Crypto Seizure: What Happens When Governments Take Your Crypto

When you hear crypto seizure, the legal process where authorities take control of cryptocurrency assets tied to illegal activity. Also known as crypto confiscation, it’s not just a theoretical risk—it’s happened to thousands of people and dozens of projects. The U.S. Treasury’s OFAC sanctions, for example, don’t just blacklist wallets—they freeze them, wipe out balances, and shut down entire networks. In 2025, North Korean hackers lost over $2 billion in stolen crypto to U.S. asset freezes, and Myanmar scam operators saw their exchange accounts frozen overnight. This isn’t sci-fi. It’s policy.

OFAC sanctions, a U.S. government tool used to block financial transactions with entities linked to crime, terrorism, or authoritarian regimes are the main driver behind modern crypto seizures. They don’t need a court order. They just add a wallet address to a list, and every exchange, wallet provider, or payment processor that follows U.S. law has to cut it off. That means your tokens vanish from trading pairs, your airdrops get blocked, and your funds become unspendable—even if you didn’t do anything wrong. The same thing happened to the crypto confiscation, the broader term for when authorities seize digital assets through legal or extralegal means of Altsbit’s users after its 2020 hack: the exchange collapsed, and victims had no legal path to recover anything. No court in the U.S. will help you if your wallet is on OFAC’s list.

It’s not just about criminals. Even legitimate projects get caught in the crossfire. When China banned crypto trading in 2021, thousands of wallets were quietly frozen by global exchanges complying with U.S. pressure. Brazil now requires every crypto transaction over $10,000 to be reported—making it easier for authorities to flag and seize suspicious funds. And if you’re holding a token tied to a sanctioned entity, like the fake Videocoin by Drakula or the dead Bounty Temple token, you’re not just holding junk—you’re holding a liability. Exchanges can and will freeze those accounts without warning.

What’s worse? There’s no appeal. No customer support line. No refund policy. Once your crypto is seized, it’s gone unless you’re a well-funded entity with lawyers and public relations teams. The people behind Hero Arena, Ancient Kingdom, and SHREW all thought their tokens were safe. They weren’t. When the hype died and regulators looked closer, the projects vanished—and so did their users’ assets. The same fate awaits any token tied to fraud, anonymity tools, or sanctioned jurisdictions.

So if you’re holding crypto, ask yourself: is this asset clean? Is the team known? Is the project listed on any exchange that follows U.S. rules? Because if it’s not, you’re not just taking market risk—you’re taking legal risk. The posts below show you exactly how crypto seizures have played out: which wallets got frozen, which exchanges collapsed under pressure, which airdrops were shut down before they even launched, and who got caught when the law caught up. You won’t find hype here. Just facts. And the hard truth: if you don’t understand how seizure works, you’re already one step behind.