Luxembourg lawmakers have debated issues related to the volatile ups and downs of seized digital assets. Unlike seized fiat assets, cryptocurrencies can undergo massive changes in value, making it difficult to manage these funds.
Luxembourg is currently in the second year of determining exactly how the country’s crypto laws will work, as foreclosure management is a major issue. Problems arise when property is confiscated and a decision is awaited on whether to confiscate it or not. This can lead to a situation where the seized money is worth much less when it is eventually returned or confiscated. As with other confiscated finds in most EU countries, Luxembourg uses it for social or public interest purposes, according to the European Commission.
The same committee has criticized Luxembourg in the past for slowing down a 2014 EU directive that would bring the entire group to an agreement on how and when illegal products are taken from defendants.
Ongoing crypto legislation negotiations
Discussions were held on September 6 to help clarify the government’s responsibility to “preserve confiscated property.” Talks must weigh the risks of letting victims suffer or speeding up the seizure, forfeiture and use of remittances. Lawmakers have used examples of Bitcoin prices fluctuating more than 30% in 24 hours to make their case. Officials want to make sure they don’t lose large percentages of the seized money before it can be properly confiscated. Also, if the money is eventually returned, what are the ethical ramifications of seizing one amount and returning another?
The country says it plans to create a new government asset management office that will deal with these and other issues. The group will be in charge of preserving the value of the seized assets by converting them into euros as soon as possible. Some members of the government fear that they will be held liable for losses suffered by people whose properties are returned at a lower value than they were when they were seized.
Lawyers for the ministry told lawmakers at the meeting that “in the case of cryptocurrencies, given the high volatility of prices, the state cannot guarantee that their value will be preserved.”
I like cryptocurrencies. I have been studying it for several years, but also investing in it and working in this field. Also, I do articles on the subject where I try to be sharp.
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