Federal Forfeiture, Restitution & Remission. A government seizure can create a recovery opportunity, but not automatically.

If you have received a notice, start with the date on it

Federal forfeiture runs on deadlines that are short, fixed and generally unforgiving. A notice of seizure will state a period for responding, and that period is measured in days rather than months. Missing it does not usually produce a warning letter; it produces a default.

So if a notice has arrived by mail, by email, or as a publication you were pointed to, the first thing worth doing is identifying which deadline applies to it, because that determines how much of what follows you have time to do properly.

If you have not received a notice but have seen a news report of a seizure connected to the platform that took your money, the position is different: there may be nothing to respond to yet, and the useful work is establishing whether your funds are traceable into what was seized.

Three different routes, frequently confused

People arrive using these words interchangeably. They are not interchangeable, and which one applies changes the filing, the forum, the standard and the deadline.

Remission is an administrative request to the seizing authority’s ruling official to return property, or a share of it, to a victim. It is made under 28 C.F.R. Part 9. It is not litigation, there is no judge, and it is decided as a matter of discretion against published criteria rather than won at trial.

A verified claim contests the forfeiture itself and puts the matter into a judicial proceeding. It is adversarial, it has its own strict timing, and it is the route for someone asserting an ownership interest in the property rather than victim status.

Restitution arises out of a criminal case against a defendant and is ordered as part of a sentence. It depends on there being a prosecution, a conviction and an identified loss, and on the defendant having something to pay with, which is frequently the point at which restitution and forfeiture interact.

The same set of facts can support more than one of these, and they are not mutually exclusive. Choosing among them is a decision made on the specific seizure, not a matter of preference.

What a remission petition actually has to establish

A petition is not a letter explaining what happened. It has to connect your loss to the specific property the government seized, and that connection is the substance of the filing.

In practice it means establishing that you are a victim within the meaning of the regulation, that you suffered a pecuniary loss as a direct result of the offense underlying the forfeiture, and that the property seized is traceable to your loss. That last element is the part that carries most petitions. A narrative of the fraud, however compelling, does not do it. A transaction-level record that follows your own deposits forward to the addresses named in the government’s filing does.

Where the facts support it, a petition can also be framed on an innocent-owner footing under the civil forfeiture statute, which is a different theory with different requirements. Which framing fits is determined by the tracing, not chosen in advance.

The tracing is the petition

This is the part most people underestimate.

The government’s complaint or seizure warrant identifies specific addresses and specific amounts. A petition has to meet that record on its own terms, showing which of your transfers entered the network, how value moved from them, and where it overlaps with what was seized. That is a transaction-by-transaction exercise across what are frequently several chains, with bridges and swap services in the middle that break naive tracing.

Blockchain investigation here is done in house rather than referred to a vendor, which matters for a specific reason: the analysis has to answer the question the petition puts, not produce a general report about where money went. Those are different documents.

It also has to be reproducible. A figure that cannot be derived from the transaction data by someone else is a figure that will not survive scrutiny, and a petition that states one without showing the derivation is weaker than one that declines to state it.

What a blockchain tracing report can and cannot prove Crypto seized by the government: what happens next

What remission does not do

Several things about this process routinely surprise people, and all of them are better known at the start.

Remission is capped at the value of the loss, measured at the time it occurred. Remission for a victim’s pecuniary loss is limited to the fair market value of the property the victim was deprived of, as of the date the loss occurred. The regulation does not provide for appreciation. If the cryptocurrency you sent was worth substantially less then than the seized assets are worth now, the difference is not part of what remission returns.

Collateral expenses incurred in trying to recover the property are not allowed. The regulation disallows both forgone interest and collateral expenses incurred to recover lost property or to seek other recompense. The cost of pursuing a petition is not itself recoverable from the government through it.

It is discretionary. Meeting the criteria makes a petition grantable, not granted. There is no entitlement, and the decision is the ruling official’s.

It is slow. These matters commonly run for a year or more, and often longer where the underlying criminal case is still moving. Silence during that period is normal and is not a signal about the outcome.

Where several victims claim the same fund

Large seizures in these schemes usually have many victims and one pool of property. That is ordinary in this practice and it is not, by itself, a conflict. Remission claims are evaluated independently against each petitioner’s own tracing, with no adversarial proceeding between claimants.

What it does affect is arithmetic. Where the traced claims exceed what was seized, distributions are pro rata, and a petition’s strength is measured against the other petitions as much as against the criteria.

How the work begins

The first conversation is a review of the notice if you have one, what you sent and when, and what records you hold. It is free, it is confidential, and it does not create an attorney-client relationship.

If there is a route, the sequence is generally: establish the deadline, obtain and read the government’s filing, run the trace against the addresses it names, and assemble the petition with the transaction schedule attached as exhibits rather than summarized in prose.

Learn about attorney Agustin M. Barbara and Director of Blockchain Investigations Denis Banchero.

What we cannot tell you

Whether funds are traceable into a particular seizure is a question the work answers, not one that can be answered from a description of the fraud. Sometimes the trace shows a clear overlap. Sometimes it shows the money went elsewhere entirely, and the seizure that prompted the call has nothing to do with your loss.

That second answer is common, and it is worth reaching quickly. Nobody can promise a remission will be granted; the decision belongs to the government and the criteria are applied by them. What can be said is whether the tracing supports a petition worth filing, and that determination is made on records.

Representative matters

• Victim claim analysis
• Transaction and loss documentation
• Petitions for remission or mitigation
• Restitution submissions
• Civil forfeiture claim strategy
• Coordination with prosecutors and seizing agencies
• Tracing support for victim claims
• Innocent-owner claims
• Ancillary criminal-forfeiture petitions
• Deadline and notice review