Manage episode 300411863 series 1107025
The IRS Has Been Selling Bitcoin - Pay Up!
Bitcoin is all the rage. In fact, many people have considered investing in these cryptocurrencies or something. Of course, many have invested in it. I played around with them about a decade ago, and the IRS seized 1.2 billion worth of it.
You might remember, we talked years ago about the IRS trying to tax things in the virtual world. So if you were in one of these real-life-type things and you owned property, as it were inside this virtual world, they wanted to tax it. So, of course, if you sold something with real hard money and. You sold it inside that real world with real hard cash, you would end up having to pay taxes.
[00:00:43] Just if you sold a hammer to someone, that's the way it works. A lot of people have decided that, for some reason, cryptocurrency is entirely untracked. Now we know about cases. I've talked about them here where some of these coins, in this particular case, are talking about Bitcoin or have been used online.
[00:01:11] And in fact, the government has found out who was using it and really stepped in, in a big way. Silk Road is the most significant example. This was an online black market for everything you can think of, from illegal drugs to firearms, to all kinds of illicit commodities for sale online.
[00:01:36] Back in 2013, they used Bitcoin to buy and sell things in this free trade zone. I think they called themselves, and Silk Road was just thriving. But then, on comes the federal government and federal agents in the United States really cut their teeth in crypto search and seizure. With taking down the silk road, you might remember this was very unprecedented.
[00:02:06] People had no idea. What they could do. How could the federal government monitor this? Can I buy and sell these Bitcoins? All of that sort of thing. And 20 years as the chief of money laundering and asset forfeiture. Yeah, us attorney's office for the Southern District of New York. Sharon Levin said that this whole takedown or silk road was utterly unprecedented, and it was new technology.
[00:02:37] What do you do well because of people. Here cryptocurrency and crypto, of course, being short for cryptography, they figure that okay. While obviously, it is absolutely untraceable, untrackable. Tell that to the people that this year has tried to ransom money out of enough. US corporations, some of the major -- consider Colonial Pipeline and what happened with them and how at least half of their cryptocurrency was returned to them.
[00:03:11] So don't think that this stuff is a way that you can get away with breaking in the law or not paying taxes. It is not the whole. Business, if you will, of crypto seizure and sale is growing incredibly fast. In fact, the federal government just enlisted the help of the private sector to manage and store these crypto tokens that have been seized.
[00:03:43] Now, I mentioned that the IRS has seized about $1.2 billion worth of cryptocurrency this fiscal year. That is a whole lot of cryptocurrency. And what are they doing with it while it's the same thing? Remember the drug dealers back in the day. Miami, what was happening? I used to love the Miami Vice TV show. What happened there while they seized boats, they confiscated cars.
[00:04:09] They seized cash. Obviously, they can just be put back into circulation, but what do they do everything else? Cores, they go ahead, and they sell it at auction. And that's what they've been doing. Then in June, they started auctioning off Litecoin and Bitcoin cash. They had 11 different lots on offer.
[00:04:34] It was a four-day auction, and it included 150.2, 2 5 6 7 1 5 3 Litecoin. You like that. Remember, cryptocurrency is not necessarily a whole coin. It's like having a gold coin. That's worth 500 bucks. How are you going to use that to buy a loaf? But what happens with these cryptocurrencies is you can buy and sell fractions of a coin.
[00:05:00] So that's why you get into the millions of a piece of a coin. So they sold 150 ish Litecoin and about 0.00022 in Bitcoin cash worth more than 21 grand. So that's one of the 11 lots that were out there. And this crypto property is what they're calling. It had been confiscated as part of a tax noncompliance case.
[00:05:30] I'm looking right now at the public auction sale notice. And where it was, where you could go online. It was on https://gsaauctions.gov. Suppose you want to check these things out, as in the general services administration. In that case, auctions.gov, GSA, auctions.gov, and they were selling it, and it was a taxpayer, it tells you all kinds of information about them.
[00:05:52] It's a. Crazy here, but you have to pay by cash to certified cashiers or treasures check drawn on different banks. And it's really cool to look at some of these things, but you can find them online. So if you're interested in buying them might be an excellent way to buy them, these various cryptocurrencies if you want to get into them.
[00:06:15] But a lot can refer to almost anything could be, as I said, boats or cars like it was on Miami vice. It could be some number of crypto coins that are being auctioned. So they're going to be doing more and more of that. So then, apparently, the feds are saying that they have no plans to step back from being basically a crypto broker.
[00:06:41] Here is the bottom line here because they're seizing and selling all of these assets. So keep an eye out for that. Remember what is going on? The silk road site that I mentioned had been shut down or operating on the dark web. It used Bitcoin exclusively nowadays are using various types of coins.
[00:07:04] Most of them are ultimately traceable, and we're not going to get into all of the details behind it, but the bottom line is, so what do they do now? Think about this. Silk road had 30,000 Bitcoin that they were able to identify in CS. And it was probably the most significant Bitcoin seizure ever. And it sold for about $19 million.
[00:07:32] So that was quite a few years ago. Somebody just pulls up a calculator here, say 30,000 times, and what's Bitcoin nowadays. I'm not quite sure. Let's say it's $15,000. So in today's money, it had half a billion dollars. Today's value, a half, a billion dollars worth of Bitcoin in there isn't that something, and that was all seized, and it was all auctioned off.
[00:07:58] So keep an eye on that. They're following the money is the technique they're using. You can find out a lot more at us, marshals.gov, and that is how they found it. If you've got pictures. You're going to have to sell it. You're going to have to transfer. You have to do something with it. And that's where they're getting.
[00:08:19] Bottom line, particularly if you take the Bitcoin and turn it into something else, but this would take a while to explain. And I was thrilled to be able to sit in on a presentation done by the treasury department on how they handle all of this. It's frankly very fascinating. So, hey, make sure you spend a couple of minutes and join me online.
[00:08:44] Craig peterson.com. You can sign up for my newsletter. You can listen to my podcasts, and you can get some free, special reports just for signing up.