UK Mulls Sale of Seized $7 Billion in Bitcoin to Tackle Budget Deficit

The UK government is considering offloading a massive trove of seized Bitcoin—currently valued at over US$7 billion (approx. AU$10.5 billion)—to help plug a widening hole in the national budget. The cryptocurrency stash, totalling 61,000 BTC, was confiscated in 2018 from a high-profile Chinese investment fraud case that spanned multiple countries.

According to British officials, the potential sale is part of a broader strategy to manage the country’s growing fiscal deficit, which currently stands at around £20 billion. Chancellor of the Exchequer Rachel Reeves is reportedly exploring all options to fund essential social welfare programs and ease the pressure of rising living costs amid a sluggish economy.

But selling seized digital assets is anything but straightforward.

Legal and technical hurdles remain, especially around the complex process of identifying and compensating victims of the original fraud. In many cases, victims are located across multiple jurisdictions, are difficult to trace, or may have unknowingly participated in the scam themselves.

"Typically, confiscated assets should be returned to the victims," said one government official familiar with the case. "However, it becomes much more complicated when victims are overseas, anonymous, or potentially complicit in the fraud scheme."

Another layer of complexity involves maintaining market stability. A sale of this magnitude could send shockwaves through the cryptocurrency markets if not handled carefully. To avoid flooding the market, the government is said to be considering a phased or institutional sale through private channels.

In response to the situation, the UK Treasury is also drafting new legal frameworks specifically designed to manage, store, and sell seized digital assets in a transparent and efficient manner. The proposed regulations would streamline inter-agency cooperation, set clear guidelines for asset liquidation, and ensure fair restitution processes for verified victims.

This would not be the UK’s first experience with seized crypto. Over the past few years, British authorities have handled multiple cases involving illicit digital funds, but never on this scale.

As of now, no formal timeline has been set for the Bitcoin sale, but sources close to the matter say discussions are advancing quickly behind closed doors.

With the stakes high and pressure mounting, all eyes are on how the UK will navigate this unprecedented intersection of digital finance, justice, and public policy.

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