Exchanges freeze accounts for reasons that are entirely internal: a failed or expired identity verification, a sanctions screening hit on a counterparty address, a deposit traced to a known scam cluster by a blockchain analytics vendor, a chargeback on a linked bank account, a login from a new country, or a term-of-service violation. These resolve through support and, when support fails, through the arbitration or complaint process in the user agreement. They are frustrating, but manageable.
When it is law enforcement, the silence is often required
If the freeze is connected to a suspicious activity report (law enforcement calls it a SAR), the exchange legally cannot explain it to you. Under 31 U.S.C. § 5318(g)(2), a reporting institution and its personnel may not "notify any person involved in the transaction that the transaction has been reported or otherwise reveal any information that would reveal that the transaction has been reported."
That statute explains the experience nearly every client describes. The support agent is polite, repeats a scripted line, and will not answer the only question you care about. They are not stonewalling you. They are complying with a disclosure ban that carries penalties.
What to do, and what not to do
If your account is frozen, collect everything: the full account history, every notice you received, deposit and withdrawal records, and the identity of every counterparty you dealt with. If your account is locked, you may lose access to your own transaction records, and you will want them.
If the reason for the freeze is something administrative like renewing your KYC, go ahead and update (unless of course you're using a stolen or synthetic ID, or otherwise involved in a fraud; in that case, obviously, call a lawyer).
If it's something more complex, it is best to consult with a lawyer before volunteering an explanation of your transactions.
It's important to proceed carefully because support calls are logged and chat transcripts get produced to law enforcement upon request. An account holder explaining, orally or in writing, to a customer service representative why a series of transfers was legitimate is creating a statement that a prosecutor could read later and use to build a case.
Also, don't move the remaining funds. See below.
"My crypto was seized"
Seizure and forfeiture are two different things, and the distinction controls your deadlines.
Seizure is the taking. Digital assets are typically seized under a warrant, and in practice that means the government gains control of the private keys or directs a custodial exchange to transfer the assets to a government-controlled wallet.
Forfeiture is the process by which the government tries to keep them permanently. It comes in two forms. Criminal forfeiture rides along with a conviction. Civil forfeiture is an action against the property itself and does not require that anyone be charged with anything. But civil forfeiture still requires a civil AUSA to prove by a preponderance of the evidence that the seized property is connected to a crime.
Deadlines
For seizures governed by the Civil Asset Forfeiture Reform Act, 18 U.S.C. § 983 sets the clock:
The government must send you notice "in no case more than 60 days after the date of the seizure." If a state or local agency seized the property and it was adopted federally, the outer limit is 90 days.
You must file a claim by the deadline in the notice letter, which "may be not earlier than 35 days after the date the letter is mailed." If you never received the letter, you generally have 30 days from the final publication of notice.
Once you file a valid claim, the government has 90 days to file a judicial forfeiture complaint or return the property, subject to extension for good cause or by agreement.
The 35-day claim deadline is where cases are lost. It arrives in an envelope that people mistake for junk mail. It contains a form inviting you to file a petition for remission. Filing the wrong form, or filing nothing while you wait to see whether you get charged, can end your claim to the property before anyone has proven anything. If you do nothing, the property is administratively forfeited and it is over.
A caution on scope. CAFRA's definition of a covered "civil forfeiture statute" in § 983(i) expressly excludes forfeitures under the Internal Revenue Code, Title 19 customs provisions, the Food, Drug, and Cosmetic Act, and sanctions statutes including IEEPA and the Trading with the Enemy Act. If your seizure arises under one of those, a different and sometimes shorter set of rules applies. Check which statute is on your notice before you calendar anything.
Getting property back
Rule 41(g) of the Federal Rules of Criminal Procedure allows a person aggrieved by an unlawful seizure or by deprivation of property to move for its return. There are other ways as well. Depending on the case, the better routes can be a negotiated release of assets not traceable to the alleged offense, a challenge to the tracing analysis itself, or a hardship release.
Some mistakes that make crypto cases worse
Moving the funds. Transferring assets after you learn of a subpoena, a freeze, or a seizure can support an obstruction theory under 18 U.S.C. § 1512(c), and routing them through a mixer, a chain-hop, or a privacy coin can support a concealment money laundering theory under 18 U.S.C. § 1956(a)(1)(B)(i). Blockchain forensics will reconstruct exactly what you did and exactly when you did it, and the timestamps will sit next to the date on the notice. A defensible transaction history can become a bad one in an afternoon.
Deleting messages. Telegram, Discord, Signal, and Slack histories exist on other people's devices and on servers you do not control. Deleting your copy destroys your own exculpatory context and creates a separate offense.
Talking to agents without counsel. Agents who knock on your door already know most of the answers. The interview is not an information-gathering exercise. Under 18 U.S.C. § 1001, a false statement in that conversation is a felony independent of whatever they came to ask about, and it is a charge that gets added to cases that would otherwise have been thin.
Explaining yourself to the exchange. Covered above. Every word is discoverable.
Assuming that no charge means no case. Crypto investigations run long. Tracing takes time, foreign exchanges require MLAT requests, and cooperating witnesses get worked through in sequence. The quiet stretch in the middle is when defense work is most effective and when clients are least motivated to do it.
What the government is usually looking at
In crypto matters, the charges that recur most are operating an unlicensed money transmitting business under 18 U.S.C. § 1960, money laundering under 18 U.S.C. §§ 1956 and 1957, wire fraud under 18 U.S.C. § 1343, conspiracy under 18 U.S.C. § 371, and tax offenses. Peer-to-peer traders are frequently surprised by § 1960, which does not require that the underlying funds be criminal proceeds and does not require that you thought of yourself as running a business. Which theory the government is pursuing shapes everything about the response. It is knowable, and finding out is one of the first jobs.
Frequently asked questions
Does an exchange like Coinbase tell you if it receives a subpoena for your account?
They might, but NDOs prevent disclosure. Coinbase and several other major exchanges notify customers of legal process as a matter of policy and generally give a short window before responding. They are not required to, and a court can bar them from doing it under 18 U.S.C. § 2705(b) if notice would jeopardize the investigation.
Can I stop my exchange from turning over my records?
Generally no. Courts tend to treat exchange records as third-party business records outside the Fourth Amendment's protection, including the Fifth Circuit in United States v. Gratkowski, 964 F.3d 307 (5th Cir. 2020).
Why won't my exchange tell me why my account is frozen?
If a suspicious activity report is involved, it cannot. 31 U.S.C. § 5318(g)(2) prohibits a financial institution from revealing that a transaction has been reported. Many freezes, however, are ordinary compliance or fraud holds with no government involvement at all.
Can I get seized crypto back?
Sometimes, and the path depends on the statute under which it was taken. Under CAFRA you must file a claim by the deadline in your notice letter, which may be as short as 35 days from mailing. Rule 41(g) of the Federal Rules of Criminal Procedure provides another route. Missing the claim deadline can forfeit the property administratively without any court ever evaluating the merits.
Can the government keep my crypto without charging me with a crime?
Yes. Civil forfeiture proceeds against the property rather than the person and does not require a conviction or even an indictment- but civil AUSAs must still prove that seized property is connected to a crime.
How long does the government have to charge me?
The general federal limitations period is five years from the date of the offense under 18 U.S.C. § 3282(a), with exceptions for specific offenses. Long silences in crypto investigations are common and do not mean the matter is closed.
Do I need a lawyer if I only received a notice and nothing else has happened?
That is the best moment to have one. The work that changes outcomes in these cases, scoping the production, identifying the theory, reaching the prosecutor before a charging decision, is only available before charges exist.
Talk to someone before you do anything else
If you have received a subpoena notice from an exchange, lost access to an account, had digital assets seized, or been contacted by a federal agent, the sequence of your next few decisions matters more than the facts you are worried about.
Brooke Watson, a decorated and seasoned former federal prosecutor who served in senior leadership positions in the US Attorney’s Office for the Southern District of Florida (Miami), represents individuals and companies in white collar criminal matters, crypto litigation, internal investigations, regulatory inquiries, and complex litigation. She teaches AI, technology and cybersecurity law as an adjunct professor in the Juris Master program at Florida State University College of Law, and is admitted to practice in Florida and Massachusetts.
This article is general information about federal law and procedure. It is not legal advice, and reading it does not create an attorney-client relationship. Deadlines and procedures vary by statute and by district. If any of the situations described above apply to you, consult a lawyer about your specific facts.
