A few weeks back, we had a brief chat about the intriguing and somewhat controversial practice of civil asset forfeiture, particularly how it applies to Bitcoin. This process allows the government to seize assets from citizens without even having to charge them with a crime. As the U.S. government declares its intent to use civil asset forfeiture as a key strategy in establishing a Strategic Bitcoin Reserve, a new piece of legislation has emerged as a potential game-changer for Bitcoin holders. It’s the Fifth Amendment Integrity Restoration Act of 2023, commonly known as the FAIR Act, and it’s possibly the most significant bill introduced in Congress right now aimed at curbing government overreach and protecting Bitcoin enthusiasts from unwarranted confiscations.
The chorus for reforming civil asset forfeiture has been loud and persistent across the nation. Many states have come under fire for misusing this process to fatten their law enforcement budgets, effectively diverting these seized funds to themselves. Consider the troubling instances where police took a Vietnam veteran’s van simply because it contained marijuana or tried to seize a man’s life savings over a mere seat belt violation. These scenarios paint a stark picture, leading the Institute for Justice to label civil asset forfeiture as one of the country’s most severe power abuses today.
The financial motivation for law enforcement to confiscate assets without due process adds another layer of complexity, as highlighted by the ACLU. Given Bitcoin’s limited supply and increasing value, this motivation can drive aggressive forfeiture efforts, particularly as the government looks to grow its Bitcoin reserves.
Enter the FAIR Act of 2023, a bill reintroduced in 2024 with notable supporters like Sen. Lummis. This legislation aims to overhaul the federal civil asset forfeiture laws, pushing towards a system that adheres to due process as outlined by the Fifth Amendment.
The Act proposes to elevate the standard of proof required from a “preponderance” of evidence—which merely suggests that something is more likely true than not—to “clear and convincing” evidence. This change raises the bar for government authorities seeking to enforce confiscations.
Under the FAIR Act, agencies must establish a significant link between the seized property and a crime, demonstrating that the property owner either intended to use the asset in committing an offense or had prior knowledge—or was deliberately oblivious—of its use in connection with such an offense. This specification is crucial when considering Bitcoin, as it demands that the owner knew about the digital currency’s questionable past for any forfeiture action to apply.
Moreover, the FAIR Act mandates that the government appoint legal counsel for owners who can’t afford representation themselves, or if the cost of legal assistance surpasses the value of the confiscated assets. The current system flips the burden of proof, making it necessary for citizens to prove their innocence to reclaim their belongings.
Sen. Booker, co-introducing the bill with Sen. Rand Paul, pointedly remarked, “Civil asset forfeiture lets federal law enforcement take Americans’ property without charging or convicting them of a crime. It’s troubling that police can confiscate cash, automobiles, or even homes simply based on suspicion. These assets often become a financial boon for law enforcement, forcing owners to prove they deserve their property back.”
Sen. Paul echoed these sentiments, advocating that “The government should never have the authority to seize someone’s property without due process. Yet, as it stands, Americans are losing their belongings without any criminal charges or convictions. The FAIR Act confronts these injustices head-on, seeking to ensure fairness, accountability, and a check on the misuse of civil forfeiture laws come to an end.”
For proponents of the Strategic Bitcoin Reserve, the FAIR Act’s passage is a vital step to assure that the government’s Bitcoin collection isn’t amassed through the misuse of power.
This piece is a guest contribution by L0la L33tz. The views expressed herein are solely theirs and do not necessarily represent those of BTC Inc or Bitcoin Magazine.
