Florida Sheriff told by the court to return over $700k seized crypto

Law enforcement authorities in Volusia County, Florida, have been told by the court to return over $700,000 in cryptocurrency and paid legal fees. The federal officers improperly handled the seizure of assets from a European Union-licensed brokerage firm, according to a public statement issued Tuesday by the Sammis Law Firm. 

The law firm mentioned that the incident involved a $20,000 fraud investigation that began in Waupaca County, Wisconsin. Law enforcement authorities tracked the fraud proceeds to a Kraken crypto exchange account belonging to a legitimate brokerage business. 

Despite the company’s full cooperation and transparency throughout the investigation, the Kraken account was frozen on March 28, 2025.

At the time of the freeze, the account held over $450,000 in crypto, an amount that rose in value to more than $700,000 in the following weeks. On April 9, the Volusia County Sheriff’s Office secured a sealed seizure warrant instructing Kraken to liquidate 1.19121 BTC into US dollars and transfer the proceeds to a law enforcement-controlled wallet.

Client tries to clarify mistaken identity

In the days that followed, the brokerage attempted to obtain more details from Kraken about the conditions of the account freeze. On April 3, 2025, Kraken finally confirmed it was frozen due to a transaction ID flagged by Volusia County Detective Kincaid. 

The client used this information to identify the customer linked to the transaction and sent documentation to authorities to assist in identifying the real perpetrator of the fraud.

On April 10, the brokerage provided additional corporate records and structural details to support its case. Detective Kincaid listed the specific BTC transaction ID that was the subject of concern and issued a copy of a Bitcoin purchase slip for 0.16196522 BTC, valued at $20,000, supposedly tied to the fraud. 

However, the transaction initially flagged and traced to the client’s wallet involved approximately 0.93 BTC, significantly more than the suspected fraudulent transaction.

By April 15, the company had also been contacted by a detective in Volusia County conducting a separate fraud investigation linked to the same wallet address. The firm responded by providing a data package and requesting a video call to clarify the case. 

Kraken insists that it had complied with both orders, but admitted it did not disclose this information to the client until after the funds had been transferred to law enforcement.

Forfeiture process lacked legal basis, attorney says

The law firm representing the brokerage contends the seizure did not follow any of the necessary procedures outlined in Florida’s Contraband Forfeiture Act. According to the firm, nothing was ever filed with the clerk’s office, and the judge who signed the seizure warrant lacked subject matter jurisdiction to do so. 

Additionally, the law enforcement officer executing the order had no legal authority to serve a seizure warrant outside of his jurisdiction.

Attorney Leslie Sammis also mentioned that no formal notice of seizure was created or provided to the brokerage, even though the company had fully cooperated with investigators and shared all necessary contact details. 

Public records request filed 

Following the reimbursement of the crypto, the law firm filed a formal public records request under Chapter 119 of the Florida Statutes. The request asked the Volusia County Sheriff’s Office to produce documents related to the seizure, including any other seizure warrants involving the assets that were directed to the agency.

The request also sought documents that would show any blockchain tracing included with the affidavit supporting the seizure warrant, and any records illustrating the tracing process itself. 

In addition, the firm asked for service returns, inventories of seized assets, any correspondence or responses related to the seizure warrant, and all records connected to the disposition or sale of the property. Specifically, the firm requested a full account of what happened to the funds taken from the brokerage’s Kraken account.

Volusia County officials have not issued any public statements about the case or addressed whether internal policies will be reviewed following the legal fallout.

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