IRS Crypto Seizure Practices May Have Fallen Short of Guidelines in Handling Bitcoin Assets, Report Suggests

Key Points

1. A US Treasury Inspector General report found IRS-CI personnel did not consistently follow mandated guidelines for cryptocurrency seizures between December 2023 and January 2025.

2. The report recommends comprehensive training for IRS-CI staff to ensure compliance with seizure protocols and improve tracking of seized assets.

3. The IRS's current shortcomings in managing seized cryptocurrencies could undermine national digital asset reserves and operational transparency.

4. As of March 2025, the US government holds approximately 200,000 Bitcoin, valued at over $21 billion, largely from high-profile criminal seizures.

5. The report emphasizes the need for enhanced communication and regulatory frameworks to improve accountability in cryptocurrency seizure practices.