Can You Recover Seized Bitcoin or NFTs?

Can You Recover Seized Bitcoin or NFTs?

It’s one of the most common questions we hear: “The government took my
crypto-can I get it back?” The answer is: Yes, recovery is possible. Whether your
Bitcoin, Ethereum, USDT, or NFTs were seized by the IRS, DEA, CBP, or another agency, you
may have a path to reclaim your assets. But it won’t happen automatically. You need to
act-strategically and fast.

This article walks you through the process of recovering seized digital assets, how courts
treat crypto vs. other property, and what you can do right now to improve your chances of
success.

Can Crypto Be Returned Like Cash or Cars?

Yes. Legally, cryptocurrency is considered property-not currency. That
means it is subject to civil asset forfeiture law just like a vehicle, a home, or a suitcase full of
cash. But unlike traditional property, digital assets present unique legal and technical
challenges, especially around:

  • Ownership proof
  • Volatility in asset value
  • Access control (private keys, wallets)
  • Liquidity and traceability

Courts have ruled that crypto can be returned if seized unlawfully or
without probable cause. If you file the proper paperwork and defend your ownership, you may
be able to stop the forfeiture-or even reverse it after seizure.

What If My Assets Were Sold or Liquidated?

If your crypto was seized and then sold by the government (often to avoid volatility), you
may be eligible for restitution in fiat-but typically not for any
gains or lost appreciation. You’ll get back what they sold it for, not its current market value.

This is one reason why acting fast is crucial. The longer you wait, the more likely your
assets will be converted or absorbed by the agency’s forfeiture account.

Real Cases of Crypto Being Returned

  • DEA Bitcoin Return: A Florida business owner had 12 BTC seized after
    a transfer from an unverified wallet. After proving the source and business use of the funds, the
    government returned the crypto in 2022.
  • IRS NFT Case: In 2023, an NFT artist had three valuable NFTs seized
    due to mistaken identity linked to a DAO. After documentation, contracts, and evidence of IP
    ownership were submitted, the tokens were returned without litigation.
  • Federal Lawsuit – Successful Reversal: A crypto trader in California filed
    a federal civil rights claim under 42 U.S.C. § 1983 after ICE seized $90,000 in ETH from his
    Ledger wallet. The court ruled the seizure violated the Fourth Amendment and ordered
    restitution.

How to Start the Recovery Process

  1. File a Verified Claim: You have 30 days from the notice to formally
    contest the seizure.
  2. Document Ownership: Provide wallet addresses, transaction logs, and
    acquisition records.
  3. Request Judicial Forfeiture: Don’t let it stay administrative. Force a court
    hearing.
  4. Track the Status: Use the agency’s online portal (e.g., CBP, DEA, or
    IRS) to follow the timeline.

Need a starting point? Our Resources
page includes a downloadable Crypto Recovery Checklist.

What If It’s a Shared Wallet or NFT Collection?

If your seized crypto was part of a DAO, family trust, or joint business wallet, proving your
specific stake is key. Use contracts, statements, or on-chain data to segment your portion. The
government does not automatically credit your share without documentation.

For NFTs, it’s important to show:

  • Proof of creation or purchase
  • Smart contract address and token ID
  • Royalties or platform payout records (OpenSea, Magic Eden, etc.)

What Increases Your Odds of Getting It Back?

  • Fast response: File your claim quickly to block default forfeiture.
  • Clear paper trail: The more verifiable your ownership and source, the
    better.
  • No criminal charges: If you weren’t charged, you have stronger
    leverage.
  • Respectful, documented communication: Keep copies of every
    interaction. Stick to facts, not emotion.

External Resources

Your Crypto Isn’t Lost-Unless You Let It Go

Most people assume they’ll never see their crypto again once it’s taken. That’s exactly what
the system counts on. But you have legal options and real cases show that recovery is
possible. The key is documentation, timing, and standing up for your rights.