September 2023

Surge in IRS Crypto Seizures – Travis Thompson Comments

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In the Tax Notes article, “Surge in IRS Crypto Seizures Might Pose Market Challenge”, authors Nathan Richman and Alexander Rifaat discuss the significant increase in cryptocurrency seizures in recent years, with billions of dollars in digital assets being confiscated by the IRS annually. This surge in seizures has raised concerns about the potential impact on the cryptocurrency market.

The IRS has developed a careful system for tracking and managing seized cryptocurrency, involving secure storage in cold wallets and coordination with the U.S. Marshals Service for liquidation. Experts suggest that while a large sale by the government could briefly affect market volatility, the overall impact may be limited, and the government’s primary goal is to convert these assets into U.S. dollars rather than influencing the crypto market.

Travis Thompson, tax attorney at Sideman & Bancroft, comments: “The effect of a large cryptocurrency sale by CI would depend on investor confidence. The question is whether the large transaction could make the market seem even more volatile, he said.”

Read full article on taxnotes.com.

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