1005 N. Marion St.
Tampa, FL 33602
813.250.0500
Sammis Law Firm

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 if your cryptocurrency was seized, then seek out the services of an experienced attorney focused on civil asset forfeiture.

Most digital currency exchangers, including Binance, are located outside the boundaries of the United States in order to avoid regulation and legal requirements. Some exchangers operated inside the jurisdiction of the United States including Coinbase and Huobi Global.

Regardless of whether the exchanger operates in the United States, it will still cooperate with investigations by law enforcement and freeze accounts upon request. If the federal agency obtains a warrant, then it complies with the warrant by sending the cryptocurrency to 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 focused on challenging these types of seizures and forfeitures.

Attorney for Seizures of Cryptocurrencies for Civil Asset Forfeiture

If a federal agency froze your account for a law enforcement investigation or obtained a warrant to seize your cryptocurrency, then contact an experienced attorney for asset forfeiture proceedings.

We can help you determine the best way to cooperate with the investigation. If a warrant is executed to seize your cryptocurrency, then we can help to file a claim demanding court action. Filing the verified claim for court action triggers a 90 day deadline for the government to either return your property or file a complaint for forfeiture in the appropriate United States District Court.

If a complaint for forfeiture is filed, we can help you file a judicial claim, serve interrogatories and a request for documents on the government, litigate a motion to dismiss, or fight the case during a jury trial in federal court.

Other attorneys often contact us to partner with them in these types of cases. No matter your situation, contact us to discuss your case.

Call 813-250-0500.


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 types of 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 a wide variety of 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 in order to avoid regulation and legal requirements. Some DCEs including Coinbase and Huobi Global operate within the jurisdiction of the United States.


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, often used within a company to launch a new digital product or digital service. Since the token remains the property of issuing company, tokens are used for a more limited form of payment. In this way, 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 merely 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?

A wallet is identified by unique electronic addresses. The wallet serves the purpose of storing an access code that allows an individual 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 often sometimes called “pseudonymous” because they are somewhat anonymous.

Participants might be identified when they use a digital currency exchanger to make a transaction 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 that are 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.


What is Bitcoin?

The most commonly used cryptocurrency in market capitalization is Bitcoin.


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 for 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 the addresses rely on cryptography for security.


This article was last updated on Tuesday, October 4, 2022.