Big Problems for Florida’s Cyber Fraud Unit Seizing Cryptocurrency for Forfeiture

What if Florida’s Attorney General wanted to create its own cryptocurrency “strategic reserve”? It could train law enforcement officers across the state to look for scams involving cryptocurrency. Those scams include overseas fraudsters calling Florida residents to convince them to put cash into a virtual currency kiosk. Many of those scams target the elderly.

After the fraudster obtains the victim’s cryptocurrency, they launder the cryptocurrency by selling it to “innocent purchasers for value” as part of a series of transactions in different exchanges. The fraudster often makes at least five transfers within the first 20 minutes after the fraud occurs.

Eventually, the tainted asset ends up in the wallet of an innocent purchaser who leaves it sitting in their account without knowing there is any cause for concern. Small parts of the tainted asset might be divided up across hundreds of accounts owned by innocent purchasers.

An investigator could review all the accounts to pick one with the largest balance on an exchange that is most likely to comply with the seizure warrant. Federal investigators know better than to seize cryptocurrency from innocent purchasers. Doing so would be immoral. Additionally, federal judges would eventually issue rulings that would prohibit such actions.

But in Florida, no such caution is being applied. Investigators with the local law enforcement agencies, the Office of Financial Regulation (OFR), and the Cyber Fraud Unit of the Florida Attorney General’s Office of Statewide Prosecution might look through those hundreds of innocent owners’ accounts until they find one with a big balance holding funds on a cooperative international virtual asset service provider (“exchange”) like Binance, Coinbase, or MEXC.

Exchanges like Binance, Coinbase, or MEXC will comply with seizure warrants issued by the federal government or any state government. The federal government has a statutory scheme that allows such seizure warrants to be legally issued. Most states, including Florida, do not have such legal authority. Nevertheless, seizure warrants with a judge’s signature are often being honored.

Although federal investigators are experienced, well-trained, and cautious when seizing cryptocurrency, investigators in Florida’s new Cyber Fraud Unit of the Florida Attorney General’s Office of Statewide Prosecution have little experience, training, or caution. The AG’s office can stack the odds in its favor by not issuing a “notice of seizure” or refusing to set a timely adversarial preliminary hearing when the Claimant requests it correctly.

Most of the account holders impacted live overseas. Some do not speak English. Even if they determine which Florida agency seized their account, many struggle to find an experienced civil asset forfeiture attorney in Florida who is knowledgeable about cryptocurrency seizures. Even if they find an attorney, most cannot afford to hire that attorney, as all of their assets have just been seized. To address this issue, the attorney could take the case on a contingency fee basis, meaning that any attorney fees are paid as a percentage of the seized property returned.

For the few that do hire an attorney, the Florida Attorney General’s Office of Statewide Prosecution can issue an arrest warrant as soon as they file a demand for an adversarial preliminary hearing, judicial claim, motion to dismiss, or answer to the complaint. Doing so would not be in good faith since the AG’s office often has evidence that the account holder had nothing to do with the original fraud (other than having a small portion of allegedly tainted cryptocurrency in their account).

But by acting in bad faith to get an arrest warrant, the AG’s office can file a motion to strike the Claimant’s pleadings, alleging that they are a “fugitive” from justice under Florida’s fugitive disentitlement doctrine. Florida judges often trust the Florida Attorney General’s Office of Statewide Prosecution. So the judges blindly sign orders without conducting any research or analyzing the issues. Those issues include:

1. The Law Enforcement Agency Has No Authority to Seek a Seizure Warrant Outside its Territorial Jurisdiction
   • § 30.15(1)(b), Florida Statutes, prohibits a sheriff’s office (or any local law enforcement agency) from executing a seizure warrant outside of its territorial jurisdiction.
   • This statute limits the authority of a sheriff’s office to its own county.
   • If a seizure warrant is issued or served outside the sheriff’s lawful geographic authority, any resulting seizure is potentially unlawful and void, undermining subject matter jurisdiction in civil forfeiture proceedings.
   • Exception: The sheriff might lawfully execute or serve warrants in another county or out-of-state, if expressly authorized by a Florida statute or a multi-jurisdictional task force agreement.
2. The Judge Has No Authority to Sign a Seizure Warrant without Subject Matter Jurisdiction
   • Forfeiture is an in rem action that requires the court to have actual or constructive control over the property. If the asset is not located within the jurisdiction, the court lacks subject matter jurisdiction to sign the seizure warrant. Burns v. State, 147 So. 3d 95 (Fla. 5th DCA 2014)
   • Seizing cryptocurrency from any exchange located outside its jurisdiction would be prohibited due to a lack of subject matter jurisdiction.
   • As a result, all exchanges should refuse to cooperate with any seizure warrant coming from a Circuit Court Judge in Florida, unless the exchange is located in the same county as the Circuit Court judge.
     • Exception: The only virtual asset service provider (“exchange”) located in Florida is Binance.us, which is located in Miami. Theoretically, if the tainted asset is held in an account at Binance.us, could the AG’s office could avoid the subject matter jurisdiction issue by requesting the seizure warrant from a judge in Miami-Dade County?
   • Neither the cryptocurrency account nor the cryptocurrency within the account would qualify as a monetary instrument.
   • If the seized property is not a ‘monetary instrument’ or other qualifying asset under the statute, it cannot be seized or forfeited under the Florida Contraband Forfeiture Act.
3. No Nexus Between Alleged Victim’s Funds and Seized Cryptocurrency
   • § 932.703(2)(a), Fla. Stat., requires a nexus between the victim’s funds and the seized cryptocurrency.
   • Without a sworn showing that the seized assets are traceable to the proceeds of unlawful activity, there is no basis for forfeiture.
   • A lack of nexus undermines the core requirement of the statute.
4. Use of Unsworn Statements in Ex Parte Motion for Seizure
   • § 932.703(2)(a), Fla. Stat. requires a “sworn affidavit”
   • When considering the application for probable cause, the court may not rely on unsworn allegations to make findings of probable cause.
   • In many cases, the law enforcement officers who complete the affidavit have no firsthand knowledge of any of the allegations in the application for the probable cause determination.
5. Search Warrant Executed Outside 10-Day Rule Found in § 933.05, Fla. Stat.
   • § 933.05, Fla. Stat. requires the seizure warrant to be executed within 10 days, which provides a clear procedural protection against stale or unsubstantiated enforcement action.
   • In many of these cases, the exchange takes more than 10 days to respond to the seizure warrant issued in Florida.
6. Not Filing the Motion for Probable Cause Determination within the Ten (10) Day Statutory Deadline Required by § 932.703(2)(a), Fla. Stat.
   • Since this deadline is mandatory, missing it deprives the court of jurisdiction. Florida’s Attorney General cannot proceed with forfeiture without first establishing that it applied for the probable cause determination within the time required by statute.
7.  Improper Delegation of Forfeiture Power to AG’s Office
   • § 30.15(1), Fla. Stat.
8. Inapplicable Federal Statutes Cited in State Court
   • Florida law governs state forfeiture proceedings, including the Florida Contraband Forfeiture Act; Chapter 934, Fla. Stat.
   • Reliance on inapplicable federal laws, such as 18 U.S.C. § 2703, misleads the court and may result in improper seizures or rulings.

If your cryptocurrency was seized in Florida, give us a call to discuss the case. Call 813-250-0500.

Claimant’s Interrogatories with Florida Seizes Cryptocurrency

In these cases, filing interrogatories is the most effective ways to obtain information. Those interrogatories might request the following:

Pursuant to Fla. R. Civ. P. 1.340, the Claimant, through undersigned counsel, propounds the following interrogatories to the Petitioner, STATE OF FLORIDA, OFFICE OF THE ATTORNEY GENERAL, DEPARTMENT OF LEGAL AFFAIRS. Each interrogatory must be answered separately and fully, in writing, and under oath, within thirty (30) days of service.

DEFINITIONS

“Seized Account” refers to the Binance Account UID #_______ associated with Claimant.

“Tracing Software” means any blockchain analysis software (including TRM Labs, Chainalysis, or BlockAudit/B.A.T.S.) used in connection with this investigation.

“Trace” or “Tracing Report” refers to any blockchain path analysis, cluster analysis, or report used to identify alleged proceeds of crime linked to the Seized Account.

“Victim” refers to ________ or any other individual whose funds are alleged to have been victimized in this case.

INTERROGATORIES

1. Identify each blockchain analysis tool or software used in tracing the victim’s alleged funds to the Seized Account, including vendor name, software version, and analyst user.
2. State whether the B.A.T.S. (Block Audit Tracing Standard) methodology was used, in whole or in part, and identify the agency or entity that provided such training or certification.
3. State whether TRM Labs or Chainalysis software was used and, if so, specify each chain, date range, and transaction ID analyzed.
4. Identify each detective, analyst, or law enforcement officer who conducted or supervised the tracing analysis.
5. Identify all vendor trainings or certifications held by the person(s) performing the analysis, including course title, provider, and date of completion.
6. Describe in detail the process by which any blockchain addresses were associated with the Claimant’s Account # _______________.
7. State the total amount (in USDT or equivalent) the Petitioner contends is directly traceable from the victim to the Seized Account.
8. Identify each hop or transaction linking the victim’s wallet to the Seized Account, including the number of hops and the cumulative variance in token value.
9. Describe how the Petitioner determined that the funds were not commingled with other unrelated deposits before reaching the Seized Account.
10. Identify all off-chain records or data (such as Binance deposit address logs or user KYC information) relied upon to establish that the victim’s transaction was credited to Claimant’s UID.
11. State whether any other Binance accounts were analyzed in connection with this trace and whether those accounts contained transactions involving the same wallets.
12. Describe all standards, written procedures, or protocols followed to validate the blockchain analysis prior to filing the probable cause motion.
13. Identify all individuals who reviewed, approved, or signed the Affidavit of Detective Adam Freitas before submission.
14. Identify each communication between law enforcement and Binance concerning this seizure, including date, participants, and method of contact.
15. State whether any part of the analysis relied on heuristic clustering, address labeling, or inferred ownership, and describe the criteria used.
16. Identify all case numbers, investigations, or forfeiture actions involving the same wallets or cluster addresses cited in this case.
17. State whether any law enforcement agency outside Florida participated in or contributed tracing data to this case.
18. Identify the total balance of the Seized Account at the time of freeze and the percentage Petitioner contends represents victim-derived funds.
19. Describe how the Petitioner calculated or verified the alleged dollar value of the seized cryptocurrency.
20. Identify all documents, reports, or communications reviewed by the affiant or prosecutor before concluding there was probable cause to seize the Seized Account.

Claimant’s Request for Production

In these cases, filing a request for production is an effective ways to obtain information. Those interrogatories might request the following:

Pursuant to Fla. R. Civ. P. 1.350, Claimant requests that Petitioner produce the following documents for inspection and copying within thirty (30) days of service.

REQUESTS TO PRODUCE

1. The complete blockchain tracing report(s) relied upon to support the seizure, including all exported data tables, hop maps, or graphical charts.
2. All records or correspondence between law enforcement and Binance (Nest Services Limited) regarding UID #_______.
3. All subpoenas, preservation requests, or legal process issued to Binance or any other exchange.
4. All data, spreadsheets, or screenshots generated by TRM Labs, Chainalysis, or BlockAudit software in this case.
5. Any reports or printouts showing the addresses, transaction IDs, or timestamps linking the victim’s wallets to Claimant’s UID.
6. Any written protocols, manuals, or criteria (including B.A.T.S. Desk Reference or equivalent) used in performing or reviewing blockchain analysis.
7. Any training materials, PowerPoints, or vendor handouts provided by BlockAudit, TRM Labs, or Chainalysis to any law enforcement officer in this case.
8. All communications, emails, or chat logs between CCSO, FDLE, the Attorney General’s Office, and any outside consultants regarding the seizure or tracing.
9. All written notes, memoranda, or correspondence between Detective ___________ and _____________ relating to the tracing analysis.
10. All drafts, revisions, and attachments to the Affidavit of Detective ________.
11. All documents showing the Binance deposit address that allegedly received funds from any wallet associated with the victim.
12. All Binance user or KYC records identifying Claimant’s UID and showing any deposits, withdrawals, or trades between ____ and ____ of 2025.
13. All internal communications within the Attorney General’s Office relating to this seizure, probable cause motion, or forfeiture strategy.
14. All communications with any federal agency (FBI, HSI, Secret Service, etc.) regarding the Claimant’s Binance or related wallets.
15. Any forensic validation reports, peer reviews, or QA/QC forms for the tracing analysis.
16. Any screenshots or data exports showing balances of the Seized Account as of [date].
17. All receipts, transaction IDs, and blockchain addresses associated with the victim’s Bitcoin ATM deposit.
18. Any reports or correspondence showing whether the seized Binance account contained deposits from unrelated victims or transactions.
19. Any TRM Labs or Chainalysis project files, including metadata or hash verification logs.
20. Any correspondence with BlockAudit, TRM Labs, or Chainalysis representatives discussing this case or providing analytical assistance.

This article was last updated on Friday, October 17, 2025.