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August 5, 2021 01:25 am

The IRS Has Seized $1.2 Billion Worth of Cryptocurrency This Fiscal Year

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.[...]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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