Pro Se Petitioner Demands Seized Bitcoin Be Returned, Calls Forfeiture Process Invalid

News | April 18, 2024 By:

On Monday, April 1, 2024, Matthew Lee Yensan filed a petition in the United States District Court for the District of South Carolina seeking the return of over 282 bitcoin seized by the federal government over five years ago.

Yensan, filing pro se, alleges that in 2017 he was charged with various federal drug and firearm offenses as part of a larger investigation. During this time, the government seized Yensan’s holdings of 282.845077 bitcoin, which were valued at around $1.3 million at the time. He pleaded guilty to criminal charges in early 2018 and was sentenced to 78 months in prison.

However, Yensan argues that the government’s administrative forfeiture of his bitcoin in 2018 was illegal since cryptocurrency is treated as property for tax purposes, not currency. Additionally, his bitcoin holdings far exceeded the $500,000 threshold requiring judicial forfeiture proceedings rather than an administrative process.

In his petition, Yensan states that bitcoin does not meet the definition of a “monetary instrument” eligible for administrative forfeiture under federal law. He cites IRS guidance and court precedent treating cryptocurrency like bitcoin as intangible property rather than legal tender.

Now residing in Columbia, South Carolina after his release from federal prison late last year, Yensan demands the return of his bitcoin based on alleged violations of his constitutional rights and federal forfeiture statutes. Specifically, he argues the five-year delay since his bitcoin was seized violates his Fifth Amendment right to due process.

Yensan also asserts his claim is timely filed within the six-year statute of limitations. According to his petition, the value of the seized bitcoin has fluctuated significantly since 2017 due to the volatile nature of cryptocurrency markets. However, he argues the delay has unfairly prevented him from accessing potential profits as the value of bitcoin has risen substantially overall in that time.

In addition to due process concerns, Yensan contends the government’s failure to properly initiate judicial forfeiture proceedings for an asset exceeding $500,000 in value at the time of seizure violated the law. His petition notes that federal policy requires judicial forfeiture for cryptocurrency holdings valued over that threshold.

Please contact BlockTribune for access to a copy of this filing.