Seizure of Cryptocurrency for Forfeiture

What happens when a federal agency obtains a warrant to seize cryptocurrency for forfeiture? If your account was frozen because of an investigation by law enforcement or your cryptocurrency was seized, seek out the services of an experienced attorney focused on civil asset forfeiture.

If the federal agency obtains a warrant, the cryptocurrency is sent to a wallet controlled by the United States government for forfeiture proceedings. The Department of Justice just announced a new focus on seizing cryptocurrency for forfeiture. Specially trained agents and attorneys are learning more about how to seize funds in civil asset forfeiture cases involving these emerging technologies. You also need an experienced attorney to challenge the seizures for the forfeiture of cryptocurrency.

To avoid the risk of wild fluctuations in cryptocurrency, your attorney might help you negotiate a stipulation and consent order for the interlocutory sale of the Defendant Property to convert it from cryptocurrency into U.S. Currency. Under this type of stipulation and consent order, the government would liquidate the Defendant Property and exchange the Defendant Property for U.S. dollars to be held in the United States Department of Justice’s Seized Asset Deposit Fund pending resolution of this case.

Attorney for Seizure of Cryptocurrency for Forfeiture

If your cryptocurrency account was frozen or if the funds were already seized by a law enforcement agency in the United States, act quickly to find a qualified civil asset forfeiture attorney experienced in handling these cases. Attorney Leslie Sammis is uniquely qualified to help clients get their cryptocurrency back after an account is frozen or assets are seized for forfeiture.

Call 813-250-0500 to discuss your case. Same-day phone or office appointments can be scheduled when needed.

Leslie Sammis has handled civil asset forfeiture cases for over 10 years. Her experience includes representing companies, banks, lien holders, and individuals in cases involving the seizure of U.S. Currency, cryptocurrency, and other assets. She partners with other civil asset forfeiture attorneys nationwide to fight these complex cases.

Her firm has gotten assets back from every federal agency, including the DEA, CBP, FBI, ATF, and USSS. Her website provides descriptions of successful outcomes in asset forfeiture cases, including case results involving cryptocurrency and high-value assets. She has taken forfeiture cases to evidentiary hearings and before a jury. In January of 2025, for example, a jury in the Middle District of Florida found in favor of her clients in a civil asset forfeiture case. As a result of the jury verdict, her clients got all of their property back. Then the government was ordered to pay interest and attorney fees in excess of $40,000.

Attorney Leslie Sammis understands how cryptocurrency seizures are treated under these laws, including agency protocols and compliance requirements. She publishes articles demonstrating her knowledge of the Civil Asset Forfeiture Reform Act (CAFRA) and the Florida Contraband Forfeiture Act (FCFA). Most importantly, she has the courtroom experience necessary to file and litigate motions for the return of property in both state and federal courts. She also files motions to suppress when assets are seized by law enforcement agencies in violation of state or federal law. She can answer the complaint while preserving all viable defenses under state or federal law. She understands the best ways to force the agency to pay her client’s attorney fees when she prevails on the merits.

By handling these cases, Leslie Sammis gains a deeper understanding of blockchain technology, wallet structures, and the unique legal challenges associated with digital asset seizures. She is familiar with the software used by law enforcement to trace assets, including Chainalysis and TRM Labs. She understands the importance of partnering with the best forensic accountants and blockchain analysts to quickly trace and recover assets.

Leslie Sammis uses a client-focused approach with a transparent fee structure. She provides written fee agreements that clearly explain the costs and fees, depending on whether a contingency or flat fee applies. She takes a proactive approach by helping clients develop the best strategies for minimizing delays and maximizing the recovery. She has the skills, knowledge, and experience necessary to handle even the most complex asset forfeiture cases.

Call 813-250-0500 to talk with an attorney at Sammis Law Firm.

Case Result for Cryptocurrency Seizure for Forfeiture

Court Orders the Return of $500,000 of Cryptocurrency Seized by a Florida Sheriff’s Office

On June 17, 2025, the Honorable J. Layne Smith, Circuit Judge in Wakulla County, FL, ordered the sheriff’s office to return the seized cryptocurrency, including over $500,000 worth of Bitcoin (BTC), to our client. Shortly after the cryptocurrency was seized and our law firm was retained, we filed a demand for an adversarial preliminary hearing (APH) on the Florida Attorney General’s Office as required by the notice of seizure. An all-day adversarial preliminary hearing was held on June 11, 2025. After the hearing, the Court entered an order finding:

At the beginning of the adversarial preliminary hearing, Ms. Sammis handed the Court a copy of the claimant’s motion to dismiss and memorandum of law that she had filed that morning. The Court reviewed the motion prior to the start of the evidentiary hearing. The Court took the motion under advisement and proceeded with an all-day adversarial preliminary hearing.

The court found that because the cryptocurrency account was never located in Wakulla County, FL, per Florida Statute Section 30.15(1), the sheriff’s office lacked the authority to seize property in another county….Wherefore, the Court dismisses this action for lack of subject matter jurisdiction. The Court orders the petitioner to return the seized account to the claimant.

The Florida Attorney General’s Office then filed a motion for rehearing, which was denied on July 8, 2025. The Florida Attorney General’s Office had 30 days to file a “notice of appeal,” but filed to do so. After those 30 days passed, the Florida Attorney General’s Office agreed to return all of the seized cryptocurrency to the client.

AUSA Returns Cryptocurrency After Complaint Filed

DEA seized USDT and and Bitcoin from our client’s Binance account. After receiving a “notice of seizure,” we filed a verified claim for court action. The AUSA filed a complaint in the U.S. District Court but then agreed to return the property before an answer became due. We entered a memorandum of agreement that ALL of the client’s cryptocurrency would be returned to the client’s wallet within fourteen (14) days. The funds were returned within one week of the agreement being signed.

AUSA Agrees to Withdraw Seizure Warrant for Bitcoin and USDT in Binance Wallet

Our client’s Binance account was “frozen as it is currently under investigation by law enforcement.” We contacted the Special Agent with the Cyber Group of Homeland Security Investigations (HSI) and the Assistant United States Attorney (AUSA) assigned to the case. The AUSA obtained a seizure warrant but agreed to hold it pending further negotiations. Our client was accused of being an intermediary or a broker of funds stolen from victims of a liquidity mining pool scam in California. We requested a copy of the seizure warrant, supporting affidavit, and account records obtained from Binance. We presented several arguments for why the seizure warrant should be withdrawn, including:

• the U.S. District Court had no jurisdiction over the cryptocurrency funds seized for civil asset forfeiture;
• any accusation that Peer to Peer (P2P) trades constitute a “money transmitting business” was unjustified;
• the fraudulently obtained cryptocurrency was only in our client’s wallet for a short time, so the funds later frozen by Binance were not connected; and
• our client qualified as a “bona fide purchaser” who had no cause to believe that the property was subject to forfeiture.

Shortly thereafter, the AUSA thanked us for providing additional information. The AUSA indicated that although they believed that fraud proceeds were deposited into our client’s wallet, upon further review of our client’s transaction history and the arguments presented, they agreed to withdraw the seizure warrant by seeking the appropriate order from the issuing magistrate and communicating any withdrawal order to Binance promptly.

How Does the U.S. Government Seize Cryptocurrency?

Law enforcement might trace the proceeds of criminal activity through blockchain analysis. The analysis may reveal the movement of illicit transactions through a payment processing service operated by a recognized cryptocurrency exchange. By serving a subpoena, law enforcement officers can obtain information revealing the identity of those involved in the transactions.

Based on that information, the court might also issue a search warrant that authorizes the seizure of:

• unhosted wallets and any information used to access hosted or unhosted cryptocurrency wallets; and
• cryptocurrency by transferring the full account balance in each wallet to a public cryptocurrency address controlled by the United States government.

Criminal Statutes for the Seizure of Cryptocurrency

Suppose a complaint for forfeiture is filed in the U.S. District Court. In that case, the complaint might reference one of several different criminal statutes that are alleged to justify the forfeiture action, including:

• Title 21, United States Code, Section 841(a), prohibits anyone from
  • (i) manufacturing, distributing, or dispensing, or possessing with intent to manufacture, distribute, or dispense, a controlled substance; or
  • (ii) creating, distributing, or dispensing, or possessing with intent to distribute or dispense, a counterfeit substance.
  • A conspiracy to violate the same statute is proscribed by Title 21, United States Code, Section 846.
• Title 18, United States Code, Section 371, prohibits two or more persons from conspiring either to commit any offense against the United States, or to defraud the United States, or any agency thereof in any manner or for any purpose, and one or more of such persons do any act to effect the object of the conspiracy, each person shall be fined or imprisoned not more than five years, or both.
• Title 18, United States Code, Section 1956(a)(1)(B), prohibits conducting financial transactions knowing that the transaction is designed in whole or in part:
  • (i) to conceal or disguise the nature, location, source, ownership or control of the proceeds of the specified unlawful activity; or
  • (ii) to avoid a transaction reporting requirement under State or Federal law.
• Title 18, United States Code, Section 1956(h), provides that any person who conspires to commit any offense defined in Title 18, United States Code, Sections 1956 or 1957 shall be subject to the same penalties as those prescribed for the offense the commission of which was the object of the conspiracy.
• Title 18, United States Code, Section 1957, prohibits knowingly engaging or attempting to engage in a monetary transaction in criminally derived property of a value greater than $10,000 that is derived from specified unlawful activity.
• Title 18, United States Code, Section 1960, makes it unlawful to engage in an unlicensed money transmitting business.
  • An unlicensed money transmitting business is defined as one which affects interstate or foreign commerce in any manner or degree, is operated without an appropriate license in a state, whether or not the transmitter knew that the operation was required to be licensed, is not in compliance with the money transmitting business registration requirements under 31 U.S.C. § 5330.
  • 31 U.S.C. § 5330 requires that money transmitting businesses be registered with the Secretary of the Treasury, or otherwise involves the transportation or transmission of funds that are known by the transmitter to have been derived from a criminal offense, or are intended to be used to promote or support unlawful activity.

The complaint may allege a statutory basis for civil forfeiture based on Title 18, United States Code, Section 981(a)(1)(A).

That section provides for the forfeiture to the United States of any property, real or personal, involved in a transaction or attempted transaction in violation of sections 1956, 1957, or 1960 of Title 18 of the United States Code, or any property traceable to such property.

Most digital currency exchangers, including Binance.com, are located outside the United States to avoid regulation. Some exchangers operated inside the jurisdiction of the United States, including Coinbase, Binance.us, and Huobi Global. Regardless of whether the exchanger operates in the United States, it may still cooperate with law enforcement investigations and freeze accounts upon request.

Read more about seizure of cryptocurrency for forfeiture by the FBI.

Blockchain analysis in Civil Asset Forfeiture Proceedings

Because blockchain data generally consist only of alphanumeric strings and timestamps, it is nearly impossible to look at a single transaction on a blockchain and immediately ascertain the identity of the individual behind the transaction.

But law enforcement can obtain leads regarding the identity of the owner of an address by analyzing blockchain data to figure out whether that same individual is connected to other relevant addresses on the blockchain.

To analyze blockchain data, law enforcement can use blockchain explorers as well as commercial services offered by several different blockchain-analysis companies. These companies analyze virtual currency blockchains and attempt to identify the individuals or groups involved in transactions.

“For example, when an organization creates multiple [cryptocurrency] addresses, it will often combine its [cryptocurrency] addresses into a separate, central [cryptocurrency] address (i.e., a “cluster”). It is possible to identify a ‘cluster’ of [cryptocurrency] addresses held by one organization by analyzing the [cryptocurrency] blockchain’s transaction history. Open-source tools and private software products can be used to analyze a transaction.” United States v. Gratkowski, 964 F.3d 307, 309 (5th Cir. 2020).

Law enforcement claims the information provided by these tools to be reliable because they were used in numerous unrelated investigations.

What is Cryptocurrency?

Fiat currency, such as a dollar of U.S. Currency, is created and regulated by a government. Digital currency, on the other hand, is defined as an electronic-sourced unit of value that can be used as a substitute for fiat currency. The government often uses the term “digital currency,” “cryptocurrency,” or “virtual currency” interchangeably.

Bitcoin is one of the most commonly used and well-known digital currencies.

Digital currencies are similar to other currencies but do not have a physical form. Instead, digital currencies exist entirely on the internet. Instead of being issued by any government or bank, digital currency is created and controlled by computer software operating on a decentralized peer-to-peer network.

In the United States, digital currency is accepted for legitimate financial transactions. Nevertheless, the government might seek to seize digital currency for a civil asset forfeiture proceeding if it suspects it is used for conducting illegal transactions or for concealing or disguising the true nature, source, location, ownership, or control of illegally obtained criminal proceeds.

Customers trade digital currencies for other digital or fiat currencies by using a business known as a digital currency exchanger (a “DCE” or “exchanger”). The DCE might be a brick-and-mortar business, but most operate entirely online.

Both brick-and-mortar and online exchangers accept digital currencies and exchange them for fiat and traditional payment methods, other digital currencies, or transfers between digital currency owners.

The DCE might operate outside the boundaries of the United States to avoid regulation and legal requirements. Some DCEs, including Coinbase and Huobi Global, operate within the jurisdiction of the United States.

Read more about seizures for forfeiture from MEXC.

What is a Blockchain?

A blockchain is an ever-expanding list of records called blocks. These blocks are linked together using cryptography.

The blockchain is a public, distributed, and decentralized digital ledger. The ledger records transactions across different computers. Without the consent of the network and the changing of all successive blocks, the records may not be altered retroactively.

Blockchain is a method to record transactions that provide high security by design. In other words, the transactions are verified with advanced cryptography and spread across many computers in a peer-to-peer network or distributed ledger.

Since transactions are verified with advanced cryptography and spread across many computers in a distributed ledger or peer-to-peer network, blockchain is designed to provide the highest level of security.

What are Tokens?

Created by an issuing company, tokens are a form of digital assets. A company often uses this asset to launch a new digital product or service.

Since the token remains the property of issuing company, tokens are used for a more limited form of payment. Tokens are different from other blockchain-based cryptocurrencies, such as Bitcoin.

The issuing company maintains technical restrictions that prevent the tokens from being used for unauthorized purposes. The token acts like a paper I-O-U or voucher since it represents a certain value and may be exchanged at that value under certain conditions.

Many types of exchangers, including Coinbase or Huobi, allow tokens to be bought and transferred by participants. Investors purchase tokens for fiat currency with the expectation that the token will become more valuable at some point in the future.

What is a Wallet?

Unique electronic addresses identify a wallet. The wallet stores an access code allowing individuals to conduct transactions on the public ledger. To access a wallet on the public ledger, an individual must use a public address (or “public key”) and a private address (or “private key”).

The public address acts like an account number. The private address acts like a password used to access that account. Although the public address of those engaging in digital currency transactions is recorded on the public ledger, the true identities of the individuals or entities behind the public address are not recorded.

If a real individual or entity is linked to a public address, it may be possible to determine what transactions were conducted by that individual or entity. For this reason, digital transactions are sometimes called “pseudonymous” because they are somewhat anonymous.

Participants might be identified when they use a digital currency exchanger to transact between digital currency and fiat. Alternatively, the participant might be identified if the digital currency exchanger voluntarily cooperates with law enforcement.

What is Tether?

“Tether” is a commonly used token. Issued by Tether Limited, Tether is a decentralized, peer-to-peer form of digital currency with no association with banks or governments. Participants buy Tether tokens stored in a participant’s digital or cryptocurrency wallet.

Tether is generally considered a “stablecoin” because its intended value is tied to the value of the U.S. Dollar. Cryptocurrency traders convert other digital currencies into Tether for temporary or long-term storage.

One benefit of holding Tether is avoiding the dramatic swings in value often experienced by other digital currencies.

Read more about how federal agencies seized USDT in cooperation with Tether.

What is Bitcoin?

Bitcoin is the most commonly used cryptocurrency in market capitalization. Bitcoin is acquired through cryptocurrency exchanges, cryptocurrency ATMs, or directly from other people.

BTC transactions require an address, a public encryption key, and a private encryption key. The encryption key is stored in hosted or unhosted wallets. Darknet marketplaces assign users a cryptocurrency wallet to make purchases or receive payments allowing transfers cryptocurrency from a hosted or unhosted wallet into their marketplace wallet by sending cryptocurrency like BTC to a deposit address assigned to their account.

Every transfer of cryptocurrency like BTC is documented in real time on a public ledger called the “blockchain.”  The BTC blockchain contains only the sender’s address, the receiver’s address, and the amount of Bitcoin transferred.

The names of the owners of the addresses are anonymous on the BTC blockchain, but law enforcement officers used publicly-available software to analyze the BTC blockchain by mapping data on the blockchain to learn about the identities of specific users of a given cryptocurrency wallet.

Read more about the seizure of Bitcoin for civil asset forfeiture.

What is Ethereum?

A token issued by the Ethereum network called “Ethereum” is the second most commonly used cryptocurrency in market capitalization. Ethereum is different from Bitcoin because the scripting language in Ethereum provides additional functionalities, including the creation of nonfungible tokens (NFTs), DeFi platforms, and smart contracts.

As a decentralized, peer-to-peer form of digital currency, Ethereum has no association with banks or governments. Participants buy Ethereum tokens. The tokens are stored in a participant’s digital wallet.

Like Bitcoin, Ethereum is a cryptocurrency that has a public blockchain to store transactions. A private key of an address is needed to spend funds because it relies on cryptography for security.

Federal Statutes Allowing Forfeiture of Cryptocurrency

The government takes the position that the following statute allow the seizure of cryptocurrency for civil asset forfeiture proceedings:

• Money Laundering involving Cryptocurrency –
  • 18 U.S.C. § 981(a)(1)(A) mandates forfeiture of any property, real or personal, involved in a transaction or attempted transaction in violation of section 18 U.S.C. §§ 1956, 1957, or 1960, or any property traceable to such property.
• Wire Fraud involving Cryptocurrency  –
  • 18 U.S.C. § 981(a)(1)(C) mandates forfeiture of property constituting or derived from proceeds traceable to wire fraud, conspiracy to commit wire fraud, or any offense constituting “specified unlawful activity” as defined by 18 U.S.C. § 1956(c)(7), or a conspiracy to commit such offense. A violation of 18 U.S.C. § 1343, or a conspiracy to commit that offense, constitutes specified unlawful activity under 18 U.S.C. § 1956(c)(7)(A) as an offense listed in 18 U.S.C. § 1961(1)(B).
• Wire Fraud Conspiracy involving Cryptocurrency –
  • 18 U.S.C. § 1343 provides that whoever, having devised or intending to devise any scheme or artifice to defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises, transmits or causes to be transmitted by means of wire, radio, television communication in interstate or foreign commerce, any writings, signs, signals, pictures, or sounds for the purpose of executing such scheme or artifice, commits the violation of wire fraud.
• Money Laundering by Concealment involving Cryptocurrency –
  • 18 U.S.C. § 1956(a)(1)(B)(i) provides in relevant part that whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity— . . . knowing that the transaction is designed in whole or in part . . . to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of “specified unlawful activity” is guilty concealment money laundering.
• International Money Laundering involving Cryptocurrency –
  • 18 U.S.C. § 1956(a)(2)(B)(i) provides that whoever transports, transmits, or transfers, or attempts to transport, transmit, or transfer a monetary instrument or funds from a place in the United States to or through a place outside the United States or to a place in the United States from or through a place outside the United States—knowing that the monetary instrument or funds involved in the transportation, transmission, or transfer represent the proceeds of some form of unlawful activity and knowing that such transportation, transmission, or transfer is designed in whole or in part—to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity, commits international money laundering.
• Money Laundering Transactional involving Cryptocurrency –
  • 18U.S.C. § 1957 makes it a crime to knowingly engage or attempt to engage in a monetary transaction in criminally derived property of a value greater than $10,000 where those funds are derived from specified unlawful activity.
• Money Laundering Conspiracy involving Cryptocurrency –
  • 18 U.S.C. § 1956(h) provides that any person who conspires to commit any offense of 1956 or 1957 is subject to the same penalties as those prescribed for the offense the commission of which was the object of the conspiracy.

Finding an Attorney for Cryptocurrency Forfeiture Actions

If a federal agency froze your account for a law enforcement investigation or obtained a warrant to seize your cryptocurrency, contact attorney Leslie Sammis to learn more about asset forfeiture proceedings.

We can help you determine the best course of action to cooperate with the investigation if your assets are frozen. If the government executes a warrant to seize your cryptocurrency, we can help you file a demand for a preliminary hearing or claim, thereby demanding court action.

In federal seizures, filing the verified claim for court action triggers a 90-day deadline for the government to either return your property or file a complaint in the appropriate United States District Court.

If a complaint for forfeiture is filed, we can assist you in filing a judicial claim, serving interrogatories and a request for documents on the government, and litigating a motion to dismiss or defending against the case during a jury trial in federal court.

Other attorneys often contact us to partner with them in these cases. Regardless of your situation, please contact us to discuss your case.

Call 813-250-0500.

This article was last updated on Friday, October 10, 2025.