U.S. authorities file a lawsuit to confiscate BTC-e crypto assets

The U.S. government has filed a civil forfeiture case targeting the crypto assets of BTC-e — one of the largest exchanges back in 2013–2017, shut down during an American law enforcement operation.

By 2025, U.S. regulators should have a pretty good understanding of what cryptocurrency is and how it works. So if they’re filing a lawsuit to confiscate crypto, that means they already have a plan for how to do it.

I suspect they’ll follow a path that has already been tested in U.S. courts. I mean the ruling which stated that anyone receiving Bitcoin from certain blacklisted addresses must freeze those funds.

That approach to confiscation doesn’t seem impossible. If a court decides that BTC-e’s Bitcoins should be transferred to the U.S. government, then anyone who receives those coins could be legally required to hand them over to the new “rightful” owner — the U.S. authorities.

Still, when it comes to Bitcoin, that strategy looks a bit naive. Any holder can move their BTC into a Lightning Network channel where the counterparty is outside U.S. jurisdiction — and Lightning transactions are untraceable on-chain.

If someone uses rabbit.io to swap Bitcoin from the Lightning Network into another crypto, there’s simply no way for us (or anyone) to know which on-chain address those coins originally came from.

And that’s the irony: governments still don’t fully understand how cryptocurrency actually works.