In a much-anticipated move that has crypto investors up in arms, former President Donald Trump has proposed the creation of a national Bitcoin stockpile if he is elected back to the White House again in November 2024.
Trump’s Plan For National Bitcoin Reserve Faces Backlash
At the Bitcoin 2024 conference on July 27, Trump announced his intention to create a centralized repository for all Bitcoin held or acquired by the US government, which he envisions as a long-term national asset for the benefit of all Americans.
This proposal, however, has raised red flags among former prosecutors and legal professionals, who argue that Trump’s plan could potentially divert seized digital assets away from their intended purpose of compensating victims of crime.
According to a Bloomberg report, under current US forfeiture laws, seized assets, including Bitcoin, are typically liquidated to repay victims and support law enforcement efforts.
Nevertheless, the report notes that the former President’s pledge to retain the government’s Bitcoin or other cryptocurrency holdings directly challenges this fundamental tenet of asset forfeiture.
Amanda Wick, a former federal prosecutor and principal at Incite Consulting, voiced concerns over the implications of Trump’s strategy, highlighting that a significant portion of the seized crypto likely belongs to victims of cybercrimes such as hacks, ransomware attacks, and scams.
Emphasizing the importance of restitution for victims, Amanda Wick criticized prioritizing a Bitcoin stockpile over the “rightful compensation” of those affected by criminal activities in the industry.
Legal Experts Slam Trump’s Bid
The US currently holds approximately $12 billion worth of various cryptocurrencies, including Bitcoin (203,230), Ethereum (50,224), and over $12 million of Tether’s USDT stablecoin, stemming from criminal and civil forfeiture cases overseen by federal prosecutors and US judges.
“The primary objective of asset forfeiture is to deter and punish criminal activity by depriving criminals of property used or acquired through illegal conduct,” former Department of Justice (DOJ) prosecutor Elizabeth Boison told Bloomberg. “Trump’s proposal is not consistent with the purpose of asset forfeiture or with what the law currently allows.”
In the meantime, Trump’s crypto and Bitcoin-friendly pivot is reportedly being viewed with “deep skepticism” by legal experts.
According to Bloomberg, these experts see Trump’s strategy as a “ploy” to curry favor with the digital asset community. As former prosecutor Laurel Loomis Rimon bluntly said to Bloomberg, “It doesn’t make a lot of sense” from a policy standpoint.
At the time of writing, BTC has managed to consolidate above key support walls at $56,800. This represents a slight difference from Tuesday’s price with a record 0.8% gain, but healthy overall after a quick bounce from $49,000 on Monday.
Featured image from DALL-E, chart from TradingView.com