Cryptocurrency law and regulation is still a developing thing. While some things about ownership are clear cut, there are others that tend to be unknown. If you have a large amount of funds allocated to virtual currency, a crypto attorney may be your best bet to protect it. So, can crypto currency be confiscated? The short and the long answer is always yes.
Business Related Funds
If your company offers stocks or crypto currency as part of an overall salary package, then there is a chance it can be confiscated when you’re terminated. In this situation, this is one of the few times where you’ll have a legitimate chance at legal recourse. Even in a situation where the business has a right to terminate, the employee has certain rights to whatever virtual currency is claimed that is attached to their salary. This has also been an issue for smaller businesses that pay their employees in virtual currency but charge a fee on top of the salary (withdrawals, transfers, exchange rate etc.).
Stock-trading apps like Robinhood that offer crypto trading are revolutionary in their design. In a single portfolio, you can manage stocks and crypto. The ease of use is great, but also opens the doors to some interesting confiscation rules. Like any virtual currency, crypto can be seized for several reasons like illegal activities, company collapse or even taxes. By including your crypto in the same portfolio as your stocks, there is a good chance your entire portfolio can be seized. Virtual currency can literally be a backdoor to gain legal access to your other finances, even if those other finances weren’t originally being seized.
When it comes to finances, divorce is always the trickiest to answer. The one thing that is undisputed is how all finances, including virtual, can be confiscated in a divorce. Virtual currency is one of the many things that have to be claimed under finances when going through a divorce. Hiding the value is no different than hiding real money, and there have been cases where virtual currency has been seized after a deep financial probe. If hidden virtual currency is confiscated that is attached to stocks, then it becomes twice of a headache.
Can Cops Seize Virtual Currency?
Yes, and it happens often. There are still USB drives and hard drives in lockup that contain cryptocurrency keys worth millions. This is also a good reason why it is never recommended to back up important virtual currency information on a shared or home computer. If cops seize a computer for any reason, there is a risk that your virtual currency will get swept up in the investigation. Getting locked out of your funds is never fun, and there is no guarantee you’ll get all of it back.
The big misconception about virtual currency is that it is untouchable. Although the laws are still developing around its regulation and usage, virtual currency is still just as vulnerable as physical money. Take the correct steps to protect it, and don’t depend on its ease of use as a security blanket.