Can the U.S. Government Seize my Crypto?
While current attention is focused on whether cryptocurrencies are securities, investors should also appreciate the risks if their digital assets were mixed with the proceeds of criminal activity.
If you crack a rotten egg into a bowl of fresh ones, there’s no way to tell which eggs are rotten and which ones are not — that is the essence of fungibility.
And nowhere is fungibility a more understood concept than when it comes to money.
For all intents and purposes and at the risk of splitting hairs, money in its various forms, whether it’s cash or a bank deposit, is fungible — that means the law doesn’t distinguish between one dollar from another.
To be sure, cash money has serial numbers, and law enforcement routinely makes it a point to seize bills that have been involved in criminal activities, but outside of these exceptions, money is generally accepted as fungible.
And with fungibility comes vulnerability — a susceptibility to being seized by authorities, when deemed as having been used to facilitate the laundering of criminal proceeds.
Under U.S. law, money identified to have been the proceeds of criminal activity…
