What Happens to Cryptocurrency Seized In Criminal Investigations

Civil Forfeiture

As the cryptocurency market grows year after year, so does the number of cryptocurrency related crimes. From scams to ponzi schemes, cryptocurrency holders have fallen victim to all kinds of criminal activity recently.

In this article, we’ll ask one very important question; What happens to cryptocurrency seized in criminal investigations? And why does it matter?

Recent Events

Earlier this year, the UK passed legislation that would grant authorities greater liberty to size stolen or illegally acquired crypto assets. Earlier in the US, the government had already confiscated a total of $3 billion in cryptocurrency. As law enforcement continues to tighten their grip on the cryptocurrency market, experts are certain that the amount of confiscated cryptocurrency, and other crypto assets, will rise.

What is Civil Forfeiture?

Law enforcement seizing stolen assets is by no means a new concept, nor is it exclusive to cryptocurrency. Known as Civil Forfeiture, such action has been taken by law enforcement agencies for decades, and it hasn’t been without controversy.

In the US, any and all assets seized by law enforcement are immediately considered the property of the government, by law. Cryptocurrency is no different. Data suggests that around only 1% of seized assets in America are returned to their rightful owners.

How Are Seized Assets Used?

Although cryptocurrency might be seized the same way traditional assets are, they aren’t used in the same way. For example, traditional assets like fiat money seized by police are used to fund police activity, such as purchasing new equipment.

Cryptocurrency on the other hand is to the Department of Justice, who are then responsible of auctioning the cryptocurrency off, in exchange for traditional money. The money acquired from such an auction is then used to fund law enforcement.

Closing Words

Hopefully, this article offered some deeper insight into the cryptocurrency market and law enforcement. For more of the latest news and information on cryptocurrency, stay on our website.

Sources

https://time.com/nextadvisor/investing/cryptocurrency/common-crypto-scams/

https://www.bloomberg.com/news/features/2022-04-12/what-happens-when-cops-seize-crypto-and-bitcoin#:~:text=Once%20seized%2C%20it%20can%20take,have%20a%20right%20to%20it.

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