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US State Wants to Legally Seize Unclaimed Cryptocurrencies Left at Custodians

The U.S. state of Illinois has advanced a bill to consider unclaimed cryptocurrencies at custodians abandoned after five years. The coins will then be liquidated and the proceeds remitted to the State Treasurer. The cryptocurrency owners will have no recourse against the custodians or the state.

Also read: US Lawmaker Introduces Crypto-Currency Act of 2020 While Under Coronavirus Quarantine

Crypto Considered Abandoned if Unclaimed for 5 Years

Illinois House Bill 4573, which amends the state’s Revised Uniform Unclaimed Property Act, was assigned to the state’s Revenue and Finance Committee on Thursday. As if to demonstrate the oft-cited bitcoin maxim “not your keys, not your coins,” the bill introduced by Rep. Michael J. Zalewski states:

[The bill] Provides that virtual currency is presumed abandoned if it is unclaimed by the apparent owner 5 years after the last indication of interest in the property.

Rep. Michael J. Zalewski introduced a house bill in the U.S. state of Illinois that will allow the state to liquidate unclaimed cryptocurrencies left inactive at exchanges.

The term “virtual currency” is defined in the bill as “any type of digital unit, including cryptocurrency.” A holder “means a person obligated to hold for the account of, or to deliver or pay to, the owner, property subject to this Act” and the term “Apparent owner” means “a person whose name appears on the records of a holder as the owner of property held, issued, or owing by the holder.”

Forced Liquidation

The bill additionally “Provides for the delivery of reportable virtual currency to the State Treasurer,” according to its text. Referring to the State Treasurer as the administrator, the bill proposes:

If property reported to the administrator is virtual currency, the holder shall liquidate the virtual currency and remit the proceeds to the administrator. The liquidation shall occur anytime within 30 days prior to the filing of the report under Section 15-401.

“The owner shall not have recourse against the holder or the administrator to recover any gain in value that occurs after the liquidation of the virtual currency under this subsection,” the bill continues