Security of the US government’s $28B Bitcoin reserve threatened after weekend theft reveals flaw

The US government's ambition to establish a strategic Bitcoin reserve, often likened to a “digital Fort Knox,” is facing scrutiny after allegations of a $40 million theft from wallets holding seized cryptocurrency. The incident raises concerns about the security and auditable controls of Washington’s management of its substantial Bitcoin holdings. The alleged breach involved a contractor, Command Services & Support (CMDSS), and an individual with ties to the firm, highlighting vulnerabilities in custody governance, contractor access, and human error. The US government’s Bitcoin holdings are fragmented across multiple agencies and storage solutions, creating a complex operational system susceptible to process failures. The incident underscores the need for improved security measures and consistent controls, especially as the government transitions from a temporary custodian to a long-term holder of Bitcoin as a reserve asset, demanding vault-grade security akin to gold reserves.

(Source：CryptoSlate)