Seizures of Bitcoin for Forfeiture
What happens when a government agency seizes bitcoin for forfeiture? The type of property seized might include Bitcoin (BTC), Bitcoin Cash (BCH), Bitcoin SV (BSV), or Bitcoin Gold (BTG).
The government might allege that tumblers were used to launder criminal proceeds. By using tumblers, the owners of bitcoin are able to process transactions in a manner designed to frustrate the tracking of individual transactions through the Blockchain.
Other types of cryptocurrencies that might be seized include Ethereum, Ethereum Classic, Litecoin, or Tezos.
After the seizure, an Assistant United States Attorney will file a “Complaint for Forfeiture” in the appropriate United States District Court. The judicial forfeiture action might be authorized by 18 U.S.C. §§ 981(a)(1)(A), 981(a)(1)(C), 981(b), or 21 U.S.C. § 881(a)(6).
The complaint for forfeiture might allege that the property constitutes, or was derived from criminal activity, including drug trafficking or the sale of narcotics, money laundering, computer hacking, or a conspiracy to commit those crimes.
Title 18, United States Code, Section 981(a)(1)(A) provides for civil and criminal forfeiture of any property, real or personal, involved in a transaction or attempted transaction in violation of Title 18, United States Code, Sections 1956, 1957, or 1960, and any property traceable to such property.
Title 18, United States Code, Section 981(a)(1)(C) provides for the civil forfeiture of any property, real or personal, which constitutes or is derived from proceeds traceable to any offense constituting a “specified unlawful activity” or a conspiracy to commit such offense.
Title 21, United States Code, Section 881(a)(6) provides for the forfeiture of all moneys, negotiable instruments, securities, or other things of value furnished or intended to be furnished by any person in exchange for a controlled substance or listed chemical, all proceeds traceable to such an
exchange and all money used or intended to be used to facilitate any violation of Subchapter I, Chapter 13, Subchapter I of Title 21 United States Code.
If the government believes that your property represents the proceeds traceable to criminal activity, then it might be seized and subject to forfeiture proceedings pursuant to 18 U.S.C. § 981(a)(l)(C). Most civil asset forfeiture cases involve property believed to be connected to drug trafficking or money laundering which is subject to civil asset forfeiture pursuant to 21 U.S.C. § 881(a)(6).
Even funds that did not originate as proceeds from the illegal activities might be considered to be involved in money laundering activities in violation of 18 U.S.C. § 1956 if the property is commingled with or used to conceal and disguise the nature, location, source, ownership, or control of the criminal proceeds, or were involved in a conspiracy to launder such proceeds. Such property is subject to civil asset forfeiture pursuant to 18 U.S.C. §§ 981(a)(l)(A) and 981(b).
After the complaint is filed, notice is given to all interested parties to appear and show cause why the judgment of forfeiture should not be entered.
Attorneys for the Seizure of Cryptocurrency for Forfeiture
The attorneys at Sammis Law Firm represents clients in cryptocurrency seizures for forfeiture, including the seizure of bitcoin.