Japanese police from Hyogo Prefecture have seized cryptocurrency, albeit a small amount, for unpaid traffic tickets for the first time in history. Apparently, a revised fund settlement act issued in April 2017 which legalizes cryptocurrency as a payment method gives police the ability to seize crypto for unpaid fines.
Typically real-estate, vehicles, bank savings, salary, and life insurance payouts can be seized by Japanese police for unpaid fines. However, the man, in this case, has no bank accounts and police don’t know where he works, so they went into his cryptocurrency exchange account and took the balance. Police seized JPY 5,000 (USD 44), which is actually a small fraction of the total of JPY 99,7000 in unpaid traffic tickets the man accrued for leaving his vehicle unattended and illegally parked. If payment for these fines is not received by the end of July 2018, the Japanese police will liquidate the seized cryptocurrency into fiat.
This is a miniscule amount of cryptocurrency, but it’s not the amount of cryptocurrency seized that matters, but the fact that Japanese police have now set a precedent for seizing cryptocurrency to pay fines. It goes further than that, now government officials across Japan have been given the precedent to seize cryptocurrency for any unpaid debt.
This is yet another reason to keep cryptocurrency in your own wallet instead of an exchange. It is important to keep cryptocurrency in wallets where you are in complete control of the private keys and no one else. If the man followed this simple rule, there would be no way for Japanese police to seize his crypto. The only reason this cryptocurrency was seized is because the man kept it on a centralized exchange where he did not control the private keys. Literally, someone could have USD 1 billion sitting in Bitcoin and an entire police department surrounding them in an interrogation room, but if the private key is properly secured then the police have no way to access the Bitcoin.
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