U.S. Bitcoin Reserve Faces Credibility Crisis After $40M Theft Allegations Expose Custody Gaps

A $40 million theft allegation has exposed vulnerabilities in the U.S. government’s $28 billion Bitcoin custody system, raising urgent questions about its readiness to manage a sovereign-scale digital asset reserve.

Blockchain investigator ZachXBT alleges $40 million was siphoned from U.S. government-linked seizure wallets in 2024. The theft is linked to John Daghita (“Licks”), whose father Dean Daghita is president of CMDSS, a firm contracted by the U.S. Marshals Service (USMS) to manage seized crypto.

The alleged breach occurred via a Telegram dispute where a persona screen-shared an Exodus wallet, enabling ZachXBT to trace illicit flows totaling $90 million, including $24.9 million from a U.S.-controlled wallet.

The U.S. government holds approximately $28 billion in Bitcoin, but custody operations are fragmented across agencies, legal statuses, and storage solutions. A 2025 GAO document confirms CMDSS manages “Class 2–4 cryptocurrencies,” which require specialized handling and represent the “hard tail” of crypto custody.

A 2022 DOJ audit warned of gaps in inventory controls for seized crypto, and a 2025 report highlighted the USMS’s inability to estimate its BTC holdings accurately.

Murtuza Merchant said:

"If criminals believe seized funds can be siphoned from government wallets, they may treat forfeiture as a temporary inconvenience, not an endpoint, especially if laundering routes exist through exchanges and cross-chain hops."

⚠️ LEGAL DISCLAIMER: This article is for informational purposes only and does not constitute financial or investment advice.