US Marshals missed deadline for report on Silk Road Bitcoin to Senator Lummis

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Senator Lummis called for accountability and transparency in managing digital assets.

The US Marshals Service (USMS) missed a Friday deadline to provide detailed information about its handling of Bitcoin seized from the Silk Road case to Senator Cynthia Lummis, a development that sources with knowledge of the matter had indicated.

Senator Lummis, in a letter to the USMS last month, raised concerns about the agency’s planned sale of approximately 69,370 seized Bitcoin, valued at about $7 billion at the current market price. She cited potential financial losses for taxpayers and a conflict with the Trump administration’s policy directives.

Lummis’ letter to USMS highlighted the agency’s previous Bitcoin sales, noting that disposals of 195,092 Bitcoin between 2014 and 2023 generated around $366 million. Those same holdings would be worth over $18.9 billion at current market prices, representing what Lummis called a “staggering 98% loss in potential value.”

The letter also noted a recent court filing where the Department of Justice cited Bitcoin price volatility to justify an expedited sale. She found the Department’s aggressive pursuit of liquidation, despite pending legal challenges, troubling, especially during the presidential transition period.

The letter called for greater transparency in the USMS’s management of Bitcoin assets, including public disclosure of holdings. It also sought to hold the agency accountable for past losses and ensure better decision-making in the future.

At the time the letter was published, there was a widespread expectation within the crypto community that Trump would issue an executive order (EO) to establish a national Bitcoin stockpile, a key promise from his presidential campaign.

On Jan. 23, the President signed an EO directing a working group to assess the feasibility of creating a national digital asset stockpile.

While the order does not fulfill the specific promise of a dedicated Bitcoin reserve, it leaves open the possibility that Bitcoin could be part of a stockpile if it is established, which could potentially include Bitcoin and other crypto assets seized by federal authorities.

The USMS, which oversees digital assets seized during criminal investigations, manages an asset forfeiture program valued at approximately $7.6 billion as of September 2024.

While the agency missed the deadline, a person familiar with the matter said it would brief Lummis and her staff in coming weeks and provide an inventory of its Bitcoin holdings.

Senator Lummis has been appointed chair of the newly formed Senate Banking Subcommittee on Digital Assets. This subcommittee is the first of its kind, dedicated to overseeing digital assets under the Senate Banking Committee, now led by Senator Tim Scott.

The subcommittee aims to pass bipartisan legislation that establishes a comprehensive legal framework for digital assets. This framework is intended to promote responsible innovation while protecting consumers and includes provisions for market structure, stablecoins, and a strategic Bitcoin reserve.

Lummis briefly led an effort to create a US strategic Bitcoin reserve through proposed legislation called the BITCOIN Act, which would allow the government to acquire one million Bitcoins, approximately 5% of the total supply.

The bill was dead as of January 3, 2025, but if she plans to reintroduce it in 2025, it could capitalize on support from the newly elected crypto-friendly administration.