Hacker News Reader

The user was alerted to this fact, sent it to Coinbase, liquidated it to USD, and is in the process of sending that to the OFAC.

What happens to digital currency confiscated by the government? Do they cash it out or does it just sit in a wallet somewhere?

In the past I've seen articles where they auction it off. I imagine it depends on the reason it is seized and which department it is.