I think, there is nowhere that states a seized asset cannot be a reserve.  As far as I know, it was misunderstood that seized assets need to be auctioned since the previous assets that were confiscated from criminal activities are auctioned, but there is nowhere in the law or guidelines that these seized assets are not fit for reserve.  They had these seized assets from hacks and other criminal activities auctioned to recover costs or fund some programs.

With this I believe it is ok for the seized Bitcoin to be a Bitcoin reserve since there is no law forbidding it.


I think they are just being smart.  Why sell seized Bitcoin when they can just put it in reserve?  It is illogical if they already have Bitcoin and sell it then buy again for their Bitcoin reserve.