Cryptocurrency Confiscation on the Rise: Impact of IRS’s Surveillance Plans
As the Internal Revenue Service (IRS) moves forward with its plans to enhance surveillance of cryptocurrency transactions, some worry that it might lead to a surge in crypto confiscations.
A 2022 report published by the Department of Justice (DOJ) in response to President Biden’s Executive Order 14067 reveals how this information may be utilized, pointing to potential consequences for cryptocurrency holders.
With the IRS poised to monitor Americans’ cryptocurrency usage through an expected 8 billion new returns, the DOJ could soon have unprecedented means to seize cryptocurrencies.
In fact, the commission mentioned the need for an enhanced ability to seize cryptocurrencies.
It claimed that there is a need for forfeiting the proceeds of cryptocurrency fraud and manipulation in order to deter and strip wrongdoers of their illicit gains.
Consequently, the DOJ recommends expanding its authority over criminal, civil, and administrative forfeiture, citing the need for more effective tools to deprive offenders of ill-gotten gains and potentially restore funds to victims.
However, the DOJ’s argument for increased seizure capabilities raises questions, considering the government’s demonstrated ability to seize substantial amounts of cryptocurrency in the past.
The report itself acknowledges that between 2014 and 2022, the FBI seized approximately $427 million in cryptocurrency, while the IRS confiscated another $3.8 billion between 2018 and 2021.
These figures exceed $4 billion, suggesting that the government has been successful in cryptocurrency confiscation.
The IRS’s proposal to monitor cryptocurrency transactions takes on greater significance when considered alongside the DOJ’s report.
The extensive surveillance that the proposal
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