According to the director of the IRS’s cybercrime unit, the agency confiscated $1.2 billion in cryptocurrency in 2021. That figure is astronomically higher than the prior years’ tally.
According to a report by CNBC, the U.S. government is sitting on a huge amount of bitcoins.
The report stated that the government has been increasing its scrutiny of cryptocurrencies and consequently confiscating more of them.
What you should know
Earlier this year, the IRS announced that it had seized $3.5 billion worth of crypto in the fiscal year of 2021.
The U.S. government has reportedly seized 170,000% more crypto this year than it did in 2019. Speaking to CNBC, Jarod Koopman, director of the Internal Revenue Service’s cybercrime unit, said, “In the 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.”
In the past, the government has auctioned bitcoins, typically at significantly low prices. It will sell $56 million in crypto-related to the BitConnect case in its next auction. On this occasion, however, the funds will be utilized to compensate victims of the tragedy.
The increase of crypto-related seizures is massive, but it’s not surprising.
In retrospect, in recent years, the crypto market has grown in popularity, and the value of assets has risen in tandem. That could explain why lawbreakers are increasingly using cryptography.
Furthermore, the U.S. government has only recently begun to investigate the crypto market for any weak spots. They are very keen on preventing the misuse of the asset class to finance criminal activities, and that is one of their top priorities. To that end, the IRS and other government agencies are all working on various initiatives.
US government on crypto
The IRS has been working hard to introduce crypto-related clarifications to the 1040 tax form. It is also working with Taxbit to ensure that traders report their numbers correctly.
Meanwhile, the US Securities and Exchange Commission is considering a wide framework to improve investor protection. They’ve made this point before, and they’re currently evaluating the numerous ETF applications. With the latter, some progress has been made, albeit no spot ETFs have yet been approved.