Digital Currency Can Be Virtually Canceled

Digital currency was originally meant to resemble cash in the way it could be exchanged. In one respect, though, digital currency is not so much like cash, but more like a bank account. The government can order the forfeiture of digital currency without having to physically seize anything. In this respect, digital currency is no different from a checking account.

This happened for the first time on a large scale this month when the U.S. government ordered the forfeiture of $28 million in bitcoin it found four months ago on an Internet server alleged to have served as a clearinghouse for international movements of illegal drugs. Another $140 million in bitcoin seized is being disputed in court.

Prosecutors accomplish the same thing with cash, of course, but first a law enforcement team has to physically take possession of the cash. With digital currency, the seizure and forfeiture can be all virtual, making it potentially a less expensive and less risky process.

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