Crypto Asset Forfeiture in California: How the Government Seizes Digital Assets, and How Owners Fight Back

Federal crypto forfeiture cases have captions that read like typos: United States v. Approximately 2210.8222 of SOL Cryptocurrency.¹ That is not a mistake; it is the architecture. Civil forfeiture is a lawsuit against the property itself, the owner is not a party until they intervene, and intervening runs on deadlines that can be as short as 35 days from a notice letter, or 30 days from a forfeiture.gov posting the owner never saw.²

The stakes have grown with the enforcement program. In June 2025, the Justice Department filed a civil forfeiture complaint against more than $225.3 million in cryptocurrency that the complaint alleges was traced from investment-fraud victims, in what the department’s release called “the largest cryptocurrency seizure in U.S. Secret Service (USSS) history.”³ And since March 2025, an executive order has directed forfeited government bitcoin into a Strategic Bitcoin Reserve whose deposited BTC “shall not be sold,” which tells you something about the government’s institutional appetite for keeping what it takes.⁴

If your crypto was seized (from an exchange account or a hardware wallet, by federal agents or California law enforcement), this guide maps the three separate machines that could be holding it, the deadlines that decide these cases, and the realistic routes back.

Key Takeaways

• Three different machines, three different rulebooks. Federal civil forfeiture sues the coins; federal criminal forfeiture is part of a defendant’s sentence, with a narrow 30-day window for third parties; California state forfeiture is a drug statute that never contemplated a blockchain.⁵
• The deadlines are the case. The government owes notice within 60 days of seizure; your claim deadline can be as short as 35 days from the notice letter; and once you file, the government has 90 days to file a complaint or give the property back, on pain of losing civil forfeiture of that property for that offense unless it indicts instead.²
• Actual notice is not required. A 2026 decision entered default forfeiture of exchange-held crypto after publication on forfeiture.gov and a single direct notice to the one entity the government identified; if your assets touched a compromised platform, that website is not optional reading.⁶
• A remission petition is not a defense. The regulations direct the agency to presume the forfeiture valid and not weigh the evidence; only a verified claim forces the government to prove anything to a court.⁷
• California’s own statute is narrower than people think. Contested state forfeitures under the $40,000 line require proof beyond a reasonable doubt and a criminal conviction, but only if you file the 30-day claim that switches those protections on and then appear as required.⁸⁹

How Does the Government Actually Seize Cryptocurrency?

For crypto on an exchange, seizure is a paperwork exercise. The government obtains a seizure warrant under 18 U.S.C. § 981(b), serves it on the platform, and the platform moves the assets to government-controlled wallets. The venue rule matters more than it looks: the warrant may issue from any district in which a forfeiture action could be filed, not the district where the owner lives, which is why a Californian’s coins so often end up litigated in the District of Columbia.¹⁰

The legal theories are broad. Section 981(a)(1)(A) forfeits property “involved in” a transaction violating the money-laundering or unlicensed-money-transmission statutes and anything traceable to it; § 981(a)(1)(C) forfeits proceeds traceable to a long enumerated list of federal offenses (computer fraud under § 1030 among them) or to any offense constituting “specified unlawful activity,” a definition that carries wire fraud.¹¹ The proceeds definition splits by case type: for “illegal goods, illegal services, unlawful activities, and telemarketing and health care fraud schemes,” proceeds are “not limited to the net gain or profit realized from the offense,” while for “lawful goods or lawful services that are sold or provided in an illegal manner” (the posture of many unlicensed-transmitter cases), proceeds are the money acquired “less the direct costs incurred in providing the goods or services,” with the claimant bearing the burden on direct costs.¹¹ Once seized, the property “shall not be repleviable”: it stays in government custody “subject only to the orders and decrees of the court or the official having jurisdiction thereof,” so there is no self-help route back, only the forfeiture machinery and the release and set-aside motions inside it.¹⁰

Self-custody changes the physics. Coins in a hardware wallet do not move until someone signs a transaction, so the government must obtain the private key or seed phrase (from a device search, a cooperating party, or the owner), and the pressure in those cases falls on compelled production fights rather than forfeiture procedure. The corollary cuts the other way for exchange users: custodial convenience is seizure convenience.

If your exchange account was frozen on legal process, assume a forfeiture clock may already be running somewhere, and find the notice before the notice deadline finds you.

What Deadlines Decide a Crypto Forfeiture Case?

Nearly all of them, and they run in both directions.

{{table:forfeiture-clocks}}

Filing the verified claim is the single highest-leverage act available to an owner, because it does two things at once: it strips the agency of the power to forfeit administratively, and it starts the 90-day statutory clock that requires the government either to file a complaint or to “return the property pending the filing of a complaint,” a clock a court may extend “for good cause shown or upon agreement of the parties,” with a miss barring further civil forfeiture of that property in connection with the underlying offense.² From there the government carries the burden of proving forfeitability by a preponderance, including a “substantial connection between the property and the offense” on facilitation and “involved in” theories alike.¹³

The trap is the notice you never get. In a March 2026 decision, a federal court entered default judgment forfeiting crypto seized from exchange accounts tied to North Korean hacking after the government published notice on forfeiture.gov for thirty consecutive days and sent direct notice to the one entity it identified; the court’s statement of the law is the warning: “Actual notice is not required,” so long as notice was “sent by means reasonably calculated to reach the potential claimant.”⁶

If you have any reason to think your assets were swept into a seizure, search forfeiture.gov for your addresses and exchanges now; the claim windows do not wait for a letter to arrive.

How Do You Get Seized Crypto Back?

Start with what the claim must be, because courts can and do enforce it strictly. A verified claim is a standing document: it must identify the specific property, state the claimant’s interest, and be signed under penalty of perjury, and the claimant must show a “facially colorable interest in the defendant property—such as actual possession, control, title, or a financial stake.”¹⁴ In a September 2025 decision, claimants holding a money judgment against the organization whose funds were targeted lost at the threshold because “[u]nsecured creditors do not have standing to challenge the civil forfeiture of their debtors’ property”; a general claim against a platform or a debtor is not an interest in the specific coins.¹⁵ The same logic runs through the innocent-owner defense, whose definition of “owner” excludes, for that subsection, anyone with “only a general unsecured interest.”¹⁶ Owners who can tie themselves to identified coins and addresses stand; owners who can point only to an account balance struggle.

The merits defenses come next. The innocent-owner defense has two tests keyed to timing: an owner who held the interest before the underlying conduct prevails by showing they “did not know of the conduct giving rise to forfeiture” (or, on learning of it, “did all that reasonably could be expected under the circumstances to terminate such use of the property”), while an owner who acquired the interest afterward must show they were, at the time they acquired the interest, “a bona fide purchaser or seller for value” who “did not know and was reasonably without cause to believe that the property was subject to forfeiture.”¹⁶ The second test is the one that matters for anyone who bought crypto on a secondary market that later turned out to trace to a hack or a fraud. The claimant carries the burden on both.

Know what a remission petition is, and is not. Remission is executive grace, decided without a hearing (by the seizing agency in administrative forfeitures, and by the Justice Department’s asset-forfeiture section in judicial ones), and the regulation is explicit about its posture: “The ruling official shall presume a valid forfeiture and shall not consider whether the evidence is sufficient to support the forfeiture.”⁷ It is a reasonable tool where innocent ownership is clean and litigation is unwanted. It is not a substitute for a claim: in the 2026 default case above, the one identified victim filed a remission petition rather than a claim, and the coins were forfeited by default.⁶

Two more levers round out the playbook. The Excessive Fines Clause applies to forfeitures that are at least partly punitive, under the Supreme Court’s gross-disproportionality standard, and Congress has codified the challenge with the burden on the claimant; since Timbs v. Indiana incorporated the Clause against the states, the argument is available in California state proceedings too.¹⁷ And fee-shifting makes defense economically rational: when a claimant “substantially prevails” in a civil judicial forfeiture, the United States “shall be liable” for reasonable attorney fees and litigation costs.¹⁸ The honest caveats: the fee award yields, among other statutory limits, where “the claimant is convicted of a crime for which the interest of the claimant in the property was subject to forfeiture under a Federal criminal forfeiture law”; the fee statute is keyed to a claimant who “substantially prevails” in a “civil proceeding,” language built for a court rather than an agency-side administrative forfeiture or a remission petition; and its interest provisions are built around Treasury-bill rates on cash, so a claimant whose coins were sold mid-case is unlikely to recover the appreciation they missed.¹⁸

“The verified claim is the whole ballgame. It is the only filing that converts ‘the agency is keeping your coins’ into ‘the government must prove its case to a judge on a deadline.’” ---Brandon Orewyler, Principal, Astraea Counsel APC

If you dispute the forfeiture, file the verified claim and treat remission as a fallback, not a first move; grace and adjudication are different products.

What Does the Strategic Bitcoin Reserve Change?

Posture, not procedure. Executive Order 14233 of March 6, 2025 directs Treasury to establish a Strategic Bitcoin Reserve “capitalized with all BTC held by the Department of the Treasury that was finally forfeited” in forfeiture proceedings or in satisfaction of civil money penalties (less what 31 U.S.C. § 9705 requires or subsection (d) of the order releases), with every other agency told to review its authority to transfer its own government bitcoin in; and its operative sentence is blunt: “Government BTC deposited into the Strategic Bitcoin Reserve shall not be sold and shall be maintained as reserve assets of the United States utilized to meet governmental objectives in accordance with applicable law.”⁴ Read carefully, the order operates on bitcoin that has already been “finally forfeited,” expressly preserves disposition “pursuant to an order from a court of competent jurisdiction” and returns “to identifiable and verifiable victims of crime,” and creates no enforceable rights for anyone.⁴ A claimant cannot sue on it, and it does not change a single deadline.

What it changes is the government’s incentives. The order’s own premise is that the government “holds a significant amount of BTC, but has not implemented a policy to maximize BTC’s strategic position as a unique store of value”; the Reserve reverses that posture, making forfeited bitcoin a designated reserve asset rather than inventory awaiting liquidation.⁴ Owners should draw the practical conclusion: the institutional appetite for keeping forfeited bitcoin is explicit, and the window in which seized coins remain recoverable as coins (rather than as sale proceeds after a court-ordered interlocutory sale, where the proceeds substitute for the property) is a window worth moving inside of quickly.¹⁹

If recovering the coins themselves matters to you, speed matters; a mid-case sale converts your claim into a claim on dollars.

How Is California State Forfeiture Different?

Structurally, and mostly in the owner’s favor, with one enormous catch. California’s civil forfeiture statute is a narcotics statute: Health and Safety Code § 11470 reaches “moneys, negotiable instruments, securities, or other things of value” exchanged for controlled substances, proceeds traceable to such an exchange, and facilitating funds for enumerated drug offenses.²⁰ It does not mention digital assets, and its reach is confined to controlled-substance offenses.²⁰ We have found no California civil-forfeiture statute of general application for fraud, hacking, or money laundering comparable to the federal § 981(a)(1)(A) and (C), and that gap is a large part of why significant California crypto seizures are federal cases.

Where the state statute does apply, the post-2016 reforms give contested cases real protections. Below the $40,000 line, a contested forfeiture requires the government to prove its case beyond a reasonable doubt, and a judgment of forfeiture “requires as a condition precedent” that a defendant be convicted of a qualifying offense.⁸ At or above $40,000 in “cash or negotiable instruments,” the burden drops to clear and convincing evidence and the statute states that no conviction is required.⁸ Whether cryptocurrency counts as a negotiable instrument or a cash equivalent for these thresholds is an unsettled classification question, and the two subdivisions do not use the same list of covered property, which leaves a real seam; treat it as contested ground.⁸

The catch is that every one of those protections attaches only to contested forfeitures. The claim deadline is 30 days, the claim is verified, and if no claim is on file the court declares forfeiture on a prima facie showing, with the statute adding expressly: “There is no requirement for forfeiture thereof that a criminal conviction be obtained in an underlying or related criminal offense.”⁹ Filing is what switches the conviction requirement on. Two features of the state track are genuinely friendlier than federal practice: the forfeiture hearing is to a jury unless waived, and the verified claim is not admissible in the related criminal proceeding, which lowers the Fifth Amendment cost of claiming.⁹

One more California statute reaches crypto in fraud cases without being a forfeiture statute at all. Penal Code § 186.11, the aggravated white collar crime enhancement, lets prosecutors ask the superior court to freeze, and after conviction levy, “any asset or property that is in the control of” a defendant charged either with two or more related fraud felonies taking over $100,000 or with a single fraud or embezzlement felony involving a taking or loss over that same $100,000, including assets “transferred by that person to a third party, subsequent to the commission of any criminal act alleged … other than in a bona fide purchase, whether found within or outside the state,” to pay restitution and fines.²¹ The pendent freeze proceeding is expressly exempt from the Civil Discovery Act, which handicaps a defense that wants to test the government’s tracing.²¹ If your assets are frozen in a California fraud prosecution, this, not § 11470, is probably the statute doing it.

If California agents seized your crypto, calendar the 30-day claim immediately: the beyond-a-reasonable-doubt standard and the conviction requirement exist only for owners who file.

What Should You Do in the Next 30 Days?

First, find every notice: the seizure paperwork, any letter from the agency, and forfeiture.gov searches for your wallet addresses, exchange names, and amounts. Second, calendar every deadline in the table above from the actual trigger dates, and assume the shortest plausible reading. Third, preserve your ownership evidence now: acquisition records, source-of-funds documentation, exchange statements, and wallet-control proof, because both the innocent-owner defense and standing itself run on them. Fourth, decide the posture deliberately with counsel: verified claim (adjudication, burdens on the government, fee-shifting if you substantially prevail) versus remission (discretionary grace, no hearing, forfeiture presumed valid), understanding that only the claim stops an administrative forfeiture. And if there is any parallel criminal exposure, coordinate the forfeiture response with defense counsel before filing anything.

Longer term, the trend line is one-directional: enforcement keeps scaling, tracing keeps improving, and forfeited bitcoin now accumulates in a national reserve rather than flowing back to market. The owners who recover assets are, overwhelmingly, the ones who move inside the deadlines.

Astraea Counsel litigates digital-asset disputes and represents crypto owners and companies responding to seizures and forfeiture actions in federal and California courts. If the government is holding your crypto, talk to our crypto litigation team.

Related Resources

• Crypto Enforcement Tracker 2026
• Recovering Stolen Crypto in California: The Legal Playbook
• Crypto Exchange Subpoenas: How to Get the Records, and How to Fight One
• Responding to an SEC Wells Notice in a Crypto Investigation

This article provides general information for educational purposes only and does not constitute legal advice. Forfeiture law and digital-asset enforcement practice are evolving rapidly. Consult qualified legal counsel for advice on your specific situation.

Footnotes

1. United States v. Approximately 2210.8222 of SOL Cryptocurrency, No. 24-cv-3375 (D.D.C. filed Dec. 3, 2024), docket available at https://www.courtlistener.com/docket/69432259/united-states-v-approximately-22108222-of-sol-cryptocurrency/. ↩

2. 18 U.S.C. § 983(a)(1)(A), (a)(1)(F), (a)(2)(B), (a)(3)(A)-(B), (a)(4), (e), available at https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title18-section983&num=0&edition=prelim. ↩ ↩² ↩³ ↩⁴ ↩⁵ ↩⁶ ↩⁷ ↩⁸

3. U.S. Department of Justice, “United States Files Civil Forfeiture Complaint Against $225M in Funds Involved in Cryptocurrency Investment Fraud Money Laundering” (June 18, 2025), available at https://www.justice.gov/opa/pr/united-states-files-civil-forfeiture-complaint-against-225m-funds-involved-cryptocurrency. ↩

4. Exec. Order No. 14,233, Establishment of the Strategic Bitcoin Reserve and United States Digital Asset Stockpile, 90 Fed. Reg. 11789 (Mar. 11, 2025), available at https://www.federalregister.gov/documents/2025/03/11/2025-03992/establishment-of-the-strategic-bitcoin-reserve-and-united-states-digital-asset-stockpile. ↩ ↩² ↩³ ↩⁴

5. 21 U.S.C. § 853(a), (n)(2), (n)(6) (forfeiture ordered as part of the sentence; third-party ancillary proceeding), available at https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title21-section853&num=0&edition=prelim; 28 U.S.C. § 2461(c) (making § 853’s procedures applicable to all stages of a criminal forfeiture proceeding), available at https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title28-section2461&num=0&edition=prelim. ↩

6. United States v. All Virtual Currency Seized From One MEXC Account Ending in 8248, No. 24-cv-3309 (LLA) (D.D.C. Mar. 17, 2026), available at https://www.courtlistener.com/opinion/10809912/united-states-v-all-virtual-currency-seized-from-one-mexc-account-ending/. ↩ ↩² ↩³ ↩⁴

7. 28 C.F.R. § 9.5(a)(4); see also 28 C.F.R. §§ 9.1(b), 9.3(g), 9.4(g) (ruling officials for administrative and judicial petitions); 28 C.F.R. § 9.1(d) (no rights or entitlements created); 18 U.S.C. § 983(a)(2)(A), (a)(3)(A)-(B) (the claim that supersedes the administrative track), available at https://www.govinfo.gov/content/pkg/CFR-2024-title28-vol1/xml/CFR-2024-title28-vol1-part9.xml. ↩ ↩²

8. Cal. Health & Safety Code § 11488.4(i)(2)-(4), available at https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC&sectionNum=11488.4. ↩ ↩² ↩³ ↩⁴

9. Cal. Health & Safety Code § 11488.5(a)(1), (b)(1), (c)(1)-(2), available at https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC&sectionNum=11488.5. ↩ ↩² ↩³

10. 18 U.S.C. § 981(b)(2)-(3), (c), available at https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title18-section981&num=0&edition=prelim. ↩ ↩²

11. 18 U.S.C. § 981(a)(1)(A), (a)(1)(C), (a)(2)(A)-(B), available at https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title18-section981&num=0&edition=prelim; see 18 U.S.C. §§ 1956(c)(7)(A), 1961(1) (wire fraud, 18 U.S.C. § 1343, is a specified-unlawful-activity predicate), available at https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title18-section1956&num=0&edition=prelim and https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title18-section1961&num=0&edition=prelim. ↩ ↩²

12. 18 U.S.C. § 983(a)(4)(A) (30 days from service of the complaint or from final publication), available at https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title18-section983&num=0&edition=prelim; Fed. R. Civ. P. Supp. R. G(4)(b)(ii)(B), G(5)(a)(ii) (the direct-notice deadline, at least 35 days after the notice is sent, and the 60-day period from first publication on an official internet government forfeiture site), available at https://www.law.cornell.edu/rules/frcp/rule_G. ↩

13. 18 U.S.C. § 983(c)(1), (c)(3), available at https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title18-section983&num=0&edition=prelim. ↩

14. United States v. Fifty-Three Virtual Currency Accounts, No. 20-cv-2227 (RC) (D.D.C. Sept. 25, 2025), available at https://www.courtlistener.com/opinion/10677848/united-states-v-fifty-three-virtual-currency-accounts/; see also Supp. R. G(5) (verified claim requirements), available at https://www.law.cornell.edu/rules/frcp/rule_G. ↩

15. United States v. Fifty-Three Virtual Currency Accounts, No. 20-cv-2227 (RC) (D.D.C. Sept. 25, 2025) (quoting United States v. All Assets Held at Bank Julius Baer & Co., 772 F. Supp. 2d 191, 198 (D.D.C. 2011) (quoting United States v. One-Sixth Share, 326 F.3d 36, 44 (1st Cir. 2003))), available at https://www.courtlistener.com/opinion/10677848/united-states-v-fifty-three-virtual-currency-accounts/. ↩

16. 18 U.S.C. § 983(d)(1), (d)(2)(A), (d)(3)(A), (d)(6), available at https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title18-section983&num=0&edition=prelim. ↩ ↩²

17. Timbs v. Indiana, 586 U.S. 146 (2019) (citing Austin v. United States, 509 U.S. 602 (1993)), available at https://www.supremecourt.gov/opinions/18pdf/17-1091_5536.pdf; United States v. Bajakajian, 524 U.S. 321 (1998), available at https://tile.loc.gov/storage-services/service/ll/usrep/usrep524/usrep524321/usrep524321.pdf; 18 U.S.C. § 983(g). ↩

18. 28 U.S.C. § 2465(b)(1)-(2), available at https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title28-section2465&num=0&edition=prelim. ↩ ↩²

19. Supp. R. G(7)(b) (interlocutory sale; proceeds become the substitute res), available at https://www.law.cornell.edu/rules/frcp/rule_G. ↩

20. Cal. Health & Safety Code § 11470(f), available at https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC&sectionNum=11470. ↩ ↩²

21. Cal. Penal Code § 186.11(a)(1), (d)(1)-(2), available at https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=PEN&sectionNum=186.11. ↩ ↩²