In Rem Jurisdiction in Civil Asset Forfeiture Cases

The Ninth Circuit’s decision in United States v. Nasri, No. 22-55685, 2026 U.S. App. LEXIS 27014 (9th Cir. Sept. 2, 2026) marks a major constitutional limit on federal civil asset forfeiture.

By holding that the Fifth Amendment’s Due Process Clause bars federal courts from exercising in rem jurisdiction over foreign assets without “actual or constructive control,” the panel disrupted decades of post-1992 forfeiture practice under 28 U.S.C. § 1355(b)(2).

Under 28 U.S.C. § 1355(b)(2), Congress authorized the Department of Justice to initiate civil forfeiture actions against property located in a foreign country in any U.S. district where acts giving rise to the forfeiture occurred.

For years, the majority of federal circuits—including the D.C., Third, Fourth, and Ninth Circuits— held that 28 U.S.C. § 1355(b)(2) conferred extraterritorial jurisdiction as long as the underlying crime touched the domestic district, regardless of whether U.S. authorities had actual or constructive control over the foreign res.

Foreign cooperation was treated merely as an issue of judgment collection and enforceability, not as a constitutional prerequisite to issuing an in rem decree.

In Nasri, the government sought to forfeit approximately $1.2 million parked in Liechtenstein bank accounts belonging to Younes Nasri, an indicted fugitive residing in Dubai who allegedly ran the encrypted communications network “Phantom Secure.”

Relying on circuit precedent, the district court asserted jurisdiction and struck Nasri’s claim under the fugitive disentitlement statute without determining if the U.S. had constructive control of the foreign funds.

Foreign Bank Account and Offshore Asset Seizures

In cross-border financial crime, money laundering, and RICO investigations, the DOJ frequently attempts to forfeit accounts located in offshore banking havens (e.g., Liechtenstein, Switzerland, the Cayman Islands).

Under Nasri, prosecutors can no longer file a § 1355(b)(2) forfeiture complaint and obtain an in rem judgment based solely on domestic criminal nexus. A simple foreign freeze or temporary restraining order (TRO) is no longer sufficient by default.

Instead, the government must affirmatively establish that the foreign jurisdiction acts essentially as an “agent” of the U.S. or provides verifiable assurances of cooperation that rise to constructive control.

Challenging Fugitive Disentitlement (28 U.S.C. § 2466)

The government routinely uses fugitive disentitlement to strip overseas claimants of standing when they decline to enter the United States to face criminal charges. Nasri provides defense counsel with an antecedent, dispositive jurisdictional defense.

Constitutional in rem jurisdiction precedes the application of disentitlement statutes. Even if a claimant is an un-surrendered fugitive abroad, courts must establish constitutional control over the res before they have the power to strike claims or enter default forfeitures.

Navigating Mutual Legal Assistance Treaties (MLATs) and Comity

The decision directly impacts international diplomatic and law enforcement coordination. Existing bilateral MLAT agreements (such as the U.S.–Liechtenstein MLAT) only pledge mutual assistance; they do not automatically establish U.S. constructive control.

Foreign sovereigns are not subject to the Full Faith and Credit Clause. If the foreign state retains independent discretion to distribute or unfreeze the funds under local law, an American court lacks constructive control and risks issuing an advisory decree.

Intervening and Competing Third-Party Claims

Because an in rem decree purports to extinguish rights against the entire world, notice is paramount. Under the majority’s analysis, without physical seizure or constructive control, third parties across the globe (e.g., foreign tax authorities, judgment creditors, co-owners) receive constitutionally defective notice.

Claimants cannot waive this defect because no single party has the authority to waive the in rem jurisdictional protections owed to the rest of the world.

For asset forfeiture attorneys and cross-border litigators, Nasri provides a powerful motion-to-dismiss weapon in any case where the U.S. government seeks forfeiture of overseas property without first securing firm, verifiable custodial backing from the host sovereign.

How Nasri Might Impact the Seizure of Cryptocurrency

Does the Nasri decision impact the court’s ability to issue a seizure warrant to bring cryptocurrency belonging to a foreign national into the United States?

Nasri directly implicates this question by exposing a fundamental tension between statutory process under 28 U.S.C. § 1355 and constitutional in rem jurisdiction.

A federal court does not have the constitutional power to unilaterally execute a seizure warrant on foreign soil, and Nasri significantly limits how and when a court can establish the jurisdiction necessary to reach foreign assets.

Does a U.S. Court Have Extraterritorial Seizure Authority? The short answer is “no.” A federal district court has no legal or constitutional authority to issue an enforceable seizure warrant directed at property located inside a foreign sovereign nation.

The Territorial Limit of Seizure Warrants

Under Federal Rule of Criminal Procedure 41, Supplemental Rule G(3), and 28 U.S.C. § 1355(d), a court’s process runs throughout the United States, allowing one district judge to order the seizure of property located in “any other district” within the U.S.. It does not run internationally.

A U.S. marshal or federal agent cannot enter a foreign state like Liechtenstein to seize a bank account or hard asset. Doing so violates foreign territorial sovereignty. As the court noted in Nasri, an in rem decree cannot operate in a vacuum abroad without an act of comity from the host government.

The Procedural Mechanism: Letters Rogatory and MLATs

Because a U.S. warrant cannot legally touch foreign property on its own, the government does not execute domestic seizure warrants abroad. Instead, it uses diplomatic and treaty-based tools:

• Mutual Legal Assistance Treaties (MLATs): The DOJ submits an MLAT request or letter rogatory asking the foreign sovereign to issue its own domestic restraining order or freeze under local law.
• Foreign Restraints: The actual freeze or seizure is executed under the sovereign authority of the foreign court (e.g., a Liechtenstein court issuing an order under the Liechtenstein MLAT Act).

The critical question post-Nasri is whether a court has in rem jurisdiction before the property is brought into the U.S. or placed under U.S. control.

Under the majority opinion, the court faces a constitutional sequence problem. Historically, under the plain-text reading of § 1355(b)(2), the DOJ would file the civil forfeiture complaint first, rely on the statutory nexus, and then use that pending action to ask foreign authorities to freeze and repatriate the money.

Under Nasri, a court cannot exercise in rem jurisdiction over foreign property at the outset unless the government already has actual or constructive control.

If the court lacks in rem jurisdiction from day one, it arguably lacks the power to issue any valid in rem orders directed toward that foreign res until constructive control is established.

What Counts as “Constructive Control”?

The panel adopted the Second Circuit’s framework from United States v. All Funds on Deposit in Any Accounts Maintained in the Names of Meza or De Castro, 63 F.3d 148 (2d Cir. 1995)(hereinafter “Meza“), holding that the government does not need physical possession or a binding repatriation treaty, but it must prove that the foreign authority is acting essentially as an agent of the United States.

A simple foreign TRO or an open-ended diplomatic pledge to cooperate under an MLAT is not automatically enough to establish constructive control. If the foreign state retains broad, independent discretion over whether to surrender the funds, constructive control is absent.

The government must show that the foreign freeze was entered solely at U.S. request, has been upheld by the foreign courts, and the foreign government has given concrete assurances that it will hold and deliver the funds upon entry of a U.S. judgment.

The Justiciability and Advisory Opinion Trap

The Narsi concurrence goes further, warning that issuing orders or warrants against property held overseas before the res is secured violates Article III. If the foreign sovereign is under no binding obligation to repatriate the money, any decree or warrant the U.S. court enters is merely an unconstitutional advisory opinion seeking “diplomatic leverage.”

If the government files a civil forfeiture complaint under § 1355(b)(2) and seeks preliminary judicial process against offshore assets without first having the foreign jurisdiction formally lock down the property as an agent of the U.S., the action is subject to dismissal for lack of jurisdiction under the Due Process Clause.

Defense counsel can demand an immediate evidentiary inquiry into the precise terms of the foreign restraint:

• What specific assurances did the foreign authority give?
• Under foreign law, can the host nation release the funds to other creditors or local taxes?
• If the foreign government maintains independent discretion, the federal court lacks jurisdiction to proceed.

In Rem Jurisdiction to Seize Cryptocurrency

The government’s routine practice of serving seizure warrants on offshore cryptocurrency exchanges—which then voluntarily sweep tokens to a government-controlled wallet—relies on an aggressive statutory fiction that Nasri directly destabilizes.

When prosecutors seek an ex parte seizure warrant against assets located abroad before or concurrent with filing a forfeiture complaint, they rely on 18 U.S.C. § 981(b)(3).

Under that statute, a judicial officer in any district where a forfeiture action may be filed under 28 U.S.C. § 1355(b) (i.e., any district where the underlying offense had an act or omission) may issue a seizure warrant.

Section 981(b)(3) explicitly contemplates foreign assets, stating that the warrant “may be executed in any district in which the property is found, or transmitted to the central authority of any foreign state for service in accordance with any treaty or other international agreement.”

Instead of transmitting the warrant through slow diplomatic channels via an MLAT or foreign central authority, federal agents simply email the PDF warrant directly to the compliance department of the offshore exchange (such as Binance, OKX, or Seychelles/Cayman-based entities).

Because these exchanges fear DOJ anti-money-laundering indictments, secondary sanctions, or loss of U.S. correspondent banking, they voluntarily comply. They freeze the user’s account and broadcast an on-chain transaction sweeping the cryptocurrency into a government-controlled cold storage address (typically custody handled by the USMS).

Does the Court Have In Rem Jurisdiction to Issue a Seizure Warrant?

At the ex parte warrant application stage, magistrate judges regularly sign these warrants because:

• Probable Cause Standard: 18 U.S.C. § 981(b)(2) and Fed. R. Crim. P. 41 require only an affidavit establishing probable cause that the tokens represent proceeds of crime or were involved in money laundering/fraud.
• Subject-Matter Jurisdiction: 28 U.S.C. § 1355(a) vests federal courts with broad subject-matter jurisdiction over civil forfeiture offenses.

However, the constitutional question Nasri raises is whether a district court can exercise valid in rem judicial authority over a foreign res when issuing process before actual or constructive custody exists.

Section 981(b)(3) piggybacks directly on 28 U.S.C. § 1355(b). But Nasri held that § 1355(b)(2) cannot constitutionally confer in rem jurisdiction over extraterritorial property without prior actual or constructive control.

As the Nasri court highlighted, § 1355(d) only authorizes nationwide service of process to seize property located in “any other district” within the United States. Congress never gave federal courts the constitutional authority to project extraterritorial in rem process overseas without going through formal diplomatic agency or comity.

If a court lacks constitutional in rem jurisdiction over property situated abroad at the time the warrant is requested, issuing a warrant against that specific foreign property is arguably an advisory act or legally void ab initio.

The Practical Realities and Traps in Crypto Cases

Despite the constitutional defects exposed by Nasri, challenging these crypto seizures involves navigating several procedural dynamics.

Once the exchange bows to DOJ pressure and transfers the tokens to a government-controlled address (a U.S. government unhosted wallet), the government takes actual physical possession of the res.

At the moment the tokens hit the U.S. wallet, the government cures the Nasri in rem defect for any subsequent civil forfeiture complaint, because the res is now physically within the custody of the United States.

In other words, while the issuance and execution of the warrant to a foreign exchange were constitutionally questionable at the inception, the government relies on the completed transfer to claim that in rem jurisdiction exists when the verified civil complaint is formally litigated.

When an offshore exchange surrenders crypto, the government argues it was not an impermissible extraterritorial execution of a U.S. warrant. Instead, the DOJ claims that the exchange “voluntarily” transferred the property under its Terms of Service.

The warrant simply put the custodian on notice of dirty funds, and the custodian chose to relinquish them to avoid being treated as a money-laundering conspirator.

For defense counsel challenging these seizures, Nasri provides grounds to contest the legality of the entire seizure pipeline:

• Motion to Suppress / Motion for Return of Property (Fed. R. Crim. P. 41(g)): The Claimant’s attorney can argue that the magistrate judge lacked jurisdiction under § 981(b)(3) and § 1355(b) to issue a warrant directed at offshore property where no constructive control existed at the time of issuance. If the initial warrant was void ab initio, the resulting transfer was the fruit of an unlawful extraterritorial seizure.
• Challenging Pre-Transfer “Freezes”: In cases where the offshore exchange freezes the account but has not yet swept the crypto to the U.S. Marshals, the DOJ cannot file a § 1355(b)(2) civil forfeiture complaint to forfeit the frozen balance. Under Nasri, an unexecuted freeze by an entity outside U.S. borders does not constitute “constructive control” unless the government proves that the foreign custodian is acting strictly as an agent under enforceable government control.
• Third-Party Standing and Notice: Under the majority’s holding in Nasri, an in rem action against foreign assets without formal seizure violates the due process rights of the rest of the world. When crypto is swept from omnibus or pooled exchange wallets, other claimants (or the exchange itself) cannot simply waive the jurisdictional defects.

This article was last updated on Friday, September 3, 2026.