US state representatives are smashing the dust on the legal dogma of abandoned property hundreds of years ago and applying it to Bitcoin. A new draft law may allow the government to confiscate unclaimed bitcoins.
The "Property Transfer Act" is nothing new. Back in the feudal era of the United Kingdom, they allowed the confiscation of "ownerless" and "unclaimed" property. This may be a property of sudden death, disappearance or abandonment for any reason without a will.
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However, these hundreds of years of "property transfer bills" are now being considered for renewal. At present, there are 50 states in the United States with laws to pay, but almost no state clearly stipulates that “unclaimed property” is related to cryptocurrency. However, this situation may change soon, as states realize that this may be an untapped source of income.
A new bill proposed by the New York State Assembly will allow the government to liquidate unclaimed cryptocurrency assets and transfer them to the state's fiscal pool. According to the Unclaimed Property Professionals Organization, which lobbied for the bill, the cryptocurrency "may have more unclaimed property problems."
According to the proposal, the unclaimed virtual currency will be considered “abandoned” and transferred to the New York State Auditor General’s Office. It will be sold on the exchange and all proceeds will enter the state's collection fund.
Other states, including Illinois, Colorado, and Utah, have taken similar steps to define virtual currency as property.
Although the draft is only a supplement to the existing collection method, some cryptanalysts point out the major risks. For example, if a country confiscates an unclaimed encrypted asset, it will be immediately converted into cash. Once the real holders appear, they will only receive the assets sold at the liquidation price in the form of cash, and the price after the appreciation of the assets has nothing to do with them.
It is not clear how to determine the ownership of the cleared cryptocurrency. Since ownership is confirmed by the network, selling ownership in legal tender will make the problem more complicated.
In general, the proposal raises more questions than it solves. Although it is only a draft, with the legalization of cryptocurrencies, similar laws may appear in other states.