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The IRS has seized $1.2 billion worth of cryptocurrencies in FY 2021

Sourced from seizures, the IRS is sitting on a giant pile of cryptocurrency that will only continue to grow.

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For anyone who is sitting on a pile of bitcoin and is currently committing crimes, you should know that the IRS can and will come for that money. Following a string of seizures from drug and tax avoidance cases, the IRS is currently sitting on various lots of cryptocurrencies that have an estimated value of over $1.2 billion — and that’s just what was seized during the 2021 fiscal year so far.

Much like they would with piles of loose cash or bank accounts tied to criminal enterprises, the IRS is seizing and auctioning off large amounts of cryptocurrency. Along with items like boats, weapons, and real estate, it is not uncommon for law enforcement to seize property as part of sting operations. Once the applicable cases are settled, the property is auctioned off.

“It could be 10 boats, 12 cars, and then one of the lots is X number of bitcoin being auctioned,” Jarod Koopman, director of the IRS’ cybercrime unit, told CNBC. “In fiscal year 2019, we had about $700,000 worth of crypto seizures. In 2020, it was up to $137 million. And so far in 2021, we’re at $1.2 billion.”

Where does the money from the auctioned off lots of cryptocurrency go? Once the adjacent cases are closed and the cryptocurrency is swapped for fiat currency, the funds are then split up amongst government offices. The large majority of these funds go to the Treasury Forfeiture Fund or the Department of Justice Assets Forfeiture Fund. Once it finds its way into one of these two funds, the liquidated crypto can then be put toward a variety of line items. Congress has the power to appropriate the funds and put it toward funding projects.

While things seem fine and dandy for those splitting up the windfall from these crypto seizures, some critics have concerns about a lack of oversight and transparency on the handling and protocols surrounding these funds. 

“I don’t believe there’s any one place that has all the crypto that the U.S. Marshals are holding, let alone the different states that may have forfeited crypto. It’s very much a hodgepodge,” explains Alex Lakatos, a partner with DC law firm Mayer Brown, who advises clients on forfeiture. “I don’t even know if someone in the government wanted to get their arms around it, how they would go about doing it.”

Contributing Tech Editor

Chris Jarrard likes playing games, crankin' tunes, and looking for fights on obscure online message boards. He understands that breakfast food is the only true food. Don't @ him.

From The Chatty
  • reply
    August 5, 2021 3:55 PM

    Chris Jarrard posted a new article, The IRS has seized $1.2 billion worth of cryptocurrencies in FY 2021

    • reply
      August 5, 2021 4:41 PM

      They can have all my tanked crypto. lol

      • reply
        August 5, 2021 4:41 PM

        I will keep it safe and free from tax implications.

        • reply
          August 5, 2021 4:42 PM

          Keep it secret keep it safe!

          • reply
            August 5, 2021 4:48 PM

            Me to Tommy someday: The way your dad looked at it, this crypto was your birthright. He'd be damned if any feds gonna put their greasy hands on his boy's birthright, so he hid it, in the one place he knew he could hide something: Ryuu's ass in a nano usb flash drive hard wallet. Five long years, he wore this drive up his ass. Then when he died of fascism, he gave me the key. I hid this uncomfortable piece of plastic up my ass for two years. Then, after seven years, I was sent home to my family. And now, little man, I give the crypto to you.

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