Regarding freezing bank accounts in court cases, I wonder how they will handle things when bitcoin eventually starts to become commonplace. Probably threaten with prison or something? Will be interesting in any case.
That's something I have thought about in the past.
I would say it would go like this:
- If the court has proof you got (or were supposed to have the BTC) then order you to render them. If you don't then yep, threat you with a) Big fines and b) Prison. Also sometimes a Search warrant is issued and it could lead to: a) The keys of your BTC holdings (yes, it happens!) or b) Additional proof about you hodling BTC.
- If the court doesn't know/have proof of you having BTC and you end up with a sentence that orders you to pay an amount you can't pay with what you "officially" have (registered assets, bank accounts) then: a) you end up in debt for the rest of your life for whatever future income you may have b) Sometimes also jail time if you don't pay, so it is your decision if you want to use the BTC to pay to avoid prison or not.
In either case, after you have claimed to be officially broke (while hodling BTC on the sideline) good luck on using/converting those BTC in the future to "official money on your name" because:
a) As soon as you do you are supposed to pay the amounts you owe.... which have probably growed a lot due to outrageous official interest fees (6%) and surcharges (up to 3x the initial amount excluding interests).
b) Even if at that moment BTC has grown so much that you can fully pay your debt with a nice remaining.... you would have a hard time laundering those unexplained BTC and profits that you already had (ie. not bought AFTER... which anyways you couldn't because you had a debt pending, member?) while declaring yourself broke. You can't just produce them out of thin air, specially not after you have claimed bankruptcy in the past.
It's basically the same that happened to people being officially broke but having a lot of cash hidden somewhere or unconnected offshore accounts.
Also KYC/AML is and will keep tightening in the future so "black markets" will be your only resort, not being able to buy any registered assets (real estate, cars, BOATS, etc) use of credit cards, etc.... AND be careful with showing "external signs of wealth" or you could face new charges of money laundering in addition to what you already had pending.
Once you are declared "officially" broke and in DEEP debt, you are basically "broke" for the rest of your life no matter what you may have hidden somewhere. There are exceptions, but those are usually pretty expensive and/or require moving to another country where you may launder your hidden money with less of a burden.
That's more or less how it works..... Bitcoin is not that different in that to other "hidden" wealth sources and it would be subject to the same "treatment".
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