GuShiio.com If you only hoard but not buy, you have to pay back the other half to Bitfinex?
Author:0xFacai、Ashley
This morning, the long-awaited executive order for the Bitcoin strategic reserve finally arrived. At about 8 a.m. on March 7, David Sacks, White House Director of AI and Cryptocurrency, posted on social media that President Trump signed an executive order to establish a strategic bitcoin reserve a few minutes ago. However, after this huge good news came out, the price of Bitcoin plunged immediately, falling from around $90,000 to below $85,000 within an hour. As of the time of writing, Bitcoin prices have rebounded to around $88,000.
It is worth noting that the reserve of this strategic reserve will be capitalized with Bitcoin owned by the federal government, which is the Bitcoin confiscated by the U.S. government in criminal or civil asset forfeiture proceedings. The U.S. government will not sell any Bitcoin deposited in the reserve, but there is a high probability that it will not buy more Bitcoin further,”which means it will not cost taxpayers a penny,” David Sacks wrote in a tweet.
Hoarding but not buying triggers Sell The News
In January this year, Trump signed an executive order instructing his government to evaluate “the possibility of building and maintaining a national digital asset reserve” and formed a working group to study feasibility, chaired by David Sacks. 10x Research analyst Marcus pointed out in his report on strategic reserves that there is a key difference between “reserving” and “creating and maintaining a national digital asset reserve.”
The word “reserve” suggests a proactive strategy to acquire more assets, while “build and maintain” suggests a more passive approach, the strategy of “hoarding but not buying”. Marcus mentioned in the report that although the executive order targets a wider range of digital assets rather than cryptocurrency, it also means that the U.S. government prefers to continue to hold existing cryptocurrencies rather than buy more cryptocurrency.
On the other hand, Trump’s Bitcoin Strategic Reserve Executive Order is far from being approved by Congress, and it is still several times before it is formally adopted and takes effect, which further stimulates traders ‘sentiment and motivation to Sell The News.
The U.S. government’s handling of currency, reserves and financial assets is subject to the jurisdiction of the law and agencies such as the Treasury Department and the Federal Reserve. Unlike coins or coins, coins are not a physical asset that the government can store in the traditional sense. They are a digital currency that is de-centered. Therefore, reserves mean that the government needs to store coins through a series of safe and reliable formal processes. Depositing coins will further raise issues related to assets, security and other aspects.
However, many practitioners close to this pro-crypto government have also expressed positive views on the executive order.
David Sacks, White House director of AI and cryptocurrency, said in a post on social media,”The premature sale of Bitcoin by the U.S. government has cost U.S. taxpayers more than $17 billion. Now, the federal government will develop a strategy to maximize the value of the bitcoins it holds.” Conor Grogan, director of Coinbase, posted on social media,”According to my estimation, the U.S. government holds 198,109 bitcoins. The executive order would reduce selling pressure by approximately $18 billion.
It is also worth noting that in addition to the federal government’s efforts on Bitcoin strategic reserves, many states in the United States have also responded positively in this regard. So far, 18 states in the United States have considered or proposed to establish state-level strategic Bitcoin reserves. On February 27, the Texas Commerce and Commerce Commission took the lead in reviewing and passing the Bitcoin Reserve Bill and submitting it to the Senate for consideration.
The bill aims to establish state-controlled bitcoin reserves to strengthen financial security and promote digital asset innovation. Its main contents include: authorizing the Texas government to hold bitcoin as a financial asset, managed by the Texas Auditor General’s Office, implementing cold storage plans and conducting regular audits, prohibiting the acquisition of bitcoin from foreign entities or individuals involved in illegal activities, etc. If passed by a two-thirds majority of the Senate, the bill will take effect immediately, otherwise it will take effect on September 1, 2025.
On March 7, the U.S. Senate of Texas passed the Strategic Bitcoin Reserve Act SB-21 with 25 votes in favor and 5 against. After that, SB-21 needs to be submitted to the Texas House of Representatives, where the bill will be assigned to relevant committees for review, revision, and hearings.
If the House makes changes to SB21, the Senate must agree to those changes, otherwise the two sides need to coordinate a final version through a conference committee. The final version agreed by both parties will need to be voted through separately. After passing the House and Senate, the bill will be sent to the governor of Texas for signature. The governor has the option to sign the bill into law.
Soul asks: Should the bitcoins confiscated in the Bitfinex case be returned?
Currently, the U.S. government holds approximately 200,000 Gotcoins, worth approximately US$18 billion at current prices. These bitcoins were seized through various law enforcement operations, the two main sources of which were the coins confiscated in the Silk Road case and the coins seized in the 2016 Bitfinex platform hacker case.
In February 2022, the U.S. Department of Justice (DOJ) seized more than 90,000 bitcoins from the Bitfinex hacking case. The hackers involved in the case Ilya Lichtenstein and Heather Morgan were arrested and convicted for money laundering. Lichtenstein admitted planning the hacker attack. Since then, the U.S. government held the seized coins as confiscated assets.
After the executive order for Bitcoin’s strategic reserve was signed,”Should Bitfinex’s Bitcoin be returned?” It has become a top concern for many industry participants, because this part of Bitcoin accounts for nearly 50% of the U.S. government’s Bitcoin holdings.
The key reason is Bitfinex’s post-hacker attack compensation plan: After the hacker attack in 2016, Bitfinex reduced all customer balances by 36%, and issued BFX (LEO) tokens, which were fully redeemed within a few minutes, which in the government’s view effectively made customers “complete.” As a result, Bitfinex, the entity that bore the losses, is considered the main claimant.
In October 2024, the U.S. Attorney’s Office in the District of Colombia filed a motion suggesting that Bitfinex may be the “only victim” eligible for compensation under the Crime Victims of Rights Act (CVRA) and the Mandatory Victim Compensation Act (MVRA). This challenge was reinforced in a January 2025 announcement when the government proposed returning Bitcoin to Bitfinex “in kind”(BTC, rather than in cash).
Bitfinex had previously promised to buy back LEO once it retrieved hacked bitcoins. Many former Bitfinex customers believe that they are entitled to the recovered Bitcoins given the significant appreciation of Bitcoins since 2016, and claim that the LEO token compensation on the Bitfinex platform does not reflect the future value of BTC.
So after news broke that the U.S. government applied for an alternative notification process to inform potential victims of the 2016 Bitfinex hacking incident in October 2024, Bitfinex platform token LEO quickly rose by nearly 40%, indicating that the market is highly optimistic about the U.S. government’s return of stolen bitcoins, and Bitfinex’s travel repurchase program.
Of course, with the signing of the executive order on strategic reserves, the U.S. government’s position may change at any time.
What else can I expect from the White House Crypto Summit?
In addition, David Sacks also mentioned in a tweet this morning that the executive order also established the “U.S. Digital Asset Reserve,” which is responsible for managing government digital assets under the leadership of the Treasury Department.
For David Sacks, the White House Crypto Summit to be hosted soon is the top priority at the moment. This summit is the first time that the White House has held such an event, and it has a high level of specifications. According to multiple media reports, the most eye-catching item at this summit may be the “National Cryptography Strategic Reserve” plan. The plan plans to incorporate mainstream cryptocurrencies such as Bitcoin, Ethereum, Solana, Cardano and Ripple (XRP) into the national reserve system, with a scale and functional positioning similar to traditional oil reserves. According to Forbes, the choice of reserve assets takes into account the characteristics of each currency: Bitcoin’s anti-inflation properties as “digital gold”, Ethereum’s smart contract ecosystem, Solana’s high-performance application platform, Cardano’s research-driven security architecture, and Ripple’s cross-border payment efficiency advantages.
In terms of regulatory system construction, the summit will focus on discussing the top-level design of stablecoins and the overall regulatory framework. Cointelegraph revealed that Trump adviser David Sachs advocates strengthening U.S. dollar hegemony through stablecoins, a view that may affect the federal regulatory plan. The draft bill currently being promoted by the House Financial Services Committee shows that stablecoin institutions with circulation exceeding US$10 billion may be included in the Federal Reserve’s regulatory system, forming a dual-tier regulatory structure between federal and state governments. At the same time, the 21st Century Financial Innovation and Technology Act proposed in 2023 may usher in substantial progress. Its core is to coordinate the regulatory powers and responsibilities of the SEC and the CFTC and build a digital asset supervision paradigm that takes into account innovation and security.
To achieve the strategic goals of the “Crypto Capital”, the summit may launch a series of innovation incentives and tax-related policies. CryptoBriefing analysis pointed out that the government may relax regulatory restrictions during the Biden era. An unexpected detail is that the summit may also discuss crypto-related tax reforms. According to BeInCrypto, tax reform could be part of the agenda that could affect investors ‘tax burdens, involving streamlining tax reporting on crypto transactions or providing tax incentives to boost industry growth.
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