WHAT'S HAPPENS TO SEIZED CRYPTOCURRENCY
Seized cryptocurrency typically goes through the following process:
1. Identification and freezing: Law enforcement agencies identify and freeze cryptocurrency assets linked to illegal activities, such as money laundering, fraud, or other crimes.
2. Wallet transfer: The seized cryptocurrency is transferred to a secure wallet controlled by the seizing authority.
3. Storage and management: The cryptocurrency is stored in a secure environment to prevent theft or loss.
4. Auction or sale: Once legal proceedings conclude, seized cryptocurrency may be sold or auctioned off.
5. Distribution of funds: Proceeds from the sale are typically used to:
- Compensate victims
- Cover investigative and legal costs
- Support government programs or initiatives
Notable examples include:
- 2020: US authorities seized $1 billion in Bitcoin linked to Silk Road.
- 2022: DOJ seized $3.6 billion in Bitcoin and arrested couple for laundering funds tied to 2016 Bitfinex hack.
The process varies depending on jurisdiction and specific laws.