Officials from Vernon Hills, a village in Illinois, are preparing to sell $10,000 worth of Bitcoin seized in joint police investigations with federal authorities in the past. Coinbase, a popular Bitcoin wallet platform and exchange, will be used by local police to sell Bitcoin.
Nikki Larson, finance director of the Vernon Hills Finance Department, received approval from village trustees in late January. Upon the approval of trustees, Larson immediately began the process of selling Bitcoin by establishing an official agreement with the FBI.
“They’re used to facilitate 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 US currency,” said Larson.
Coinbase was selected by Larson as the trading platform to sell Bitcoin on behalf of Vernon Hills. Larson described Coinbase as a “police friendly” trading platform and revealed that the police department’s asset forfeiture account will be linked to the village’s Coinbase account.
Bitcoin sold on Coinbase for US dollars will be transferred to the asset forfeiture account.
Although Larson and the Vernon Hills Finance Department could continue using the police asset forfeiture account to process the conversion of Bitcoin in the future, Larson intends to create a specific bank account to link to Coinbase.
Considering that many darknet activities and theft using Bitcoin were discovered by local police, Kim Christenson, a spokesman for the Vernon Hills police department, said in a statement that the police expects to see an increase in illicit activities involving Bitcoin in the future.
“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.”
Bitcoin industry’s good guys
Over the past few months, Coinbase has been targeted by the Internal Revenue Service despite operating as one of the very few exchanges that are compliant with US regulations. Coinbase is notably the only Bitcoin exchange in the world to obtain New York’s BitLicense, which is known as an inefficient and impractical regulatory framework to the Bitcoin industry.
Brian Armstrong, Coinbase CEO, revealed in a statement that the company will not hesitate in spending over a million US dollars in protecting user privacy by declining the request of the IRS to submit user accounts and sensitive information of Coinbase traders.
“We will likely incur a legal cost of between $100,000 and $1,000,000 in the process of defending our customers from this overly broad subpoena; funds which could be put to better use building innovative products or hiring more employees. This heavy-handed approach by the IRS punishes one of the good guys.”
Like Armstrong noted, Vernon Hills amongst other police agencies have acknowledged Coinbase as “one of the good guys.” Larson went as far as describing Coinbase as a “police friendly” Bitcoin exchange, emphasizing the work of Coinbase in being fully regulated and compliant with policies.