Florida Court Orders Return of $700,000 Improperly Seized Crypto

A Florida sheriff has been ordered by a court to return over $700,000 in cryptocurrency that had been improperly seized from a European Union-licensed brokerage firm. The court ruled that the seizure violated legal procedures outlined in Florida’s Contraband Forfeiture Act, and the funds must now be returned along with associated legal fees. The brokerage had fully cooperated with investigators but was unfairly targeted during a fraudulent transaction investigation that began in Wisconsin [1].

The incident originated from a $20,000 fraud case in Waupaca County, Wisconsin. As part of the investigation, authorities traced the fraudulent proceeds to a Kraken account belonging to the brokerage firm. On March 28, 2025, the account was frozen, containing over $450,000 in crypto at the time. The value later rose to more than $700,000. On April 9, a sealed seizure warrant was issued by the Volusia County Sheriff’s Office, instructing Kraken to liquidate 1.19121 BTC into USD and transfer the funds to a law enforcement-controlled wallet [1].

The brokerage attempted to clarify the situation by providing documentation to identify the actual perpetrator of the fraud. Despite these efforts, authorities proceeded with the seizure, which involved a BTC transaction significantly larger than the suspected fraud amount. On April 10, the firm provided additional records to support its claim, and by April 15, another detective from Volusia County had reached out regarding a separate investigation involving the same wallet address [1].

The law firm representing the brokerage argued that the seizure lacked a legal basis and did not follow proper procedures. No documents were filed with the clerk’s office, and the judge who signed the seizure warrant was found to lack jurisdiction over the matter. Additionally, the law enforcement officer executing the order had no authority to act outside his jurisdiction. The firm also highlighted that the brokerage had not received any formal notice of seizure, despite its full cooperation [1].

Following the court’s ruling to return the funds, the law firm filed a formal public records request under Florida Statutes Chapter 119. The request sought detailed documentation related to the seizure, including blockchain tracing data, service returns, and records of asset disposition. This step is intended to shed light on how law enforcement handled the case and whether there were broader procedural issues in similar operations [1].

Volusia County officials have not commented publicly on the case or confirmed whether internal policies will be reviewed. The sheriff’s office has stated that it is complying with the court’s order, and the return of the assets is expected to be completed in the coming days. The firm has emphasized the need for clearer legal guidelines to prevent similar incidents in the future [1].

As cryptocurrency continues to be integrated into the financial system, this case highlights the challenges law enforcement faces in applying traditional legal frameworks to digital assets. The court’s decision may set a precedent for how similar cases are handled in the future, reinforcing the importance of due process and legal accountability in the use of seizure powers. It also raises concerns about the balance between law enforcement’s investigative needs and the rights of asset holders in the digital space [1].

Source: [1] Mitrade - [https://www.mitrade.com/insights/news/live-news/article-3-998570-20250731](https://www.mitrade.com/insights/news/live-news/article-3-998570-20250731)