Lawmakers in Luxembourg have been discussing issues pertaining to the volatile ups and downs in seized digital assets. In contrast to seized fiat assets, cryptocurrencies can see massive changes in value which makes managing these funds tricky.
Currently, Luxembourg is in the second year of working out just how exactly the crypto laws in the country will operate with the management of seizures a big topic. Problems arise when assets are seized and waiting for a decision on whether or not they can be confiscated. This can cause a situation where the money seized is worth far less when it is eventually returned or confiscated. As with other confiscated finds in most of the EU, Luxembourg uses it for public interest or social purposes as per the European Commission.
The very same commission has been critical of Luxembourg in the past for slow-rolling a 2014 EU directive that would bring the entire group into an agreement on how and when illegal proceeds are taken from the accused.
Crypto legislation talks ongoing
Discussions were had on Sept 6 to help clarify what the government’s responsibility is to “preserve confiscated assets.” The talks must weigh out the risks of allowing victims to suffer or moving faster to seize, confiscate and use transfer the funds. The lawmakers used examples of the price of bitcoin fluctuating by more than 30% in 24 hours to make their case. Officials want to ensure that they don’t lose huge percentages of seized money before it can be properly confiscated. Also, if the money is eventually returned, what are the ethical ramifications of seizing one amount and returning another?
The country says it is planning to create a new government asset management office that will handle these and other issues. The group will be in charge of preserving the value of seized assets by converting them into Euros as quickly as possible. Some in the government are concerned that they could be held responsible for losses suffered by individuals whose assets are restored at a lower value than they had when seized.
Ministry lawyers told lawmakers during the meeting that “In the case of cryptocurrencies, given the high volatility of prices, the state is not able to ensure the preservation of their value.”
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.