The IRS Has Seized $1.2 Billion Worth of Cryptocurrency This Fiscal Year (cnbc.com) 76
The U.S. government regularly holds auctions for its stockpile of bitcoin, ethereum, litecoin and other cryptocurrencies it seizes and then holds in crypto wallets. "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," said Jarod Koopman, director of the IRS' cybercrime unit. CNBC reports: As cybercrime picks up -- and the haul of digital tokens along with it -- government crypto coffers are expected to swell even further. Interviews with current and former federal agents and prosecutors suggest the U.S. has no plans to step back from its side hustle as a crypto broker. The crypto seizure and sale operation is growing so fast that the government just enlisted the help of the private sector to manage the storage and sales of its hoard of crypto tokens.
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Once a case is closed and the crypto has been exchanged for fiat currency, the feds then divvy the spoils. The proceeds of the sale are typically deposited into one of two funds: The Treasury Forfeiture Fund or the Department of Justice Assets Forfeiture Fund. "The underlying investigative agency determines which fund the money goes to," said [Sharon Cohen Levin, who worked on the first Silk Road prosecution and spent 20 years as chief of the money laundering and asset forfeiture unit in the U.S. Attorney's Office for the Southern District of New York]. Koopman said the crypto traced and seized by his team accounts for roughly 60% to 70% of the Treasury Forfeiture Fund, making it the largest individual contributor.
Once placed into one of these two funds, the liquidated crypto can then be put toward a variety of line items. Congress, for example, can rescind the money and put that cash toward funding projects. "Agencies can put in requests to gain access to some of that money for funding of operations," said Koopman. "We're able to put in a request and say, "We're looking for additional licenses or additional gear,' and then that's reviewed by the Executive Office of Treasury." Some years, Koopman's team receives varying amounts based on the initiatives proposed. Other years, they get nothing because Congress will choose to rescind all the money out of the account.
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Once a case is closed and the crypto has been exchanged for fiat currency, the feds then divvy the spoils. The proceeds of the sale are typically deposited into one of two funds: The Treasury Forfeiture Fund or the Department of Justice Assets Forfeiture Fund. "The underlying investigative agency determines which fund the money goes to," said [Sharon Cohen Levin, who worked on the first Silk Road prosecution and spent 20 years as chief of the money laundering and asset forfeiture unit in the U.S. Attorney's Office for the Southern District of New York]. Koopman said the crypto traced and seized by his team accounts for roughly 60% to 70% of the Treasury Forfeiture Fund, making it the largest individual contributor.
Once placed into one of these two funds, the liquidated crypto can then be put toward a variety of line items. Congress, for example, can rescind the money and put that cash toward funding projects. "Agencies can put in requests to gain access to some of that money for funding of operations," said Koopman. "We're able to put in a request and say, "We're looking for additional licenses or additional gear,' and then that's reviewed by the Executive Office of Treasury." Some years, Koopman's team receives varying amounts based on the initiatives proposed. Other years, they get nothing because Congress will choose to rescind all the money out of the account.
Have fun playing with your fake money (Score:2, Insightful)
If you want to trade it for real one though, pay your fucking taxes.
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Wow, the concept of trade will blow your mind right off.
Hint: just because something was paid for in the past doesn't mean it's sales-tax free in the future.
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Just because something exists doesn't mean the government deserves money for it.
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Yes, the government deserves money for doing absolutely nothing to create a digital currency created by a Japanese guy in another country mined using GPUs that you already paid sales tax on. Stop being so selfish and just give it to us.
So are you saying that if I purchase a hammer and paid sales tax on it, I should never have to pay tax on sales of products I created with it?
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Yes
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Because paying taxes on inflation makes lots of sense- don't want people avoiding the money printing tax.
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I'm sorry, what exactly do you think happens when you take your Bitcoin to an exchange?
The name might give you a hint.
Slightly misleading title (Score:4, Insightful)
Should read "The IRS seized a bunch of monopoly money currently exchangeable for $1.2B as of yesterday - might be $1.5B or $250M, depending on what the PRC decides in China tomorrow."
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Money is money. If it helps you, think of it as a foreign currency.
It really is not. This is more akin to the IRS seizing baseball cards.
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My favorite Bitcoin fact was that the original and historically biggest, Bitcoin currency exchange was named "Magic The Gathering Online eXchange", Mt Gox for short.
It was always baseball card trading, in essence.
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My favorite Bitcoin fact was that the original and historically biggest, Bitcoin currency exchange was named "Magic The Gathering Online eXchange", Mt Gox for short.
And it got hacked, more than once, because it was a bunch of card nerds with no security experience "pivoting" into the money. I feel like there's a lesson somewhere there...
Re: Slightly misleading title (Score:1)
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It really is not. This is more akin to the IRS seizing baseball cards.
Some baseball cards are worth a lot of money.
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Doesn't matter so long as there's somebody who will.
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What are you talking about? It is officially legal tender in El Salvador since Sep 2021.
Which really tells you everything you need to know about the subject.
If El Salvador legalized baseball cards as tender instead, it would've been the exact same thing, literally - they can enact zero monetary policy over BTC.
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What are you talking about? It is officially legal tender in El Salvador since Sep 2021.
Which really tells you everything you need to know about the subject.
If El Salvador legalized baseball cards as tender instead, it would've been the exact same thing, literally - they can enact zero monetary policy over BTC.
You can pay your taxes with Bitcoin in El Salvador. It IS money, like it or not.
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You can also pay taxes by selling baseball cards. Or, to put this another way, if you hold BTC this morning, you have no idea how many taxes you'll be able to pay with those in the afternoon.
It's yet to be seen how ES's Bitcoin experiment evolves in the near future, because much as they'd like to, you can't just will tokens into currency.
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It really is not. This is more akin to the IRS seizing baseball cards.
It really is not. This is more akin to the IRS reassigning a set of serial numbers representing IOUs to themselves.
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Cryptocurrencies are not IOUs. There's zero guarantee that their market value today will be there tomorrow.
Seriously, the parallel to baseball cards is not off. They're tokens that people trade in a semi-open market.
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No, it's a gambling token. Might be worthless tomorrow, depends how many suckers the casino can pull in.
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You can always tell when someone knew about Bitcoin when it was $1 but dismissed it. They're the ones yelling "it's not real!" the loudest, like the fox and the grapes.
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"Yes, police departments that run "speed traps" to pad their budget, I'm looking at you."
Being a "trap" is a good thing, the point is to "catch" people breaking the law who are putting others at a level of risk over the limit.
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:)
Thought I'd give it a whirl
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"A trap is designed specifically to get you. Quite often there will be a short 45 mph section in an otherwise 55 mph road. This is solely to nail you for speeding. It has no public safety purpose at all."
If what you say is true I'm glad I don't live where you are.
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"But plenty of states do have them."
Yeah, it's like the yellow traffic lights set dangerously short just to give out tickets. I was originally thinking of situations like when any use of radar guns by police are called speeding traps.
By the way, stupid modding, whoever down voted you.
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"Yes, police departments that run "speed traps" to pad their budget
What part of 'trap' was confusing? Contrived situations to justify citations is not the same as law enforcement.
A 55mph section of a 70mph road with the sign behind foliage is not law enforcement, it's $afety.
Also '"catch" people breaking the law' - what sort of naive moron thinks you need to be speeding to get a speeding citation? Do you live in sheltered burbs or are you lying?
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"what sort of naive moron thinks you need to be speeding to get a speeding citation? Do you live in sheltered burbs or are you lying?"
I'm not sure what you mean. Speeding tickets are given out when you are speeding over the speed limit. What are you saying?
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That depends how the trap it used - is it sited to maximise the public safety benefit, or the police revenue benefit?
A speed trap positioned on a suburban housing road might be good for public safety. You've got a long stretch of straight road that invites occasional speeding, but it's also next to housing and people are likely to try to cross the road. Children may be playing nearby. But the incidents of speeding, though dangerous, are also rare: This is not a good place to make money.
A bad speed trap woul
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"A bad speed trap would be positioned on a road that's far from any building, running through an expanse of empty land. Drivers will speed a lot there, because they don't feel any danger: It's got almost no-one around to hit, and excellent visibility. A great place for a speed trap!"
Maybe, personally I'm still going to follow the limit, or a bit higher. In Quebec we can get away with adding about 15% to the posted limit and never more than 20%.
"or if they suspect the traffic light timings have been delibera
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I agree it being appropriated directly into an agency is just begging for abuse, but for the US Treasury, 1.2 billion dollars is a fraction of a day worth of spending.
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Just require it be donated to the US Treasury into a special fund that can only be used to pay down the national debt. Sure, $1.2bn is a drop in the bucket, but it's still $1.2bn that doesn't have to come from we working stiffs who actually pay taxes.
There is NO such a thing as a speed trap (Score:2)
Banning cryptocurrency (Score:2)
I wonder what will happen when Bitcoin and its ilk are banned for being so troublesome.
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No, because no one gives a shit what you keep in your precious wallets. Hint: any cryptocurrency you keep in a wallet becomes irrelevant to the crypto "market".
if you want to enter that same market through an exchange though, expect to file IRS forms pretty soon.
Re: Banning cryptocurrency (Score:2)
No, because no one gives a shit what you keep in your precious wallets.
Businesses that take Bitcoin as payment do. They don't need to handle the cash. Heroin, for example. In Seattle you can become a very wealthy person by financing trafficking in the camps. You don't have to touch monry or the product. And you are assured of excellent police protection. Becsuse nonr of them are working the streets anymore.
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Businesses that take Bitcoin as payment do.
Very few do at face value. Most just convert your BTC to "real currency" on the spot.
They don't need to handle the cash. Heroin, for example. In Seattle you can become a very wealthy person by financing trafficking in the camps.
And it really doesn't make any difference if you never try to take that same BTC and go through an exchange; right until that point, you're just trading numbers. This is the reason why both the EU and the US are now pushing to de-anonymize exchange operations. They care about the interaction with real world markets.
This should not be difficult to understand. The dollar value of BTC is formed on the only market for these: ex
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No need. You just have to exclude bitcoin from the financial sector. Pass a law forbidding banks from doing business with any exchange. You can still pass your bitcoin around in the shadow economy, but that's all it'll be good for. No way to spend it on non-criminal things without doing business with very shady companies in equally shady countries.
Re: Banning cryptocurrency (Score:2)
The US can realistcally do two things, just sever all financial connections of American companies with exchanges.
If the US has/invents a casus belli they could sanction financial institutions internationally. Threaten to cut off from the US companies by connection to crypto by multiple degrees of seperation, to see how effective this threat is see Iran.
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> Banned where?
If only there was a way to find that answer [investopedia.com]. /s
Bitcoin is banned in China, Russia (use as payment for goods or services), Vietnam, Bolivia, Columbia, and Ecuador.
A problem with seizing a crypto currency wallet.. (Score:2)
..is that unless they transfer the currency to another wallet, there could exist other copies of the wallet out there.
As I understand it, a wallet is just a collection of the private keys used to transfer the currency elsewhere.
So a wallet can be copied (keep backups!).
A criminal could, even if his walled was seized, still use/transfer the cryptocurrency elsewhere as long as he has a copy of the wallet secret keys
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Indeed. However moves from and to a _known_ wallet are blatantly obvious on the blockchain. So the person that seized wallet belongs to may just have a tad of a problem there if there are any moves.
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Could do, but the government must be aware of this too, and I imagine will move all the seized currency to their own wallet at the earliest convenience.
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They can transfer from wallet to wallet before holding it (if exchanging later). They don't have to hide the activity. And the fee for the transfer comes out of the seized asset itself, so I doubt there's a problem there either.
Proceeds of crime (Score:2)
A house's value is only determined by the market, much like a crypto currency.
Auctions? (Score:1)
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You don't 'exchange' bitcoin for cash, you SELL bitcoin for cash. And the government has specified procedures for selling things. Bitcoin is not special.
In other news.... (Score:1)
And Now, IRS Needs Good Boitcoin Values? (Score:2)