DOJ’s $14.4B Bitcoin Seizure Makes U.S. One of the World’s Biggest Crypto Holders.

U.S. Justice Department Seizes Record $14.4 Billion in Bitcoin Linked to Global Crypto Fraud Network

In one of the most significant cryptocurrency seizures in history, the U.S. Department of Justice (DOJ) has filed a civil forfeiture complaint to claim ownership of 127,271 Bitcoin, valued at approximately $14.4 billion. The move marks a historic milestone for the U.S. government’s digital asset holdings, positioning it as one of the largest single additions to its growing crypto reserves.

Federal authorities allege the Bitcoin originated from a massive transnational fraud operation led by Chen Zhi, a former Chinese national accused of orchestrating large-scale investment scams and human trafficking operations based in Cambodia.

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The Largest Bitcoin Forfeiture in DOJ History

The DOJ’s Eastern District of New York and the National Security Division announced on Tuesday that this action represents the largest forfeiture case in the Department’s history. According to court documents, the seized Bitcoin is tied to a web of fraudulent investment schemes, forced labor operations, and global money laundering networks coordinated under Zhi’s direction.

Federal prosecutors claim Zhi managed a Cambodia-based syndicate that lured victims through deceptive online investment platforms, commonly known as “pig butchering” scams—an emerging cybercrime that has rapidly expanded across Southeast Asia. Victims were enticed into fake crypto investment schemes, often losing life savings within days.

The complaint alleges that these schemes were conducted through shell companies and blockchain wallets designed to obscure transaction trails, channeling stolen assets through decentralized exchanges and privacy tools.

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Expansion of U.S. Bitcoin Reserves

Prior to this seizure, the U.S. government’s cryptocurrency holdings stood at around 197,354 Bitcoin, valued at $22 billion. The new forfeiture pushes total holdings past $36 billion, signaling a substantial expansion of federal digital assets under management.

This accumulation aligns with President Donald Trump’s March 2025 executive order, which established the National Strategic Bitcoin Reserve — an initiative intended to consolidate seized crypto assets under a centralized federal custodian for national economic and security purposes.

While the reserve’s infrastructure remains under development, Treasury officials suggest that the newly seized Bitcoin will likely be transferred into the reserve upon completion of the forfeiture process.

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Human Trafficking, Torture, and Crypto Crime

The DOJ indictment paints a chilling picture of Zhi’s operations, alleging he oversaw industrial-scale forced labor camps disguised as crypto investment centers in Cambodia. Thousands of workers—many reportedly trafficked from China, Vietnam, and the Philippines—were allegedly coerced into conducting online scams under threat of violence, torture, and starvation.

Authorities accuse Zhi and his associates of engaging in multiple forms of criminal activity, including blackmail, extortion, sexual exploitation, and illegal online gambling. Several victims reportedly died while attempting to escape the compounds.

“This case exposes the dark intersection between human trafficking and financial crime,” said Treasury Secretary Scott Bessent. “Transnational criminal groups are weaponizing digital assets to expand global fraud operations, stealing billions from innocent victims worldwide.”

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Sanctions and International Coordination

In a coordinated effort, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) imposed sanctions on 146 individuals and entities linked to Zhi’s organization, known as the Prince Group Transnational Criminal Organization. The move freezes all U.S.-based assets connected to the group and prohibits American entities from conducting business with any sanctioned targets.

The U.K.’s Foreign, Commonwealth, and Development Office (FCDO) also joined the crackdown, issuing parallel sanctions on the same entities. Officials from both countries described the action as a “landmark step” toward dismantling one of Southeast Asia’s most entrenched crypto-fueled crime networks.

According to Treasury intelligence, the group used a sophisticated chain of offshore accounts, shell companies, and stablecoin transactions to disguise the origins of funds. Blockchain analytics firms like Chainalysis and Elliptic assisted in tracing the flow of Bitcoin, uncovering ties to hundreds of wallets used for fraudulent investment operations and dark web activity.

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Broader Implications for the Crypto Industry

While this seizure adds to the government’s Bitcoin portfolio, it also reignites debate over how federal authorities should handle confiscated crypto assets. Some policymakers argue that the creation of a strategic Bitcoin reserve could enhance U.S. digital sovereignty and strengthen the dollar’s long-term competitiveness. Others warn that large-scale government ownership could distort market dynamics and raise privacy concerns.

Legal analysts note that the case could serve as a precedent for future crypto-related prosecutions, demonstrating the government’s growing sophistication in blockchain forensics and asset recovery.

“This case shows that no matter how complex or global a scheme may be, cryptocurrency is not beyond the reach of law enforcement,” said U.S. Attorney Breon Peace of the Eastern District of New York. “We are leveraging advanced analytics to trace illicit crypto transactions and hold perpetrators accountable.”

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Congressional and Policy Response

The massive seizure has already sparked renewed interest in Washington, where lawmakers have been pushing for clearer frameworks governing digital asset forfeitures. Senator Elizabeth Warren, a long-time crypto critic, called the case “a wake-up call” for stricter anti-money-laundering regulations in decentralized finance.

Conversely, pro-crypto legislators argue that the successful tracing and seizure of funds highlight the transparency advantages of blockchain compared to traditional banking systems.

“This is proof that blockchain works for law enforcement,” said Congressman Patrick McHenry, chair of the House Financial Services Committee. “Unlike offshore accounts, crypto transactions leave a digital footprint that makes tracing and recovery possible.”

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The Road Ahead

As the DOJ pursues criminal proceedings against Chen Zhi and his associates, legal experts predict a lengthy battle over asset recovery and distribution. The forfeited Bitcoin will remain under federal custody until the conclusion of the trial, after which it may be auctioned or transferred into the National Strategic Bitcoin Reserve.

If Zhi is convicted, the case will represent a defining moment in the intersection of blockchain technology, international crime, and global financial regulation. It underscores how digital assets, once viewed primarily as tools for innovation, have become central to global law enforcement and economic policy alike.

For now, the United States stands as one of the world’s largest government holders of Bitcoin — not by investment, but through the spoils of its most ambitious crypto crime enforcement actions to date.

Source: CMC

Writer @Ellena

Erlin is an experienced crypto writer who loves to explore the intersection of blockchain technology and financial markets. She regularly provides insights into the latest trends and innovations in the digital currency space.

 

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