A criminal justice service based in the Netherlands has been granted the power to confiscate digital currency holdings.

As originally reported by Dutch newspaper Trouw, the Openbaar Ministerie, a national public prosecution service within the judiciary, now has the legal ability to seize the contents of bitcoin wallets from suspected or convicted criminals. It can also sell acquired bitcoins for fiat currencies soon after they are confiscated.

According to DutchNews, citing original reports, the Openbaar Ministerie has already used this power to sell several hundred thousand euros worth of bitcoin.

This authority stems from recent court opinions that have deemed bitcoin a kind of asset that can be seized. Previous arguments that digital currency falls outside of that definition owing to its inherent digital nature were deemed invalid, opening the door for the Dutch government to legally confiscate bitcoin during investigations.

Roy Appels, a senior official with the Dutch Fiscal Intelligence and Investigation Service (FIOD), was quoted as saying of the new bitcoin confiscation authority:

“If you want to confiscate something, it has to be an actual object.”

The recent US government auction of roughy 30,000 BTC also suggests that the view that bitcoin should be treated as a tangible asset is growing in popularity globally, as the coins were sold in a similar manner as traditional confiscated goods.

Dutch community reacts

The development suggests that the Dutch judiciary – as well as the broader national government – continues to maintain a cautious stance on bitcoin. But, according to members of the bitcoin community in the Netherlands, this move isn’t necessary a bad one. The decision to deem bitcoin a seizable asset may in fact be a sign that governments and legal authorities are beginning to take a more nuanced view on digital currencies.

Carl Kuntz, a board member for Stichting Bitcoin Nederland, one of the latest approved Bitcoin Foundation affiliate programs, echoed this sentiment, saying:

“We are glad that the Dutch government is taking bitcoin [seriously].”

Paul Buitink, owner and operator of bitcoin information site deBitcoin.org, told CoinDesk that the confiscation authority means regulators are waking up the bitcoin’s growing role in the Dutch economy. What we’re seeing now, he said, is a policy alignment to recognize digital currency as a tangible, governable asset.

Buitink said:

“In a way, it’s positive because it’s further legitimizing bitcoin as something that has value and is taken seriously.”

Buitink added that despite the new powers, law enforcement officials may have a hard time actually acquiring confiscated bitcoins. He suggested that multisig wallets and other means of restricting the movement of owned bitcoins could be tapped in the future.

Dutch bitcoin law evolves

The Netherlands is home to a diverse ecosystem of digital currency companies, and even hosted this year’s Bitcoin2014 conference. However, its government has not always been as openly welcoming of bitcoin, echoing concerns raised by regulators and lawmakers around the globe.

Government regulators continue to be wary of digital currency, advising financial institutions and investors about the risks involved. Last month, the country’s central bank issued a warning on digital currencies to banks based in the Netherlands.

Yet, recent developments suggest that Dutch banks are still evaluating bitcoin.

A new report published via eZonomics by ING, an information resource produced by multinational banking company ING, posits that bitcoin’s underlying technology could one day serve critical functions within the global financial infrastructure.

For more on this report’s conclusions, read our full summary.

Bitcoin image via Shutterstock