Seizure of High-Value Digital Assets for Forfeiture
The forfeiture of high-value cryptocurrency under the Civil Asset Forfeiture Reform Act of 2000 (CAFRA) presents unique legal and procedural challenges that differ from those involving traditional high-value property.
While the legal framework for forfeiture under CAFRA applies broadly to both cryptocurrency and traditional property, the unique characteristics of cryptocurrency—such as its traceability, volatility, and commingling—introduce distinct procedural and evidentiary challenges that require careful consideration in forfeiture proceedings.
If your digital assets were frozen or seized for forfeiture, you need an attorney with experience in civil forfeiture law, technical knowledge of cryptocurrency, with trial and appellate experience in federal forfeiture cases.
Asset Forfeiture Attorneys for the Seizure of High Value Digital Assets for Forfeiture
The attorneys at Sammis Law Firm represent clients in high-value cryptocurrency and digital asset forfeiture actions. We focus on federal civil forfeiture law, particularly under statutes such as 18 USCS § 981 and 18 USCS § 983.
We are familiar with the procedural requirements under the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions. Additionally, we have a strong understanding of cryptocurrency transactions and blockchain technology, as these are often central to tracing and contesting the forfeiture of digital assets.
Attorney Leslie Sammis has technical knowledge of blockchain technology and cryptocurrency transactions. As such, she is equipped to challenge the government’s tracing methods or present evidence of legitimate ownership. She works with the top forensic experts when tracing cryptocurrency.
The firm has experience at trial in civil asset forfeiture and taking cases up on appeal. We work hard to ensure that our clients’ due process rights are protected at each stage of the proceedings. Contact us today for a free consultation.
Call 813-250-0500.
Jurisdictional and Procedural Thresholds
The courts have held that under CAFRA, assets valued at more than $500,000 must be forfeited through judicial proceedings rather than nonjudicial administrative processes. 18 USCS § 983, Bautista v. Mayorkas, 644 F. Supp. 3d 748 (2022).
This threshold applies equally to cryptocurrency and traditional property. However, the valuation of cryptocurrency can be particularly complex due to its volatile nature, which may complicate determining whether the $500,000 threshold is met at the time of seizure or forfeiture.
For example, in United States v. Tetherus, 2026 U.S. Dist. LEXIS 41874 (2026), the court noted that high-value cryptocurrency seizures necessitate judicial forfeiture proceedings, rendering the nonjudicial notice requirements of 18 USCS § 983 inapplicable (although the court did not address the applicability of the 90 day deadline requirement triggered by the filing of a claim to high value property).
Read more about why Tether might freeze USDT at the request of federal agents and why the United States Government might seizes USDT for forfeiture proceedings.
Traceability and Commingling
Cryptocurrency’s technological traceability introduces unique challenges in forfeiture cases. While cryptocurrency transactions are recorded on public ledgers (e.g., blockchain), tracing specific assets to criminal activity can be complex, particularly when funds are commingled.
Under limited circumstances, the courts have considered applying the commingled funds doctrine to cryptocurrency to treat the entire accounts as forfeitable when legitimate and illegitimate funds are mixed. In other cases, the courts have found that the commingled funds doctrine does not apply.
Cryptocurrency and digital asset cases are complicated by the fungibility and rapid transferability of cryptocurrency, which may obscure the origins of specific assets.
Burden of Proof and Substantial Connection
Under CAFRA, the government must establish by a preponderance of the evidence that the property is subject to forfeiture and demonstrate a substantial connection between the property and the alleged offense. 18 USCS § 983, United States v. $ 291,828.00 in United States Currency, 536 F.3d 1234 (2008).
In cases involving cryptocurrency, this burden may be more difficult to meet due to the pseudonymous nature of transactions and the potential for obfuscation through techniques such as mixing services or privacy coins.
The courts have emphasized the heightened burden of proof under CAFRA compared to pre-CAFRA standards, requiring the government to demonstrate a substantial connection rather than merely a nexus. United States v. Sum of $185,336.07 United States Currency, 731 F.3d 189 (2013).
When the AUSA Serves Notice of the Civil Asset Forfeiture Complaint Via Email
The procedural requirements for notice under CAFRA, including timely and adequate notice to interested parties, apply equally to cryptocurrency and traditional property. However, the unique characteristics of cryptocurrency may raise additional due process concerns.
The government might argue that a long delay in providing notice was justified due to the complexity of the investigation and the need to maintain secrecy in a sealed criminal case. The government often seeks longer delays in cryptocurrency cases due to the intricate nature of tracing and investigating digital assets.
After the complaint for forfeiture is filed in the U.S. District Court, the Assistant United States Attorney might attempt to serve any potential claimant via email. Rule G(4)(b) of the Supplemental Rules for Admiralty or Maritime Claims and Asset Forfeiture Actions states that the government must directly notify “any person who reasonably appears to be a potential claimant” of the forfeiture action.
The courts have noted that Fed. R. Civ. P. G(4)(b)(iii)(A) allows the government to send the notice “by means reasonably calculated to reach the potential claimant.”
Courts have found that notifying potential claimants via email is appropriate when “the case involves international defendants whose locations are hard to pin down and the nature of the crimes necessarily entails some degree of cyber-proficiency on the part of the Defendant Properties’ owners.” United States v. Twenty-Four Cryptocurrency Accts., 473 F. Supp. 3d 1, 6 (D.D.C. 2020) (citing Fed. Trade Comm’n v. PCCare247 Inc., Case No. 12 Civ. 7189, 2013 U.S. Dist. LEXIS 31969, 2013 WL 841037, at *4 (S.D.N.Y. Mar. 7, 2013); Philip Morris USA Inc. v. Veles Ltd., Case No. 06 Civ. 2988, 2007 U.S. Dist. LEXIS 19780, 2007 WL 725412, at *3 (S.D.N.Y. Mar. 12, 2007)).
The courts also note that adequate notice “requires only that the government attempt to provide actual notice; it does not require that the government demonstrate that it was successful in providing actual notice.” Mesa Valderrama v. United States, 417 F.3d 1189, 1197 (11th Cir. 2005) (citing Dusenbery v. United States, 534 U.S. 161, 170, 122 S. Ct. 694, 151 L. Ed. 2d 597 (2002)).
Complexity of Third-Party Claims
Cryptocurrency cases often involve competing claims from third parties asserting superior interests in the forfeited assets. For example, in United States v. Lichtenstein, 2025 U.S. Dist. LEXIS 65321 (2025), the court noted the complexity of adjudicating third-party claims in cryptocurrency cases, particularly when tracing hacked or laundered assets.
This complexity may necessitate ancillary proceedings to resolve disputes, further distinguishing cryptocurrency forfeitures from those involving traditional property.
This article was last updated on Friday October 9, 2026.
