IRS Seized $3.5 Billion in Crypto This Year, Expects Further Billions

19 November 2021, 11:00 GMT+0000
Updated by Leila Stein
19 November 2021, 11:08 GMT+0000
In Brief
  • The United States IRS seized cryptocurrency worth $3.5 billion during the fiscal year of 2021.
  • According to its latest criminal investigation report, this figure represents 93% of assets seized.
  • The tax collection agency expects to seize further billions in crypto from tax fraud and other crimes.
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The United States Internal Revenue Service (IRS) seized cryptocurrency worth $3.5 billion during the fiscal year of 2021.

According to the latest IRS criminal investigation report, this figure represents 93% of assets seized by tax enforcement over the past year.

The tax collection agency believes that it could seize further billions in crypto from tax fraud and other crimes over the coming year.

“I expect a trend of crypto seizures to continue as we move forward into fiscal year ‘22,” said IRS Criminal Investigation Chief Jim Lee. “We’re seeing crypto involved in a number of our crimes as we move forward.”

Crypto crimes

These cryptocurrencies were seized as a result of various crimes. These include tax and wire fraud, money laundering, and the distribution of illegal narctorics. This last one links to the $1 billion seized from the Silk Road.

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Embezzlement is also among them. This is the case of a former Microsoft Corp. software developer who funneled $10 million from the company using cryptocurrency.

This last case proved an interesting effort for the Criminal Investigation Unit. It required the utilization of technology to snoop out the guilty party.

As such, the division “has prioritized training and the deployment of cryptocurrency, blockchain and open-source intelligence (OSINT) technologies to unravel complex cyber-financial criminal schemes,” it said in the report.

Next year, an Advanced Collaboration & Data Center is also opening in Northern Virginia to advance those efforts further.

IRS empowered

President Joe Biden’s infrastructure bill, which he signed into law earlier this week, gives the IRS greater power to track cryptocurrency transactions.

Crypto brokers will be required to track and report their transactions to the IRS. This will provide tax authorities with greater visibility into virtual currency trades.

Democrats are looking to bolster the agency even more. They are proposing $80 billion in funding as part of Biden’s Build Back Better plan.

In addition, Lee enumerated the ways he could use the additional resources. He explains that he could hire up to 300 more special agents to additional investments in cybercrime detection.

Disclaimer

BeInCrypto has reached out to company or individual involved in the story to get an official statement about the recent developments, but it has yet to hear back.