Crypto News: Why United Kingdom Is Considering Selling Bitcoin?

The United Kingdom is preparing to sell over £5 billion worth of seized Bitcoin to reduce pressure on public finances.

Chancellor Rachel Reeves is overseeing the plan, with the Home Office developing a framework to manage and sell the assets.

Government to Sell Seized Bitcoin as Budget Pressures Mount

In a significant crypto news development, the United Kingdom is discussing plans to sell over £5 billion worth of Bitcoin to help ease a growing fiscal gap.

Let’s recall that the British Police Force recovered the digital assets from past criminal investigations, including a major seizure in 2018 tied to a Chinese fraud case.

According to a report from The Telegraph shared by Wu Blockchain, Chancellor Rachel Reeves was considering the sale of these holdings as part of efforts to manage rising debt and weak economic growth.

It is worth noting that the Home Office has started collaborating with law enforcement to establish a central framework for storing and selling the seized Bitcoin.

The system is known as the crypto storage and realization framework. It was designed to standardize the handling of digital assets once they are seized.

Although law enforcement agencies carried out the seizures, the Treasury was closely monitoring developments due to the significant financial value involved.

The most significant portion of the Bitcoin came from a 2018 raid that resulted in the seizure of 61,000 coins.

Bitcoin reached above $123,000 earlier this month. At current prices, it pegged the value of the proposed BTC sale at over £5.4 billion.

The Home Office plans to issue a tender offering up to £40 million in commission to firms that could manage the asset sale.

While initial bids did not meet the government’s standards, the project was expected to continue under revised terms.

More importantly, revenue from sales not returned to fraud victims would be divided between the central government and the police forces involved.

According to the update, Treasury officials believed that the operation could provide a short-term financial boost.

Bitcoin Seized from 2018 Fraud Case Forms Core of Holdings

The bulk of the seized Bitcoin was linked to Jian Wen. He is a Chinese national convicted in connection with a large Ponzi scheme.

As revealed, UK police recovered 61,000 Bitcoin during a 2018 investigation. That seizure formed the core of the assets the government now planned to sell.

The case was still under legal review, and some of the victims had requested the return of funds.

If the Treasury kept half of the value, around £2.6 billion could go toward filling the budget gap. Former Chancellor Norman Lamont urged the current government to use the money quickly.

Others warned that rushing the sale could lead to long-term losses. Meanwhile, observers compared the situation to the 1999 gold sale.

It was under the then-Chancellor Gordon Brown, when the UK sold gold reserves at historically low prices. That decision later drew widespread criticism.

Political Reactions Highlight Broader Crypto Policy Divide

It is worth mentioning that the proposal to sell Bitcoin brought mixed responses from political figures.

Reform UK leader Nigel Farage called on the government to create a national Bitcoin reserve. This is similar to a plan already signed by President Donald Trump in the United States.

Still, the Labour Party dismissed that suggestion. They argued that Bitcoin’s price volatility made it unsuitable for long-term government holdings.

Meanwhile, Professor Michael Levi of Cardiff University said legal delays often meant that seized digital assets had to be stored securely for long periods.

He added that managing them properly would remain a challenge.

Aidan Larkin, chief executive of Asset Reality, said digital assets might provide new revenue opportunities for governments over the coming decade.

However, the focus remained on how the UK would handle this specific sale. The outcome of the UK’s Bitcoin sale could set a precedent for how governments manage large digital asset seizures.

It is important to add that decisions made in the coming months may shape future policy on cryptocurrency and public finance.