Will American Tax Watchdog Auction the $1.2B in Crypto Seizures it has Made this Year?

A recently published report by CNBC highlighted that the United States tax watchdog, the Internal Revenue Service (IRS) has seized over $1.2 billion worth of cryptocurrency thus far this year. In its usual manner, the U.S. government held its most recent public sale of digital assets in June 2021, where they auctioned off some Bitcoin (BTC), Litecoin (LTC), and Bitcoin Cash (BCH) cryptocurrencies respectively.

The American government has regularly organized digital asset auctions since the Silk Road takedown in 2014. Reportedly, the authorities have been accumulating and selling cryptocurrencies including Bitcoin and altcoins confiscated from tax evaders and high-profile criminal sting operations. This trend has suggested the IRS may also give up the $1.2 billion worth of crypto assets to public auctions.

The most recent seizure was performed in June 2021 which was also accompanied by the auctioning of the Bitcoin and accompanying assets by the IRS. 

According to Jarod Koopman, the director of Cyber Crime at IRS, roughly $700,000 worth of crypto seizures were performed in 2019. But, as the crypto adoption grew in America the confiscation amount also soared significantly to $137 Million in 2020. However, in the fiscal year 2021, the seizure number has topped the list with an all-time high of $1.2 billion, which is not amusing at all!

Government’s Take On The Silk Road Scam, And Where Does The Confiscated Money Go

The very popular darknet marketplace, Silk Road dealt entirely in Bitcoin at the time of its existence. However, it was taken down by government authorities in late 2013. During its seizure, authorities identified a Bitcoin wallet that possessed 30,000 BTC; and in an attempt to decompose the wallet the authorities had put the confiscation for auction where they sold it for $19 million. 

Since the Silk Road takedown, the government has successfully established a workflow that remains in place even at present. The IRS seizes and sells the confiscated assets via auction. However, skeptics still doubt if authorities fill up their pockets with the seizures. 

“This is the kind of thing really captures the attention of people, and carries a lot of gossips around it.”

As the crypto marketplace has evolved massively in such a short time span, the scams and money laundering incidents have also significantly increased. However, America is making constant efforts to regulate the crypto space and protect investors, says the SEC chief. Moreso, Koopman’s squad of IRS deputies also seem to be great law enforcement officers who execute search, arrest, and seizure warrants in the country.

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