In terms of law and crime, cryptocurrency is still a controversial asset. In this fiscal year alone, the U.S. Internal Revenue Service seized $1.2 billion worth of cryptocurrency. The U.S. government began to confiscate crypto assets during the closure of the Silk Road in 2013. So far, every year, individuals have confiscated encrypted assets.
The public is usually unaware of the condition of the seized assets. Once seized, the government has the right to dispose or store these assets in the best way it thinks. Over the years, the IRS alone has seized large amounts of funds. Since the popularity of cryptocurrencies, these assets have been worth billions of dollars.
Related Reading | Wells Fargo now offers customers cryptocurrency investments
These assets are usually obtained in search and seizure operations carried out by federal agents. At this point, the assets seem to disappear under the jurisdiction of the government. For this reason, this CNBC Report Learn more about what will happen to these seized assets with current and federal agents.
Confiscated crypto assets are auctioned
Jarod Koopman, director of the Cybercrime Division of the IRS, said the seized assets will be auctioned. It doesn’t matter whether it is cryptocurrency, ships or cars. These auctions are usually conducted after the criminal investigation is over.
Related Reading | How much is your love worth?Polish influencer sells “Love” as NFT
Auctions like this are not new to the government. Auctions have been conducted for many years to promote the sale of seized assets in government wallets.
An example of these auctions is 11 lots The cryptocurrency to be bid on in a four-day auction this year. one of them, Lot number 4TQSCI21402001, There are 150.22567153 Bitcoin and 0.00022893 Bitcoin Cash. At today’s prices, the value of these assets will exceed $21,000.
Total crypto market cap continues to hold steady | Source: Crypto Total Market Cap from TradingView.com
Considering the amount of government confiscated each year, auctions like this happen every year. Some of the seized quantities may have been recovered from criminals. Others may be detained as part of tax non-compliance cases.
The bust that started it all
Although Bitcoin was born in 2009, it was not until 2013 that crypto assets began to be seized. Silk road. An online black market where users can buy almost anything. From hard drugs such as cocaine to the arms trade.
After the Silk Road was cancelled, the federal government confiscated tens of thousands of bitcoins. The government does not know what to do with these coins. A seized wallet holds up to 30,000 bitcoins.
After that, the government had to figure out how to dispose of these assets after the investigation was over. At that time there was no public exchange to sell coins. Therefore, the bailiff department had to figure out a way to get rid of these assets. This gave birth to the first crypto asset auction.
The 30,000 bitcoins recovered from a wallet were sold to billionaire Tim Draper at an auction. Bitcoins were sold at a price of 19 million U.S. dollars in 2014, when each Bitcoin was worth about 600 U.S. dollars.
According to current market prices, a large number of Tim Draper’s coins, if retained to this day, would be worth more than $1 billion. It showed huge returns in just six years after purchasing the coin.
Related Reading | Analysts say Bitcoin is more oversold than ATH in April
The assets seized by the government will undoubtedly continue to be auctioned to the highest bidder. Even though the coins may be more valuable in the future, the United States does not participate in the cryptocurrency market. Therefore, the seized assets will continue to be sold at auctions.
Featured image from CIO.com, chart from TradingView.com