. This thread is to set out what we actually know about the likely process, and what’s likely to happen absent a change in law. TLDR: Any sale will happen largely because these coins were confiscated as the proceeds of crime, and the Proceeds of Crime Act 2002 (POCA) sets out a clear and prescriptive process for what should happen. We have suggested to the Government that, given the vast sums involved and the strategic importance of Bitcoin, they amend POCA to give themselves more discretion to retain this valuable asset. They have ignored us. Lastly, it’s worth saying that I am personally lukewarm on the idea of governments holding Bitcoin. At @bitcoinpolicyuk , our policy position is that nevertheless, if governments do find themselves holding Bitcoin, they must learn about it and safeguard it in the best interests of their citizens. Labour have so far failed to do either. DETAIL (links to all of these in the thread): The story so far We originally wrote to the Chancellor in July 2024, urging her to consider an allocation of our confiscated Bitcoin to a strategic reserve. Treasury’s predictable reply is below (image and in thread). We have had ongoing correspondence with the City Minister @EmmaforWycombe on this matter, but she has refused to consider a change to POCA that would enable the government to retain this Bitcoin on behalf of the Nation. See the second image below and the post in the thread. Where did the Bitcoin come from, and how does this complicate matters? The FT article in the thread is an excellent description of the background as to how these coins were confiscated, and the status of the ongoing criminal and confiscation process. What’s the government’s official line? Honestly, the government has been pretty disingenuous on this, trying to pretend (in response to questions in the House of Lords, no less) that they don’t hold any Bitcoin. Relevant post also in the thread below. What does the Proceeds of Crime Act say should happen and why is this important? Basically, POCA sets out a fairly rigid process for dealing with the proceeds of crime. The distinguishing factor here is that the sums involved are VAST (eg 2x the entire annual budget of the Met Police). We have advised the City Minister that given the huge sums involved, and the unique nature of this asset, this was definitely grounds for an amendment to POCA under a Statutory Instrument in order to give the Secretary of State greater flexibility to retain the assets for the benefit of the nation. She has of course ignored and belittled this suggestion – see the second image below and the relevant post in the thread. The following provisions of POCA therefore apply: Assets will be sold to satisfy confiscation orders. Next up is victim compensation: funds from confiscation orders prioritize this when ordered by the court. IMPORTANTLY – we understand that the victims here lost yuan, NOT Bitcoin. There’s an extra wrinkle here in that we also understand there may be diplomatic efforts underway to ask for the Bitcoin rather than the yuan which was originally lost…. Finally, after victim compensation and costs, any remaining funds go to HM Treasury via ARIS (the Asset Recovery Incentivisation Scheme). ARIS may also distribute funds to those bodies involved in the asset recovery, eg police, the SFO, HMRC, etc. We’ll keep fighting to educate the government in this incredible opportunity, but we also need YOUR help. Write to your MPs; get involved; let them know how important this is. Then again, there’s no better way for them to learn that they shouldn’t sell their Bitcoin than by selling it, and experiencing the sting of eternal regret.