Biden Administration Wants To Make It Easier To Seize Crypto

[Hydrogen]

Buried deep in a 61-page recent report by the U.S. Attorney General, the Biden Administration called for a dramatic expansion in the federal government’s ability to seize and keep cryptocurrency. If enacted, the proposed changes would bolster both criminal forfeiture, which requires a conviction to permanently confiscate property, as well as civil forfeiture, which doesn’t require a conviction or even criminal charges to be filed.

Notably, the report’s release was coupled with the announcement of a new Digital Asset Coordinator Network. This nationwide network is staffed with more than 150 federal prosecutors who will be trained on “drafting civil and criminal forfeiture actions.”

Due to crypto’s pseudonymous nature, it’s sometimes assumed to be immune from government confiscation. But the reality is quite different. Last year, the U.S. Marshals—the custodians for Justice Department seizures—managed almost 200 cryptocurrency seizures worth $466 million.

Since fiscal 2014, the FBI, Secret Service, and Homeland Security Investigations have collectively seized almost $680 million worth of crypto (valued at the time of seizure), with hundreds of still active investigations involving digital assets. But even those amounts pale in comparison to IRS Criminal Investigation, which has confiscated a staggering $3.8 billion in virtual currency between fiscal 2018 and 2021.

Nevertheless, the Justice Department argued that crypto has “revealed limits on the forfeiture tools used” by federal law enforcement and recommended “several updates to existing law.” First, the Attorney General wants to broaden the most abusive form of civil forfeiture, which occurs without any independent or impartial judicial oversight.

Under “administrative” or “nonjudicial” forfeiture, the seizing agency—not a judge—decides whether a property should be forfeited. The federal government can use administrative forfeiture to take almost anything, aside from real estate and property valued at more than $500,000.

That $500,000 limit currently applies to cryptocurrency, but the Attorney General wants to “lift the $500,000 cap for cryptocurrency and other digital assets.” This would eliminate one of the very few limits on administrative forfeiture. Even if Congress refuses to act, thanks to a law enacted last year, the Secretary of the Treasury could simply end the cap by adopting new regulation.

This proposal is deeply concerning. Administrative forfeiture provides shockingly scant protection for property owners. After seizing property, the government need only send notice of an administrative forfeiture. If an owner fails to quickly file a claim for their own property, it’s automatically forfeited.

Since the seized property may be the owner’s most valuable asset, owners often don’t have the means to fight back. Yet even when a claim is filed, the owner still might not get their day in court. According to a report by the Institute for Justice, federal agencies have rejected more than one-third of all filed claims for seized cash as “deficient,” with most claims denied due to “technical reasons.”

Unsurprisingly, since administrative forfeiture cases are significantly easier for the government to win, administrative forfeitures accounted for almost 80% of all forfeitures conducted by the Department of Justice and 96% of the Treasury Department’s forfeiture activity.

Although the Justice Department praises administrative forfeiture for being “efficient” and for reducing “undue burdens” in the court system, in reality, administrative forfeiture has burdened the lives of thousands of victims who’ve done nothing wrong.

Just ask Ken Quran. After coming to America from the Middle East, he opened a small convenience store in Greenville, North Carolina. But in June 2014, IRS agents barged into his store and told Ken they had a warrant to seize $570,000 and had already seized every penny in his bank account—$153,907.99. That money was Ken’s entire life savings, earned over nearly 20 years of long hours running his business.

Less than three months later, Ken’s bank account was administratively forfeited. Without those savings, Ken was driven to the financial breaking point. He struggled to support his family, pay off his mortgage, and cover a line of credit he had to take out to keep his store afloat. Ken was never charged with a crime.

“I never believed this could happen in America,” Ken lamented. “I do not understand how, in this country, the government can take an honest businessman’s entire bank account without proving that he did something wrong.”

Fortunately, with help from the Institute for Justice, Ken later filed a “petition for remission or mitigation” (basically a pardon for forfeited property). After a media firestorm, in February 2016, the IRS agreed to return all of the money they had wrongfully taken from Ken. Although he lost fiat currency rather than crypto, as Ken’s story shows, there is absolutely no need to make administrative forfeiture easier to use.

In addition to expanding administrative forfeiture for crypto, the Justice Department “would welcome amendments to provide criminal and civil forfeiture authority for commodities-related violations.” Allowing criminal forfeiture after a conviction for fraud or manipulation in crypto markets would be a valuable tool to crack down on scammers.

Currently, most cryptocurrencies are considered commodities rather than securities. So under federal laws governing commodities, prosecutors can “charge fraud and manipulation in the cryptocurrency markets.” But unlike securities, those statutes “do not permit forfeiture of ill-gotten gains from criminal activity involving commodities.”

But extending civil forfeiture casts far too wide a net and would make it much more likely for innocent holders to lose their crypto to government confiscation. After all, civil forfeiture lacks a conviction requirement, unlike criminal forfeiture. Moreover, there is a direct financial incentive for federal agencies to pursue forfeiture cases: Once property has been forfeited (either civilly or criminally), the seizing federal agency can retain up to 100% of the proceeds.

Unfortunately, the proposed expansions in asset forfeiture are part of a broader assault on cryptocurrency, including attacks on the financial privacy cryptocurrency can otherwise afford. The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) is currently considering a rule that would extend intrusive reporting requirements to custodial wallets (i.e. those managed by a third-party)—the same reporting requirements that led the IRS to seize Ken’s cash.

If adopted, the wallet’s host would have to send detailed reports to FinCEN for every transaction with an unhosted wallet over $10,000, including personal information like the names and physical addresses of both parties involved in the transaction. Since the blockchain is inherently public, a single report on a single transaction would effectively become a digital skeleton key, letting the federal government snoop on all of the wallet’s other transactions.

This is moving in precisely the wrong direction. No matter how the midterms shake out, Congress must reject the proposed crypto crackdown and rein in civil forfeiture.


https://www.forbes.com/sites/nicksibilla/2022/10/25/biden-administration-wants-to-make-it-easier-to-seize-crypto-without-criminal-charges/

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This type of search and seizure in the united states has been present for many years. I think the most public of these cases was the federal DEA raiding medical marijuana dispensaries in california to seize funds in excess of $100,000. It was a well publicized act for many years. But I think that most who heard about it happening, didn't truly understand what it meant at the time.

Now it appears that the state is taking steps to expand its search and seizures. A trend which began many years ago during peak anti terrorism years when search and seizure laws were expanded to a point where they often no longer needed a warrant. I think that may have occurred under the patriot act. Today we have many americans who say that police cannot search your vehicle or home without a warrant. Not realizing the patriot act changed laws to allow search of cars and homes with no warrant process. Surveillance also can now be conducted without a warrant.

Does anyone have a good crypto wallet they would like to recommend under these circumstances?

[1715352022]

1715352022

[Smartprofit]

Bitcoin is not the only cryptocurrency in the world.  There is also Monero (XMR) - a cryptocurrency with increased anonymity and privacy.

Monero can be easily used for business transactions.  Monero also has wallets that work on smartphones (light clients).  Recommended wallets are Monerujo and Cake Wallet.  

In the context of tightening legislative regulation, it is logical to switch to using a more anonymous and confidential cryptocurrency, i.e.  Monero.

In addition, it is not necessary to have a wallet to store cryptocurrency, it is enough to remember Seed.  If you remember Seed, then nothing will be found during a police search, since in fact the cryptocurrency is in your head, and it is difficult to conduct a search in your head.

[NeuroticFish]

Bitcoin is not the only cryptocurrency in the world.  There is also Monero (XMR) - a cryptocurrency with increased anonymity and privacy.

Plus many Bitcoin wallets offer features for plausible deniability.
Plus, it's always a very good idea to diversify if you can afford that.

There can be good reasons behind seizing money from wrongdoers. But mistakes do happen. Law can be great and can be a bitch, depending on how good or bad it's applied. Those applying it can make mistakes or can have bad intentions too, unfortunately. But with crypto there are plenty of tools, one has only to be smart enough and use them.

[zasad@]

Does anyone have a good crypto wallet they would like to recommend under these circumstances?

The US has very strict tax crime laws. If you have cryptocurrency, then you are required to file declarations and pay taxes. I heard that in the USA there is a shadow market where you can exchange stablecoins for dollars, paying a 2-3% commission.
The best cryptocurrency is the one that no one knows about.

[so98nn]

That definitely sucks but instead of seizing the crypto currencies they should be enforcing taxation law. If anyone is possessing more than 100k in crypto then allow them but once they convert it to the USD which they will have to someday if they want to use it then make them entitled for tax payments. It is that simple but NO it’s USA, they always have to do something out of the box so what can one say?
On the other hand various countries are imposing taxes but at least peeps are happy trading it.

Does anyone have a good crypto wallet they would like to recommend under these circumstances?

Your best shot is hardware wallet. Put crypto in it, buy locker at the nearest bank and put it safely there. 

[NeuroticFish]

Does anyone have a good crypto wallet they would like to recommend under these circumstances?

Your best shot is hardware wallet. Put crypto in it, buy locker at the nearest bank and put it safely there.  

Actually they can easily seize it from the bank's locker. So either use plausible deniability, either go for burying some washers (containing the seed, obviously; maybe using Shamir Secret Sharing) in the backyard.

[Fivestar4everMVP]

Well, in all honesty, i personally do not see anything wrong with this as long they are not seizing crypto from innocent people but criminals and scammers that's been reported to them by the public or whoever and they find the reported person(s) guilty as charged.
It can only become a problem for the ordinary person out there if the future, they ban the use of crypto and are asked to seize crypto from individuals caught transacting on crypto, at this time, we all will know its now a war against crypto itself and no longer a war against criminal elements that uses crypto as a way to avoid being traced.

Does anyone have a good crypto wallet they would like to recommend under these circumstances?

What other wallet is more secure than hardware wallets? except there is a dark web wallet that is more secure and highly untraceable that its addresses, wallet balances and transactions can't be found or viewed on the blockchain explorer, i highly doubt there's a wallet of this capability any where yet.

[stompix]

This is moving in precisely the wrong direction. No matter how the midterms shake out, Congress must reject the proposed crypto crackdown and rein in civil forfeiture.

Too bad that the change (if it happens) in Congress won't be at all favorable, Republicans have always sought more control, and since the article does relate to the Patriot act, it was the Republicans who pushed it and the Democrats weren't all against it, how do you think this will look when the Dems are the ones pushing it? 545 pro votes about of 535?

In addition, it is not necessary to have a wallet to store cryptocurrency, it is enough to remember Seed.  If you remember Seed, then nothing will be found during a police search, since in fact the cryptocurrency is in your head, and it is difficult to conduct a search in your head.

The human brain is one of the most unreliable wallets out there.
Forgetting trauma that might affect it, I'm pretty sure that a few years in detention where you will only think of it stressed not to forget, with nothing to write down will create a mess in your head where you alone will screw your memory and the order of the words just like amnesia.

[Husires]

Is confiscation of money in the United States so easy? Here it is not possible to confiscate any funds without permission from the court and follow up the degrees of litigation in full.
Except in rare cases, when the emergency law is imposed, the government can confiscate property.
Bitcoin transactions are open and easy to track and the authorities will not be forced to use mixing or anonymizing services. Although it will happen in the future.

[NotATether]

Just ask Ken Quran. After coming to America from the Middle East, he opened a small convenience store in Greenville, North Carolina. But in June 2014, IRS agents barged into his store and told Ken they had a warrant to seize $570,000 and had already seized every penny in his bank account—$153,907.99. That money was Ken’s entire life savings, earned over nearly 20 years of long hours running his business.

Less than three months later, Ken’s bank account was administratively forfeited. Without those savings, Ken was driven to the financial breaking point. He struggled to support his family, pay off his mortgage, and cover a line of credit he had to take out to keep his store afloat. Ken was never charged with a crime.

You can't seize non-custodial bitcoins you don't have access to! That's exactly one of the reasons why it was created in the first place.

Does anyone have a good crypto wallet they would like to recommend under these circumstances?

Use Airgap Vault on an unused mobile device (its not readily available for PCs without some assembly required) and then install the Airgap wallet on a PC or mobile device.

[electronicash]

That definitely sucks but instead of seizing the crypto currencies they should be enforcing taxation law. If anyone is possessing more than 100k in crypto then allow them but once they convert it to the USD which they will have to someday if they want to use it then make them entitled for tax payments. It is that simple but NO it’s USA, they always have to do something out of the box so what can one say?
On the other hand various countries are imposing taxes but at least peeps are happy trading it.

Does anyone have a good crypto wallet they would like to recommend under these circumstances?

Your best shot is hardware wallet. Put crypto in it, buy locker at the nearest bank and put it safely there. 

that is about to happen. they have armed IRS agents which if you have heard it. they were training 87,000 IRS agents to enforce this taxation law. i can't picture it where they wear nice suits and busting doors to ask the private keys of your wallet. and guess what, their dogs sniffs hardware wallets.

if they are serious they better start with the list of names in the panama papers.

[el kaka22]

I still do not believe that Biden vs Trump thing is real, I believe that there are people who control USA and these people are just speakers, they do not really have a power over anyone. However, what I believe will happen is that Biden administration will fail this, they may want it, but they will not actually be able to do anything.

I feel like the best thing to do would be making sure that it is going to be a hard thing to do and if it’s hard to do then it won't be a problem because they are going away soon anyway. In a few months senate will turn republic, and that means everyone will block each other and nobody will be able to do anything.

[kryptqnick]

I am happy that I don't live in the US. Seizing funds without a criminal conviction and without even a strong criminal case that could perhaps justify freezing funds is very weird. But apparently it can be done in the US for all sorts of property and assets... Perhaps if your money is seized without a good reason, though, you can go to court and win, but that's still disturbing, especially given the stats of 80% of forfeitures being administrative.
Such legislation would motivate people not to declare their crypto assets, so that the IRS doesn't know how much they have and where, which in turn means not paying taxes. And, of course, storing only in a non-custodial wallet.

[coolcoinz]

Due to crypto’s pseudonymous nature, it’s sometimes assumed to be immune from government confiscation. But the reality is quite different. Last year, the U.S. Marshals—the custodians for Justice Department seizures—managed almost 200 cryptocurrency seizures worth $466 million.

This doesn't actually prove that cryptocurrency can be confiscated. Usually people trade their crypto for smaller sentences or simply give it away in hope of getting a smaller sentence, like Ross did and got screwed by the justice system.

We shouldn't put someone in debt, or charged with avoiding taxes in the same basket with gangsters. Normal people can easily hide their bitcoins and never be forced to give them away, but just as it is with gold and other valuables, the weak point is you. There were robberies (one in Russia from what I remember) where the robbers tortured their victim to get cryptocurrencies. The government can do the same and then all anonymity and security that bitcoin provides won't matter.

[gantez]

This is moving in precisely the wrong direction. No matter how the midterms shake out, Congress must reject the proposed crypto crackdown and rein in civil forfeiture.

This is showing that the law is very harsh on the people hodling cryptocurrency there. Except it is for the criminal purpose people but if this affect the masses,, they have that right to say no to the law so that they will stop the law. They can do lobby to the senators to change the law they made by protest, peaceful rally.

[Gyfts]

Well, in all honesty, i personally do not see anything wrong with this as long they are not seizing crypto from innocent people but criminals and scammers that's been reported to them by the public or whoever and they find the reported person(s) guilty as charged.
It can only become a problem for the ordinary person out there if the future, they ban the use of crypto and are asked to seize crypto from individuals caught transacting on crypto, at this time, we all will know its now a war against crypto itself and no longer a war against criminal elements that uses crypto as a way to avoid being traced.

Does anyone have a good crypto wallet they would like to recommend under these circumstances?

What other wallet is more secure than hardware wallets? except there is a dark web wallet that is more secure and highly untraceable that its addresses, wallet balances and transactions can't be found or viewed on the blockchain explorer, i highly doubt there's a wallet of this capability any where yet.

The problem of civil forfeiture is that it is within itself a civil matter, not a criminal matter. Meaning, the owner of the seized property does not need to be criminally convicted for the property to be seized or sold by authorities.

I wouldn't have a problem if it was guilty people that had their assets seized, this happens all the time with preexisting law in most jurisdictions. A drug dealer gets caught, assets seized, drug dealer gets criminally convicted and they're sent off to prison without retaining any of their illegally obtained assets.

I don't trust the government to apply their arbitrary evidence threshold that's required to seize assets. If you want to dispute them, then you're on the hook for some absurd amount of legal fees for the crime of wanting to get back property that was taken by the government without just criminal cause.