Carrying more than $10,000 in Bitcoin can be confiscated? New US Congressional bill angers the public

Last month, some U.S. lawmakers proposed the “Fighting Money Laundering, Terrorist Financing, and Counterfeiting Act of 2017,” which, if passed, would mean a range of digital currency services would come under scrutiny by U.S. federal law enforcement agencies, including those that mix coins.

However, the rule, which has also drawn the ire of cryptocurrency advocates, would require customs officials to notify authorities if someone attempts to carry more than $10,000 worth of bitcoin across a U.S. border.

Such requirements already apply to payment methods such as cash, but rising public awareness of digital currencies such as Bitcoin, coupled with policymakers' concerns that they could be used to finance terrorism, has led lawmakers to consider the bill.

One observer, Joe Ciccolo of Canadian firm BitAML, said cryptocurrencies have become “the new face of an old debate,” going on to say that policymakers and law enforcement officials have been seeking to expand the definition of “monetary policy tools.”

Ciccolo told reporters:

“A few years ago, we saw lawmakers push for ‘prepaid access’ to include gift cards, and even law enforcement using card readers to scan prepaid access devices to access border crossers’ balances. Now that digital currencies have gained traction, they are being included in the same conversation. As in the past, I suspect there will be strong opposition from the financial services community.”

Perianne Boring, president of the Chamber of Digital Commerce, a blockchain trade advocacy group, said the bill is not necessary because digital currency exchange services already require FinCEN to register as money transmitters and follow federal reporting requirements.

“While we encourage thoughtful and meaningful research into preventing cross-border financial crime, the storage of virtual currencies is different and more complex than pre-paid access payment methods,” she told reporters.

Confiscation of assets

Over the past week, many people have expressed anger on social media about the new regulations.

One of the issues of concern is a policy called "property confiscation." In the United States, law enforcement officials have faced strong opposition to these provisions, which allow law enforcement officers to seize property, especially cash, from citizens if they are suspected of criminal activity. Supporters believe that this provision can prevent money laundering and provide a means of funding American police forces.

Under the bill, cryptocurrencies would also be included in the definition, giving customs officers the power to seize funds suspected of criminal activity.

In recent years, this practice has caused dissatisfaction among some people. Many innocent people have had their funds confiscated. If they want to get the funds back, they may need to go through legal procedures that can last for several months.

In 2015, an American man had $16,000 in cash confiscated when he tried to relocate to Hollywood, but he was not suspected of committing any specific crime. According to data published by the Chicago Tribune earlier this month, the policy often targets lower-income residents, and even if they break the law, their crimes are less serious.

Simon Black, investor and author who runs the blog Sovereign Man, writes:

“So, in theory, if you leave the U.S. with more than $10,000 in Bitcoin or Ethereum, you must admit that fact to the authorities or face the penalties listed above (jail, confiscation of civil property, etc.).”

"Long live freedom!" he added.

Fight

Public records show that the bill has not made significant progress so far. On May 25, the bill was sent to the Senate Judiciary Committee for further consideration.

As of press time, Senators Chuck Grassley and Diane Feinstein did not immediately respond to a request for comment. In addition, the bill has been supported by Senators John Cornyn and Sheldon Whitehouse.

But at least one person is actively opposing the bill: Theo Chino, who has waged a sustained campaign against the New York State Department of Financial Services’ BitLicense regulatory framework.

He told reporters in an email that he set up a website with contact information for senators who support the bill, and he himself tried to persuade regulators door-to-door.

“This is an over-exaggeration of bitcoin’s guilt, based on common misconceptions about the technology and its economic nature, which should cause concern among members of the bitcoin and related technology communities,” he told reporters.

Two major digital currency advocacy organizations in Washington, D.C. (the Chamber of Digital Commerce and Coin Center) are reportedly in contact with congressional offices. While declining to comment on the matter, Coin Center tweeted that it is in contact with policymakers.

"We are in contact with the appropriate people in Congress and will release an analysis soon."