Former Prosecutor: Trump's U.S. Bitcoin Reserve Program Is Illegal, Sale of Seized Assets Should Be Used to Compensate Victims

Donald Trump's campaign promise to use U.S. government-held cryptocurrencies to build a national bitcoin reserve has raised concerns among former prosecutors who say the move would divert seized digital assets that could otherwise be used to reimburse victims of crime, Bloomberg reports. Experts say Trump's “never sell bitcoin” philosophy violates a core principle of U.S. forfeiture law: the government sells seized assets to reimburse crime victims and support law enforcement.

Amanda Wick, a former federal prosecutor and principal of Incite Consulting, said, “Much of this ‘reserve’ probably belongs to victims of hacking, ransomware, and fraud, and the money should be returned to the victims. If they knew this, I'm sure the crypto community wouldn't be saying you should cheat your victims to hoard bitcoin.”

Elizabeth Boison, a former federal prosecutor in charge of forfeiture at the Department of Justice, said the proposed Bitcoin stockpile is not in line with current law.Boison said, “The primary purpose of asset forfeiture is to deter and penalize criminal activity by depriving criminals of property that they use or have acquired through unlawful acts.” She added that Trump's proposal “is inconsistent with the purpose of asset forfeiture and with the law's current allowance for asset forfeiture.”

Laurel Loomis Rimon, another former federal prosecutor, added that the U.S. government can only recover assets after obtaining a final forfeiture order from a judge. She said the government is not using the assets to make money, as Trump has claimed. rimon said, “I think he's trying to win over the cryptocurrency industry, which doesn't make a lot of sense.”