Police Department in Illinois Sells Seized Bitcoin on Coinbase
Police in the village of Vernon Hills, Illinois, are selling bitcoin that was seized under the civil asset forfeiture laws in joint criminal investigations with federal law enforcement agencies. The bitcoin is related to at least two ongoing criminal investigations, and are being seized. Civil asset forfeiture is a process which enables government to take property without a criminal conviction, and sometimes even without an arrest.
“The Vernon Hills Police Department is currently working two active investigations in which Bitcoins were used by criminal organizations. Criminal activities involving Bitcoins are primarily focused on ‘darknet markets’ and theft, though officials in countries such as the United States also recognize that Bitcoins can provide legitimate financial services,” Vernon Hills Police Department’s spokesman Kim Christenson said in a statement issued on February 1st, according to the Chicago Tribune. “More information can be released once these investigations and asset forfeiture attempts have been completed,” Christenson said in the statement. The Vernon Hills Police Department has refused to share any further details of the seizure.
Vernon Hills Finance Director Nikki Larson was directed by village trustees in late January to begin the process of selling over $10,000 (USD) worth of bitcoin related to a recent criminal case. “They’re used to facilitating transactions online, but because the village doesn’t have a use for bitcoins we’re recommending that the village share be accepted and then subsequently converted into U.S. currency,” Finance Director Larson told the village trustees at a January 24th meeting, according to the Chicago Tribune. Larson also told the Chicago Tribune that Vernon Hills will likely be selling bitcoins again later this year, as Vernon Hills Police are in the final stages of another online bust.
Vernon Hills’ trustees approved three items at their meeting, the first of which approves the opening of an account with Coinbase, an exchange which Finance Director Larson described as “police-friendly.” The Finance Director was also ordered to open a new bank account, which will be linked to their Coinbase account. The trustees also requested that the Finance Director sell the cryptocurrency that the police department had seized for US dollars and to then move that money to the police department’s asset forfeiture account. According to the Finance Director, under the asset forfeiture laws, all of the money seized must go to police-related expenses, and cannot go into the village’s general fund.
It is not surprising that government officials consider Coinbase police-friendly, considering that they frequently work with law enforcement, such as filing FinCEN’s Suspicious Activity Reports against users. Many users of Coinbase have lost their ability to purchase bitcoin from their account if they had been detected sending bitcoin to addresses associated with darknet markets. Their CEO has described the company as “one of the good guys” in a statement he made about a subpoena the company received from a government agency.