If the current plan by the DOJ sails through, Bitcoin owners caught in the legal net could end up losing their entire crypto stash.
The US Treasury has always maintained a cap of $500k for administrative forfeitures. That has always been the rule extending across board and applies both to normal cases as well as those involving cryptocurrencies. Cryptos were included in the rule by a 2021 amendment to the definition of “monetary instruments” that sough to encompass all “substitutes for any monetary instrument.” This, of course, was left to the powers of the Secretary of the Treasury to direct as such. On its official website, the Treasury has a section covering digital assets.
However, the DOJ wants to change that now. In a recent communication to the US Treasury, the DOJ has requested for a review of this rule to exclude Bitcoin and other cryptos from benefiting from the $500k cap. The DOJ wants Treasury to declare that cases involving crypto holders will lead to the confiscation of all cryptos/ BTC held by the accused.
“Do it or else”
Interestingly, the DOJ seems determined to see this through. The letter to the Treasury reads as a subtle signal that the DOJ is not ready to welcome a negative answer. Rather, the letter goes on to suggest to the Treasury to initiate a formal review of the said rule to exclude Bitcoin and cryptos from the cap if the Secretary of Treasury can’t declare it personally.
In essence, such a review to the amendment would achieve the results as desired by the DOJ. It will be interesting to see how the Treasury responds to this strong push.
Why is Bitcoin targeted?
There’s no denying that Bitcoin has grown so much as to be seen as a threat by the mainstream financial system and governments. That’s because cryptos are largely free of government interference and can provide quick liquidity across borders at very low costs. This has angered banks that have always charged exorbitant transfer fees and are very slow in processing transactions. Even the IMF has admitted that it is scared of Bitcoin and its growing influence.
However, the more interesting part is that the authorities seek the destruction of the crypto space while showing growing interest in developing national blockchain-based CBDCs. Various governments have already set up developer teams for their CBDC projects.
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