The IRS Criminal Investigation division’s inconsistent adherence to crypto seizure protocols undermines due process and property rights. An evaluation covering December 2023 to January 2025 revealed agents sometimes confiscated digital assets without proper warrants or held them beyond legally mandated periods. These lapses violate the agency’s own guidelines for handling cryptocurrency as property under the Fourth Amendment.
Victims face arduous recovery processes, often requiring costly legal challenges to reclaim wrongfully seized assets. Such cases erode trust in law enforcement and deter mainstream crypto adoption, as users fear arbitrary asset forfeiture. The pattern also complicates ongoing regulatory efforts, providing ammunition for critics who argue blockchain technology invites governmental overreach.
These findings may spur congressional oversight or legislative reforms. Lawmakers could introduce stricter seizure accountability measures, such as real-time auditing of confiscated crypto wallets or independent review boards. For taxpayers, the report underscores the need for meticulous transaction records to contest improper seizures—a burden falling disproportionately on small holders lacking legal resources.
