Reported by: Nick Sibilla

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.

Read full report: https://www.forbes.com/sites/nicksibilla/2022/10/25/biden-administration-wants-to-make-it-easier-to-seize-crypto-without-criminal-charges/?sh=75b8cdaf557d