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Committee backs expansion of asset forfeiture rules to include cryptocurrency in criminal cases
Summary
The committee voted to report SB 1498, which would create clearer definitions and procedures for forfeiting digital currency in state criminal cases and allow venue changes to place forfeiture proceedings where seizing agencies are located; supporters said the measure helps return proceeds to Texas communities.
Senator Nichols explained SB 1498 to the committee as a measure to expand asset-forfeiture authority to encompass digital assets and to provide procedural clarity for handling cryptocurrency seized in criminal investigations.
Proponents told the committee that cryptocurrency now plays a significant role in money laundering, scams and other organized financial crime and that current statutory and procedural gaps make forfeiture and recovery difficult for state and local agencies. The FCIC and local prosecutors described cross-jurisdictional obstacles and a shortage of in-state capacity for tracing and seizing digital assets.
Jeff Headley of the Texas Financial Crimes Intelligence Center told the committee the FCIC has seen a “concerning rise” in the use of cryptocurrency in criminal activity and called SB 1498 “a crucial step” to streamline criminal forfeiture of cryptocurrency and make seized proceeds available to Texas. Thomas Wilson, an assistant criminal district attorney in Smith County, said the change would give state prosecutors tools to pursue funds used to profit from drug trafficking, fraud, theft and human trafficking when the funds exist only in digital form. He described cryptocurrency as having “no location” and said a change-of-venue provision would allow state filings to occur where the seizing agency is located.
Stephanie Mace of AARP Texas said the bill would help recover funds for victims of crypto kiosk scams that target older Texans; she urged the committee to support SB 1498.
After invited and public testimony, Senator Huffman moved that SB 1498 be reported favorably to the full Senate. The clerk called the roll and the committee recorded the bill as reported favorably (tally: 4 ayes, 0 nays). Senator Nichols requested referral to the Local & Uncontested calendar; the chair ordered it.
Supporters argued the bill returns criminal proceeds to the state and increases the ability of state and local prosecutors to recover victim funds. Witnesses said federal filings often leave seized proceeds outside the state’s control; the bill aims to keep those funds available for Texas victims and communities.
The full Senate will receive the bill next.
