U.S. government to replenish the budget in 2022 through cryptocurrency seizures

The U.S. Internal Revenue Service (IRS) plans to seize billions of dollars worth of cryptocurrency next year for offences. Bloomberg reports.

During the 2021 financial year the agency replenished the treasury from this line by $3.5 billion. This accounted for 93% of all assets seized in criminal investigations — in cases of online fraud, money laundering, drug trafficking and tax fraud.

The figure also includes seized 69 370 BTC in the Silk Road darknet marketplace case. The division also held to account a former Microsoft developer who used cryptocurrency to conceal $10 million misappropriated from the company.

“I expect this trend to continue in the next financial year. Cryptocurrencies are involved in an increasing number of crimes,” said IRS Criminal Investigation chief Jim Li.

The IRS Criminal Investigation Division has prioritised training and the rollout of technologies for analysing cryptocurrencies and blockchains to uncover complex cyber-financial crime schemes. To that end, in Northern Virginia in 2022 they will open the Center for Advanced Collaboration and Data Processing.

According to Li, the IRS could seek an additional $80 billion in funding to achieve these objectives.

As reported, President Joe Biden signed a $1.2 trillion infrastructure investment law. Depending on interpretation, miners and node operators on blockchains, wallet developers, liquidity providers in DeFi protocols may be required to report to the IRS about the activity of their users.

In September, ForkLog reported that the IRS funded the development of a tool for tracking cross-chain transactions.

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