Seizure of Bitcoin for Civil Asset Forfeiture
The U.S. Department of Justice recently launched the Digital Asset Coordinators Network, a network of 150 federal law enforcement officials tasked with coordinating crypto-related investigations and prosecutions across the country. The network will also work with Assistant United States Attorneys (AUSAs) to seize cryptocurrencies and other valuable property for civil asset forfeiture actions.
Seizures might occur if an account is linked with funds stolen in a scam. Additionally, a greater focus might be placed on seizing assets from traders of cryptocurrencies under the theory that they are engaged in unlicensed money-transmitting businesses. See United States v. 50.44 Bitcoins, Case No. CV ELH-15-3692, 2016 WL 3049166, at *1 & n.1 (D. Md. May 31, 2016).
What happens when the federal government or a state government agency seizes Bitcoin or another cryptocurrency for forfeiture? In addition to Bitcoin, other cryptocurrencies include Bitcoin Cash (BCH), Bitcoin Cash ZCash, Bitcoin SV (BSV), or Bitcoin Gold (BTG), other types of cryptocurrencies that might be seized during criminal or civil asset forfeiture proceedings include Ethereum, Ethereum Classic, Ripple, Monero, Litecoin, or Tezos.
After the seizure of funds that belong to you, retain an experienced civil asset forfeiture attorney to file a verified claim for court action. When the verified claim is filed with the agency that seized the cryptocurrencies, the government has a 90-day deadline to either return the cryptocurrency or file a complaint for forfeiture in the appropriate United States District Court.
If an Assistant United States Attorney files a “Complaint for Forfeiture” in the district court, the complaint might allege that the property constitutes, or was derived from criminal activity, including wire fraud, cybercrimes, computer hacking, drug trafficking, the sale of narcotics, money laundering, or a conspiracy to commit any of those crimes. 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.
Your attorney can then file the judicial claim in the district court, along with an answer, counterclaim, and motion to dismiss the government’s complaint. If you substantially prevail in court, the CAFRA statute requires the Court to order the government to pay your reasonable attorney fees if the appropriate request is filed.
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Attorneys for the Seizure of Bitcoin for Civil Asset Forfeiture
Forfeiture attorney Sebastian Rucci represents clients in cryptocurrency seizures for civil asset forfeiture, including the seizure of Bitcoin (BTC), Bitcoin Cash (BCH), Bitcoin SV (BSV), Bitcoin Gold (BTG), Ethereum, Ethereum Classic, Litecoin, or Tezos.
Whether the cryptocurrency was seized by federal agents from your computer wallet, mobile wallet, online wallet, or cold storage account, forfeiture attorney Sebastian Rucci can help.
If you received a notice of the seizure then you must act quickly. An experienced asset forfeiture attorney to help you prepare and file a verified claim to contest the seizure for forfeiture. Your attorney can negotiate with the AUSA for the return of the cryptocurrency seized. Forfeiture attorneys Sebastian Rucci can file an answer, counterclaim, and motion to dismiss the complaint.
Statutes that Authorize Judicial Forfeiture of Cryptocurrencies
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)(1)(C) or a related provision. In civil asset forfeiture cases under 21 U.S.C. § 881(a)(6), the government alleges the cryptocurrency is connected to cybercrimes, cyber-scams, drug trafficking, or money laundering.
Even if the funds did not start out as the proceeds of any illegal activity, they 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.
Cryptocurrency seizures are subject to civil asset forfeiture pursuant to 18 U.S.C. §§ 981(a)(l)(A) and 981(b). Therefore, 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). 18 U.S.C. §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. 18 U.S.C. §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 an offense. 18 U.S.C. §881(a)(6) provides for the forfeiture of all money, 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 t…