Why Reeves should sell her bitcoin hoards
As Rachel Reeves starts sketching out her autumn Budget, most of the focus has been on the tax hikes she'll need if she's serious about sticking to the 'ironclad' fiscal rules she recommitted to just last week. Economists reckon the wafer-thin £9.9 billion margin she left herself at the Spring Statement has already been wiped out and that she's now staring down a black hole of over £20 billion.
So it was a relief to read this morning that the Treasury isn't relying solely on tax rises and has discovered a rather large stash of money down the back of the government sofa. According to The Telegraph, the government is developing a system to allow police forces and the National Crime Agency to sell more than £5 billion crypto assets seized in recent years
We don't know the total amount of confiscated crypto the state is sitting on but one seizure in 2018 took in 61,000 bitcoin. If sold today, it would bring in some £5.4 billion – more than triple the culture budget and twenty times its value on the day the police got their hands on it.
Jian Wen, who worked in a chinese takeaway, was convicted of laundering money – and her bitcoin seized – from a crypto scam carried out in China when she went from a life living in 'shabby Chinese restaurants' to putting cash offers on £24 million pound houses in Hampstead and villas in Tuscany.
Victims of that Wen's ponzi scheme will be entitled to any proceeds of the sell off but experts are confident that enough of them will be untraceable that the Treasury can scoop up the rest and use it to start plugging the black hole.
Of course, if Reeves does press 'sell', she will be accused of 'pulling a Gordon Brown', and selling the gold. Bitcoin is already up nearly 20 per cent this year and on current trajectories the Wen haul could be worth over £200 billion in 20 years.
But she'd be wise to ignore those voices. Sure, crypto probably will rise. But given it has no fundamental value it might nosedive too. And the state simply can't afford to gamble on highly volatile assets when the public finances are in the mess they are in.
So if this really is the plan, the Chancellor should act fast, take the money, and resist the temptation to hold. If all goes well she can treat herself to a Chinese.
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