In a long-awaited move that has crypto investors in a frenzy, former President Donald Trump has proposed creating a national Bitcoin stockpile if he is re-elected to the White House in November 2024.

Trump’s plan for national Bitcoin reserve faces resistance

At the Bitcoin 2024 conference on July 27, Trump said announced his intention to create a central repository for all Bitcoins owned or acquired by the US government. He sees this as a long-term national asset for the benefit of all Americans.

However, this proposal has raised doubts among former prosecutors and legal experts, who argue that Trump’s plan seized digital assets may not be used for their intended purpose: compensating crime victims.

According to According to a report from Bloomberg, seized assets, including Bitcoin, are typically liquidated under current U.S. forfeiture laws to repay victims and support law enforcement.

Nevertheless, the report notes that the former president’s pledge to preserve the government’s Bitcoin or other cryptocurrency holdings poses a direct threat to this fundamental principle of asset forfeiture.

Amanda Wick, a former federal prosecutor and principal at Incite Consulting, expressed concerns about the implications of Trump’s strategyhighlighting that a significant portion of the seized cryptocurrencies likely belong to victims of cybercrime such as hacks, ransomware attacks and scams.

Amanda Wick stressed the importance of restitution for victims and criticized the prioritization of a Bitcoin stash over “rightful compensation” for those affected by criminal activity in the industry.

Legal experts criticize Trump’s bid

The US currently holds approximately $12 billion worth of various cryptocurrencies, including Bitcoin (203,230), Ethereum (50,224), and over $12 million worth of Tether’s USDT stable coinarising from criminal and civil forfeiture cases overseen by federal prosecutors and U.S. judges.

“The primary purpose of asset forfeiture is to deter and punish criminal activity by depriving criminals of property used or obtained through illegal conduct,” former Department of Justice (DOJ) prosecutor Elizabeth Boison told Bloomberg. “Trump’s proposal is not consistent with the purpose of asset forfeiture or with what the law currently allows.”

Meanwhile, Trump’s crypto- and Bitcoin-friendly pivot is reportedly being viewed with “deep skepticism” by legal experts.

According to Bloomberg, these experts see Trump’s strategy as a “trick” to curry favor with the digital property community. As former prosecutor Laurel Loomis Rimon bluntly told Bloomberg, “It doesn’t make sense” from a policy standpoint.

At the time of writing, BTC has managed to consolidate above key support walls at $56,800. This represents a small difference from Tuesday’s price with a record gain of 0.8%, but healthy overall after a quick rebound from $49,000 on Monday.

Main image of DALL-E, chart from TradingView.com