Remember when we talked about civil asset forfeiture and how it might affect Bitcoin? It’s that process where the government can take your stuff without even charging you with a crime. Well, with the US government planning to use this very tool to build up its Strategic Bitcoin Reserve, a bill in Congress is becoming incredibly important for Bitcoin holders. It’s called the Fifth Amendment Integrity Restoration Act of 2023, or the FAIR Act, and it’s arguably the most crucial piece of legislation right now for anyone holding Bitcoin. Without it, many people could see their Bitcoin seized and handed over to this Reserve with very little they can do about it.

The truth is, civil asset forfeiture has been a problem for a long time and desperately needs fixing. Across the nation, stories have emerged of state and local law enforcement making headlines by abusing this process to boost their own budgets. Think about it: police taking a Vietnam veteran’s van simply because it supposedly held marijuana, or even trying to grab a man’s entire life savings over a seat belt ticket. The Institute for Justice puts it starkly: civil asset forfeiture is “one of the gravest abuses of power in the country today,” according to them.

What makes civil asset forfeiture especially troubling is that it creates a direct financial incentive for law enforcement to seize your property, even if you haven’t been found guilty of anything. The ACLU points out this inherent conflict of interest. Now, consider Bitcoin. Its limited supply and potential for increasing value only make this financial incentive stronger when civil asset forfeiture is used to stockpile a Strategic Bitcoin Reserve.

So, how do we protect ourselves from potential abuse? Enter the FAIR Act of 2023, which has been reintroduced in 2024 with bipartisan support, including Senator Lummis. This Act aims to overhaul the federal laws governing civil asset forfeiture. The goal? To ensure that these proceedings actually respect the due process rights we’re all supposed to have under the Fifth Amendment.

One key way it does this is by raising the bar for evidence. Currently, the government only needs to show a “preponderance” of evidence – basically, it’s more likely than not. The FAIR Act wants to raise that to “clear and convincing evidence,” which means the government has to prove its case much more strongly before they can take your assets.

Under the FAIR Act, law enforcement would have to prove a real and substantial link between the property and the alleged crime. Plus – and this is huge for Bitcoin – they’d need to show that the owner of the Bitcoin actually intended to use it to facilitate a crime, knowingly agreed to its use in a crime, or was deliberately ignoring that it was being used for illegal purposes. This “intent” piece is arguably the most important part of the Act when it comes to Bitcoin.

Think about it: right now, the government could potentially seize your legitimately acquired Bitcoin if, somewhere in its past, a tiny piece of it (a UTXO) was involved in something shady like sanctions evasion or a darknet market – even if you had no idea about its history. But with the FAIR Act requiring active consent or willful blindness, you’d be protected. Simply put, you’d need to be aware of your Bitcoin’s dirty origins for it to be legitimately forfeited.

The FAIR Act also addresses another major issue: access to legal representation. It would require the government to provide a lawyer to property owners who can’t afford one, or if the legal fees would cost more than the value of the seized property. This is crucial because the current system essentially flips the script: you have to prove your property *shouldn’t* be taken, rather than the government having to prove *why* it should. This unfair burden has likely stopped many people from even trying to fight back.

Sen. Booker, one of the sponsors of the Bill alongside Sen. Rand Paul, explains the core problem: “Civil asset forfeiture allows federal law enforcement to seize the property of Americans who haven’t even been charged with or convicted of a crime. Under this system, police can keep cash, cars, and even homes based on mere suspicion of a crime. These losses often become law enforcement’s profit because the burden is on the property owner to prove they should get their property back.”

Senator Paul further added, “The government should never have the power to seize a person’s property without due process. Yet, under current civil asset forfeiture laws, Americans are being stripped of their property without ever being charged or convicted of a crime. The FAIR Act directly addresses these injustices and is a critical step toward restoring fairness and accountability, protecting property owners’ rights, and curbing the weaponization of civil forfeiture laws once and for all.”

So, if you’re in favor of a Strategic Bitcoin Reserve, think about this: making sure the FAIR Act passes should be a must-do first step. It’s the only way to ensure that the government’s Bitcoin stash isn’t built on the back of potential injustices and overreach.

This is a guest post by L0la L33tz. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.