Billions in Seizable Crypto Assets Could Boost National Reserves
As governments worldwide consider establishing national cryptocurrency reserves, a recent report from Chainalysis reveals that tens of billions of dollars in potentially recoverable on-chain assets may already be within their reach. This development could have significant implications for these reserve discussions, particularly in the context of asset forfeiture and budget-neutral means of expanding federal crypto holdings.
According to the report, crypto assets linked to illicit activities total over $75 billion, with approximately $15 billion held directly by illicit companies and more than $60 billion in wallets with downstream exposure to these companies. Notably, darknet market operators and providers control more than $40 billion in crypto assets on the blockchain, with about 75% of all illicit value held in Bitcoin (BTC), although stablecoins are increasingly being used for these activities.
Chainalysis’s findings highlight the potential for law enforcement to seize billions of dollars in illicit proceeds sitting on public blockchains, provided they can coordinate their efforts effectively. Jonathan Levin, co-founder and CEO of Chainalysis, emphasized that these numbers “take the potential for asset loss to a completely different level” and could fundamentally change the way countries approach this issue.
A recent example of such action is the seizure of about $40 million in digital assets from TradeOgre, a cryptocurrency exchange accused of operating without registration and facilitating money laundering, by Canadian authorities. While this move was met with criticism from the crypto community, it underscores the growing role of law enforcement in the cryptocurrency space.
Blockchain Transparency and the Perception of Crypto Crime
Despite the increase in crypto crime, including high-profile hacking attacks, the overall volume of illegal transactions on blockchain networks remains relatively low. Chainalysis’s 2025 Crypto Crime Report found that illegal transactions accounted for just 0.14% of all blockchain activity in 2024, continuing a downward trend from previous years.
In contrast, the United Nations Office on Drugs and Crime (UNODC) estimates that 2-5% of global GDP is laundered through traditional financial systems. The transparency of blockchain networks, where every transaction is publicly traceable, makes illegal activities easier to detect and report, contributing to the disproportionate attention given to cryptocrimes.
The crypto ecosystem’s relative newness and the intense regulatory and enforcement scrutiny it faces also reinforce the perception of widespread misconduct. However, as the space continues to evolve and mature, it is essential to consider the actual scale of crypto crime and the opportunities for law enforcement to combat it effectively.
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