• In 2021, the IRS seized $1.2 billion in cryptocurrency, nearly tenfold more than in 2020

  • This fiscal year, the Internal Revenue Service (IRS) of the United States seized over $1.2 billion in cryptocurrencies. According to Jarod Koopman, Director of the IRS’ cybercrime unit, it has increased from $137 million in 2020 — a nearly tenfold increase from last year.

    “In the fiscal year 2019, we had approximately $700,000 in crypto seizures. It had risen to $137 million by 2020. And we’re up to $1.2 billion so far in 2021,”

    The US government has previously sold seized cryptocurrency, most notably when it shut down the dark web marketplace Silk Road. These cryptocurrencies are often sold in auctions alongside other types of assets, such as expensive cars and boats.

    The IRS is one of many government agencies that are devoting significant resources to cryptocurrency. It has previously collaborated with companies to strengthen its oversight of the crypto market, including a $625,000 grant to Chainalysis to break the privacy-preserving transactions of Monero. The agency has also requested a $32 million budget to assist in dealing with the crypto market.

    As authorities attempt to crack down on the use of cryptocurrencies for illicit purposes, cybercrime has become a hot topic in the wider world and the crypto space. The Colonial Pipeline infrastructure attack was by far the most publicized of these incidents this year, sparking a multi-organizational response to the issue.

    The United States is increasing its scrutiny of cryptocurrency markets.

    Authorities are currently determining how to impose practical regulations. Because of its decentralized nature, the cryptocurrency market can be difficult to regulate. However, various government agencies have been making progress toward effective measures.

    The IRS clarified a question about cryptocurrencies in its 1040 tax return form, providing some relief to taxpayers. Several blockchain companies are also designing and developing tax reporting tools to make it easier for retail investors.

    The new infrastructure bill will also offset some of those costs by enforcing crypto taxation. Senator Pat Toomey, who promised to offer an amended version later, criticized the bill’s wording. These indications point to the impending establishment of a regulatory framework by the United States government, which will include specific taxation guidelines.

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