Big Problems for Florida’s Cyber Fraud Unit Seizing Cryptocurrency for Forfeiture

What if Florida’s Attorney General wanted to create its own cryptocurrency “strategic reserve”? It could train law enforcement officers across the state to look for scams involving cryptocurrency. Those scams include overseas fraudsters calling Florida residents to convince them to put cash into a virtual currency kiosk through fraud. Many of those scams target the elderly.

After the fraudster obtains the victim’s cryptocurrency, they launder the cryptocurrency by selling it to “innocent purchasers for value” as part of a series of transactions in different exchanges. The innocent purchasers of the tainted asset will leave it sitting in their account without knowing there is any cause for concern. Small parts of the tainted asset might be traced to hundreds of accounts owned by innocent purchasers.

An investigator can use software to find hundreds of accounts owned by innocent purchasers and target the one with the largest balance on an exchange that is most likely to comply with the seizure warrant. Federal investigators know better than to seize cryptocurrency from innocent purchasers. Doing so would be immoral. Additionally, federal judges would eventually issue rulings that would prohibit such actions.

But in Florida, no such caution is being applied. Investigators with the local law enforcement agencies, the Office of Financial Regulation (OFR), and the Cyber Fraud Unit of the Florida Attorney General’s Office of Statewide Prosecution might look through those hundreds of innocent owners’ accounts until they find one with a big balance holding funds on a cooperative international virtual asset service provider (“exchange”) like Binance, Coinbase, or MEXC.

Exchanges like Binance, Coinbase, or MEXC will comply with any seizure warrant issued by the federal government or any state government. The federal government has a statutory scheme that allows such seizure warrants to be legally issued. Most states, including Florida, do not have such legal authority. Nevertheless, any seizure order with a judge’s signature is being honored.

Although federal investigators are experienced, well-trained, and cautious when seizing cryptocurrency, investigators in Florida’s new Cyber Fraud Unit of the Florida Attorney General’s Office of Statewide Prosecution have less experience, training, or caution. The AG’s office can stack the odds in its favor by not serving a “notice of seizure” correctly, or refusing to set a timely adversarial preliminary hearing when the Claimant requests it.

Most of the innocent purchasers of those tainted assets reside overseas. Some do not speak English. Most individuals struggle to find an experienced civil asset forfeiture attorney in Florida who is knowledgeable about the seizure of cryptocurrency. Even if they find an attorney, most cannot afford to hire that attorney, as all of their assets have just been seized. To address this issue, the attorney could take the case on a contingency fee basis, meaning that any attorney fees are paid as a percentage of the seized property returned.

The AG’s office can file a motion to strike the Claimant’s pleadings, alleging that they are a “fugitive” from justice under Florida’s fugitive disentitlement doctrine. Florida judges often trust the Florida Attorney General’s Office of Statewide Prosecution. So the judges blindly sign orders without conducting any research or analyzing the issues. Those issues include:

1. The Law Enforcement Agency Has No Authority to Seek a Seizure Warrant Outside its Territorial Jurisdiction
   • § 30.15(1)(b), Florida Statutes, prohibits a sheriff’s office (or any local law enforcement agency) from executing a seizure warrant outside of its territorial jurisdiction.
   • This statute limits the authority of a sheriff’s office to its own county.
   • If a seizure warrant is issued or served outside the sheriff’s lawful geographic authority, any resulting seizure is potentially unlawful and void, undermining subject matter jurisdiction in civil forfeiture proceedings.
     • Exception: The sheriff might lawfully execute or serve warrants in another county or out-of-state, if expressly authorized by a Florida statute or a multi-jurisdictional task force agreement.
2. The Judge Has No Authority to Sign a Seizure Warrant without Subject Matter Jurisdiction
   • Forfeiture is an in rem action that requires the court to have actual or constructive control over the property. If the asset is not located within the jurisdiction, the court lacks subject matter jurisdiction to sign the seizure warrant. Burns v. State, 147 So. 3d 95 (Fla. 5th DCA 2014)
   • Seizing cryptocurrency from any exchange located outside its jurisdiction would be prohibited due to a lack of subject matter jurisdiction.
   • As a result, all exchanges should refuse to cooperate with any seizure warrant coming from a Circuit Court Judge in Florida, unless the exchange is located in the same county as the Circuit Court judge.
3. Cryptocurrency Does Not Qualify as ‘Monetary Instrument’
   • Since noone is arrested in these seizures, § 932.703(1)(a)5, Fla. Stat., requires the seized property be a “monetary instrument” which is defined, purposes of this subparagraph, as coin or currency of the United States or any other country; a traveler’s check; a personal check; a bank check; a cashier’s check; a money order; a bank draft of any country; an investment security or negotiable instrument in bearer form or in other form such that title passes upon delivery; a prepaid or stored value card or other device that is the equivalent of money and can be used to obtain cash, property, or services; or gold, silver, or platinum bullion or coins.
   • Neither the cryptocurrency account nor the cryptocurrency within the account would qualify as a monetary instrument.
   • If the seized property is not a ‘monetary instrument’ or other qualifying asset under the statute, it cannot be seized or forfeited under the Florida Contraband Forfeiture Act without an arrest.
4. No Nexus Between Alleged Victim’s Funds and Seized Cryptocurrency
   • § 932.703(2)(a), Fla. Stat., requires a nexus between the victim’s funds and the seized cryptocurrency.
   • Without a sworn showing that the seized assets are traceable to the proceeds of unlawful activity, there is no basis for forfeiture.
   • A lack of nexus undermines the core requirement of the statute.
   • The fact that a small portion of the victim’s funds can be “traced” across the Blockchain to a small portion of the innocent owner’s wallet does not constitute probable cause to seize the entire wallet unless there is probable cause of money laundering.
   • The tracing is typically based on hearsay from software used by TRM Labs or Chainalysis.
   • Law enforcement might allege money laundering without probable cause, so they can return that small portion recovered to the victim and keep the rest for their agency.
5. Use of Unsworn Statements in Ex Parte Motion for Seizure
   • § 932.703(2)(a), Fla. Stat. requires a “sworn affidavit”
   • When considering the application for probable cause, the court may not rely on unsworn allegations to make findings of probable cause.
   • In many cases, the law enforcement officers who complete the affidavit have no firsthand knowledge of any of the allegations in the application for the probable cause determination.
6. Search Warrant Executed Outside 10-Day Rule Found in § 933.05, Fla. Stat.
   • § 933.05, Fla. Stat. requires the seizure warrant be executed within 10 days, which provides a clear procedural protection against stale or unsubstantiated enforcement action.
   • In many of these cases, the exchange takes more than 10 days to respond to the seizure warrant issued in Florida.
7. Not Filing the Motion for Probable Cause Determination within the Ten (10) Day Statutory Deadline Required by § 932.703(2)(a), Fla. Stat.
   • Since this deadline is mandatory, missing it deprives the court of jurisdiction. Florida’s Attorney General cannot proceed with forfeiture without first establishing that it applied for a probable cause determination within the time required by statute.
8.  Improper Delegation of Forfeiture Power to AG’s Office
   • § 30.15(1), Fla. Stat.
9. Inapplicable Federal Statutes Cited in State Court
   • Florida law governs state forfeiture proceedings, including the Florida Contraband Forfeiture Act; Chapter 934, Fla. Stat.
   • Reliance on inapplicable federal laws, such as 18 U.S.C. § 2703, misleads the court and may result in improper seizures or rulings.

A recent final orders for forfeiture in this type of case provided:

…WHEREUPON IT IS ORDERED AND ADJUDGED:

Petitioner’s Motion for Final Judgment seeking a Final Order of Forfeiture is hereby GRANTED.

Petitioner’s right and interest in, and title to COINBASE ACCOUNT UID #5a2cea039b928e00ee33b919, the property subject to this action described as 2 containing multiple cryptocurrency tokens is perfected nunc pro tunc to October 2, 2025, the date the full amount of the wallets were seized.

All ownership interest in the property subject to this action described as COINBASE ACCOUNT UID #5a2cea039b928e00ee33b919 containing multiple cryptocurrency tokens, once liquidated is hereby distributed in the following manner pursuant to Fla. Stat. § 932.7055:

a. Payment to the victim, [name deleted] (identified in the complaint and affidavit) in the amount of $1,200.00. If the total amount of liquidated funds is less than $1,200.00, this victim is to receive the total amount of liquidated funds and nothing more. The victim shall receive no more than $1,200.00 total. [Victim’s name and address is deleted]

b. Any remaining balance shall be divided and disbursed in the following manner:

i. Fifty percent (50%) goes to Marion County Sheriff’s Office P.O. Box 1987 Ocala, FL 34478-1987

ii. Twenty-Five (25%) goes to the Florida Department of Legal Affairs. Office of Statewide Prosecution Attn: Executive Assistant Fiscal Agent: Tammy Wade PL-01, The Capitol Tallahassee, FL 32399-1050 (Case Number 2024-CA-1895) 3

iii. Twenty-Five (25%) goes to the Florida Department of Law Enforcement Florida Department of Law Enforcement 2331 Phillips Road R Tallahassee, FL 32308 c/o William Bullough

Final Judgment in favor of the Petitioner is hereby entered. The Clerk of Court is hereby directed to close the file.

DONE AND ORDERED in Ocala, Marion County, Florida…

This article was last updated on Friday, July 19, 2025.