The Finance Committee met 02/10/2025. One of the items they voted on was a request from the Police Department to open a bank account to be used for returns of seized cryptocurrencies. The purpose of this would be to provide an avenue for scamming victims to receive their money back in US dollars rather than as cryptocurrency.
The committee voted unanimously to recommend the request for approval.
I’ve prepared a transcript of the discussion for download:
Lieutenant Adam VanZeeland told the committee that there had been an uptick in crime featuring cryptocurrencies. Scammers will cold call individuals and send them to one of the several Bitcoin ATMS in the city. The victims will sometimes put in tens of thousands, sometime hundreds of thousands, of dollars and then provide the key to the scammer.
Police Detective Mike Medina made the first seizure of cryptocurrency in Outagamie County in response to a scam. That cased made its way through court and reached a point where the cryptocurrency could be returned to the victim. The victim, however, didn’t know anything about cryptocurrency. The crypto was on a USB and she did not have the ability to create a digital crypto wallet, so the USB wasn’t useful to her.
The police expected that in the future many people who were victimized would have a similar lack of knowledge and ability. Coinbase has a law enforcement portal that allows law enforcement agencies to have accounts, so the Police Department wants to open an account that could be used to exchange cryptocurrency into US dollars if the victims so requested.
Alderperson Sheri Hartzheim (District 13) noted that the exchange rate between cryptocurrency and US dollars could change very quickly, and Alderperson Katie Van Zeeland (District 5) asked what would happen if a victim asked for their cryptocurrency to be held in the account for a while until the exchange rate improved.
Lieutenant VanZeeland said that the timing of returning seized cryptocurrencies was based on court orders associated with a given case. They could not return the money until the court order to do so was in place.
The Police Department was still planning out the process, but they were thinking they would have a form the victim would sign in which they would agree to any sort of fees associated with the exchange of crypto to dollars. Once that form was signed the funds would immediately be transferred. If a victim did not want to funds exchanged to dollars then they could opt to receive the cryptocurrency back on a USB for them to manage on their own. Either way, the timing of the transfer of funds would be based on the court order.
The committee voted 5 to 0 to recommend the request for approval.
View full meeting details and video here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=1274642&GUID=18B9C91D-FB9D-41FA-A5C9-E6D57DF317D5
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