Seizure for Forfeiture of Cryptocurrency from a Binance Account (2024)

FAQs

Seizure for Forfeiture of Cryptocurrency from a Binance Account? ›

Some of the funds were traced to two Binance accounts and the cryptocurrency was seized in January 2024. The investigation revealed that the accounts from which the cryptocurrency was seized had been associated with funds from 36 other victims of fraud located across the United States.

In addition, officers will be able to transfer illicit cryptoassets into an electronic wallet, which is controlled by law enforcement, stopping criminals from gaining access it. Police will be able to destroy a crypto asset if returning it to circulation “is not conducive to the public good”.

Criminal Forfeiture

Bitcoin can also be taken by the government through a process called forfeiture. Forfeiture is the permanent loss of that bitcoin by way of court order or judgment. Seizure may occur before forfeiture and not all seizures will result in forfeiture.

Government and law enforcement agencies can use this system to submit information requests. Binance will review each case and cooperate on a case-by-case basis to disclose information as legally required, in accordance with our Terms of Use and applicable laws.

Administrative forfeiture

Many federal law enforcement agencies are authorized to forfeit assets via an administrative procedure. In practice, this means that an agency seizes the asset, provides notice to potential claimants, and processes any claims made to the asset.

But what happens when authorities seize crypto? After seizing the ill-gotten cryptocurrencies, authorities have to secure and then liquidate them. However, a court order is usually required to do this, and as you can imagine, that can take years to arrive in some cases.

Once seized, it can take years for authorities to secure a forfeiture order letting them sell crypto and return the proceeds to crime victims or governments.

Note: Binance will never permanently freeze or block your funds due to a potential risk of scams. Instead, our policy is to give you sufficient time to make well-informed decisions. You can withdraw your funds at any time once you verify the transaction poses zero risk.

According to the site, the FBI seized millions of dollars in cryptocurrency, the majority of which was in ETH and Ethereum-based Layer 2 assets and stablecoins.

So the short answer to the question, does the IRS know about your crypto? Is yes. If they don't, the risk is simply too high that they will eventually find out so it's better to report the taxes now.

Does the IRS track Binance? ›

Attempting to hide cryptocurrency from the IRS is illegal and can result in serious penalties, including fines and imprisonment. Exchanges such as Coinbase, Binance.US, and Crypto.com report customer data to the IRS, while many international exchanges like KuCoin, OKX, and Bitget might not.

Yes, it is entirely safe to trade in cryptocurrencies with Binance or any other exchanges out there.

Does Binance US Report to the IRS? Yes, Binance US is required to report cryptocurrency transactions that reach a certain threshold to the IRS. The IRS is working to enforce compliance and accurate reporting of cryptocurrency-related income and transactions.

Officers will also be able to transfer the crypto into a wallet controlled by law enforcement agencies. They will be able to destroy crypto assets "if returning it to circulation is not conducive to the public good."

Due to the irreversible nature of cryptocurrency protocols, transactions can't be cancelled or reversed once initiated.

Hire a Cryptohunter

Cryptohunters work with both cryptocurrency holders and law enforcement agencies to search for and recover misplaced, inaccessible or stolen cryptocurrencies. They use specialized software to generate millions of potential passwords, and tend to charge a flat fee.

Crypto liquidations refer to the process of converting assets, such as leveraged positions or collateral, into cash. This conversion is usually triggered by unfavorable market movements, where the assets' value drops significantly.

In most cases, cryptocurrency laundering entails either a) sending cryptocurrency to a high-risk or unregulated crypto-to-fiat exchange, or b) using fraudulent or stolen identity documents to do the same at a regulated exchange.

One of the most widespread ways to steal cryptocurrency is through phishing (identity theft), a technique also used for traditional bank accounts. Hackers send an e-mail posing as our exchange platform and request our personal data. If we surrender this data, we can consider our cryptocurrency lost.