Your Crypto Was Seized by the Government. What Happens Next?

A seizure is not necessarily the final forfeiture

When federal authorities seize cryptocurrency, the first question is not whether the government “owns” it. The first question is what legal process is being used and what interest the person receiving notice is asserting.

A seizure generally places property under governmental custody or control. Forfeiture is the legal process through which the government seeks to establish a right to retain the property permanently. Those concepts are related, but they are not interchangeable.

That distinction matters because a person may encounter federal cryptocurrency seizure in several different procedural settings: administrative forfeiture, judicial civil forfeiture, criminal forfeiture, a criminal investigation in which assets are merely restrained, or a victim-compensation process involving property that has already been forfeited.

The correct response depends heavily on which proceeding exists.

Identify the proceeding before choosing a response

A seizure notice should be read for procedure before it is read for narrative.

Important questions include:

• Which agency seized or controls the cryptocurrency?
• Is there already a federal court case?
• Is the proceeding administrative, civil judicial, or criminal?
• Is the recipient asserting ownership of the seized cryptocurrency, or claiming to be a victim entitled to compensation?
• What deadline appears in the notice?
• Has a forfeiture complaint or indictment already been filed?

Those questions determine what document should be filed, where it should be filed, and what the filing is intended to accomplish.

A claim contesting forfeiture and a petition requesting remission serve fundamentally different purposes. They should not be treated as interchangeable forms.

Administrative civil forfeiture can present an early procedural choice

Under 18 U.S.C. § 983, a person claiming property seized in a qualifying nonjudicial civil forfeiture proceeding may file a claim with the appropriate official. The personal notice establishes the filing deadline, but the statute provides that the deadline cannot be earlier than 35 days after the notice is mailed. A claim must identify the property, state the claimant’s interest, and be made under oath subject to penalty of perjury. No cost bond is required.¹

Filing a proper claim generally forces the government to make a further procedural choice. Section 983 ordinarily gives the government 90 days after a claim is filed to file a judicial forfeiture complaint, return the property pending further proceedings, or take one of the other steps permitted by the statute, including preserving custody in connection with a qualifying criminal forfeiture allegation. Courts can extend certain periods in circumstances provided by the statute.¹

That makes the decision to file a claim significant. It is not simply a letter stating, “This cryptocurrency belongs to me.”

The claimant should be prepared to establish standing and explain the asserted interest in the property. In cryptocurrency matters, that may require more than possession of a screenshot. Relevant evidence may include exchange statements, bank records, wallet records, transaction hashes, tax records, contracts, communications, evidence regarding control of a wallet, and an explanation of the source and destination of the assets.

Judicial civil forfeiture is litigation

Once the government files a federal civil forfeiture complaint, the case generally proceeds as an in rem action governed by Supplemental Rule G and applicable statutes.

Rule G requires the government to provide direct notice to known potential claimants under specified circumstances. The notice must establish a deadline for filing a claim that is at least 35 days after the notice is sent, and Rule G currently requires an answer or Rule 12 motion no later than 21 days after filing the claim. The claim must identify the property, the claimant, and the claimant’s asserted interest and must be signed under penalty of perjury.²

The government can challenge standing. It can also serve special interrogatories concerning a claimant’s identity and relationship to the property. Those procedural rules are particularly important in cryptocurrency cases because possession, beneficial ownership, exchange-account ownership, wallet control, and the transaction record may not align neatly.²

Under § 983(c), in a covered civil forfeiture action, the government bears the burden of establishing forfeitability by a preponderance of the evidence. Where the government’s theory is that the property facilitated a criminal offense or was involved in one, the statute can also require proof of a substantial connection between the property and the offense.¹

The merits of any particular forfeiture theory depend on the statute invoked in the complaint.

Criminal forfeiture is different

Criminal forfeiture is generally part of a prosecution against a defendant rather than a standalone civil lawsuit against property.

For a third party claiming an interest in property subject to criminal forfeiture, the relevant procedure ordinarily occurs through an ancillary proceeding governed by the applicable forfeiture statute and Federal Rule of Criminal Procedure 32.2. That process is designed to adjudicate certain third-party property interests after the court enters the required preliminary forfeiture order.

The central point for a cryptocurrency owner is that a third party should not assume that a civil forfeiture claim form is the appropriate filing simply because the government has custody of the assets.

The posture must be identified first.

Victims, owners, and claimants are not necessarily in the same procedural position

Federal forfeiture law also contains procedures intended to return forfeited assets to victims.

DOJ regulations distinguish, among other things, an owner or lienholder seeking remission and a victim of the offense who does not hold a qualifying present ownership interest in the specific forfeited property. Under 28 C.F.R. § 9.8, victim remission applies to qualifying victims of the offense underlying the forfeiture or a related offense, subject to the regulatory criteria.³

DOJ describes remission and restoration as discretionary procedures for returning forfeited property or proceeds to victims in appropriate circumstances. Restoration generally involves applying forfeited assets toward an existing restitution framework, while remission can provide victim compensation under DOJ’s regulatory process even outside that precise mechanism.⁴

These are not theoretical cryptocurrency procedures. In April 2026, DOJ announced a remission process involving more than $40 million in forfeited assets for potentially eligible victims of the OneCoin fraud.⁵

Blockchain evidence may determine which interest can actually be proved

Cryptocurrency forfeiture cases frequently require reconstruction of the asset’s history.

The blockchain may show transfers to and from a wallet. An exchange may hold records identifying who purchased the asset. Bank statements may establish the fiat source. Communications may explain why a transfer occurred. A forensic analysis may distinguish the claimant’s funds from other flows moving through a cluster.

But a tracing diagram should not be allowed to substitute for the legal issue.

The questions may be: Does the claimant have standing? Is the claimant an owner, lienholder, victim, or some other interested party? Can the claimant establish a legally cognizable interest? Is an innocent-owner defense available under the governing statute? Is the claimant instead seeking compensation for a pecuniary loss caused by the underlying crime?

Those questions should drive the investigation.

For that reason, where cryptocurrency tracing is material to a forfeiture proceeding, the legal theory and forensic analysis should be developed together from the beginning.

Do not let the label “seized” obscure the deadline

The most dangerous assumption in a forfeiture case is that there will be time to sort everything out later.

A person may have compelling evidence of ownership and still face procedural problems if a required claim is not properly or timely filed. Conversely, immediately filing the first available form without understanding the nature of the proceeding can create a different set of problems.

The proper first step is to identify the legal process, calculate the applicable deadline, preserve the transaction and ownership record, and determine precisely what interest is being asserted.