Civil Asset Forfeiture & Cryptocurrency

https://www.youtube.com/watch?v=y4BeQKsJ5Hk&t=5s

Cryptocurrency attorney Adam S. Tracy discusses the process of civil asset forfeiture and the prevalence of forfeiture in the cryptocurrency space.

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A former competitive rugby player, serial entrepreneur and, trader attorney, Adam S. Tracy offers over 17 years of progressive legal and compliance experience in the areas of corporate, commodities, cryptocurrency, litigation, payments and securities law. Adam’s experience ranges from commodities trader for oil giant BP, initial public offerings, M&A, to initial coin offerings, having represented both startups to NASDAQ-listed entities. As an early Bitcoin adapter, Adam has promoted growth of cryptocurrency and offers a unique approach to representing crypto-clients. Based in Chicago, IL, Adam graduated from the University of Notre Dame with dual degrees in Finance and Computer Applications and would later obtain his J.D. and M.B.A. from DePaul University. Adam lives outside Chicago with his six animals, which is illegal where he lives.

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TRANSCRIPTION:

So civil asset forfeiture is sort of a hot button topic. And I don’t particularly have an opinion on it, but I did read an article that said that the government had seized over a billion in crypto assets under civil forfeiture laws. And it’s an interesting area of law, and it’s a very specific and nuanced area of law, but there’s three things to kind of consider. 1) Civil asset forfeiture cases are civil cases. So the government only needs to prove its case by the lower standard of preponderance of evidence, which means more likely than not. Whereas in a context of a criminal case, you have the Beyond A Reasonable Doubt. So more likely than not is 6 to 5, right, and Beyond Reasonable Doubt is 11 and up. Right? So you have that. 2) The burden is actually on the party from whom the party from whom the property was seized. It’s on you. What you have to show is, thirdly, that you did not know nor could have possibly have known that the property that was seized was related criminal activity. And so it’s an interesting, it’s an interesting pitfall, especially for exchange operators, right, or mixers or anything like that in the sense that others could use your crypto, right, your platform in criminal activity, and you could be subject to civil asset forfeiture proceedings. Which, again, the burden is on you, and the burden that the government must prove is actually very low, right? It’s the same as a car crash, for instance. It’s very low. It’s a very nuanced and sort of crazy area of law. But, again, it’s something to consider if you are operating, especially in an exchange, right? I think of an exchange because despite all the KYC and AML that you do in the world, you could be a platform for criminal activity, right, that you know, vigilant monitoring may not catch, right? It may not catch so, you know, and I wanted to do a quick piece on it, and I’m by no means the expert in these things, but think it bears a discussion and it bears some investigation, considering how prevalent it’s become in the cryptocurrency community. Right? And obviously there’s those who have nefarious intent and use cryptocurrency in nefarious means and, you know. And I think that casts a pitfall upon the whole industry rather unfairly because the overwhelming majority operators are above board. But, you know, it is it is something to be wary of as an operator because you could become roped up into these cases and being an innocent party, and the question becomes what you do? So if you have questions or you’re, you know, involved in a scenario, feel free to hit me up. I’m happy to answer any questions that you may have. I’m Adam Tracy. Check me out — TracyFirm.com — and I’ll talk to you soon.