IRS Roundup: June 3 – 17, 2025
Check out our summary of significant Internal Revenue Service (IRS) guidance and relevant tax matters for June 3, 2025 – June 17, 2025.
Commissioner update
June 16, 2025: Billy Long was sworn in as the 51st IRS Commissioner after having been confirmed by the US Senate on June 12. Long served as a US Representative for Missouri’s 7th congressional district from 2011 to 2023. His term will run through November 12, 2027.
IRS guidance
June 12, 2025: The IRS has announced that it is experiencing a delay in processing electronic payments and that some taxpayers are receiving notices indicating a balance due even though payments were timely made.
Taxpayers who receive a balance due notice but electronically paid the tax they owed in full and on time do not need to respond. The IRS has said that any associated penalties and interest will be automatically adjusted once the payment(s) are applied correctly.
June 12, 2025: The IRS released Tax Tip 2025-39, reminding businesses about the Childcare Tax Credit. Taxpayers may receive a credit of up to $150,000 per year to offset 10% of qualified childcare resource and referral costs and 25% of qualified childcare facility costs.
To be eligible for the credit, an employer must have paid or incurred qualified childcare costs during the tax year to provide childcare services to employees. Employers should complete Form 8882, Credit for Employer-Provided Childcare Facilities and Services, to claim the credit. The credit is subject to the carryback and carryover rules for business credits.
June 12, 2025: The IRS issued Notice 2025-33, extending for an additional year the transitional relief provided in Sections 3.01, 3.02, and 3.06 of Notice 2024-59. Notice 2025-33 provides transitional relief from penalties with respect to certain information reporting obligations under Section 6045 and provides transitional relief from the liability for the payment of backup withholding tax required to be withheld under Section 3406 and its accompanying regulators.
This notice also provides transitional relief from penalties for brokers who fail to pay that tax with respect to certain sales of digital assets required to be reported under Section 6045, as well as a digital asset sale relief for certain customers that have not been previously classified by the broker as US persons.
June 13, 2025: The IRS issued Notice 2025-35, providing guidance on the corporate bond monthly yield curve, corresponding spot segment rates under Internal Revenue Code (Code) Section 417(e)(3), and the 24-month average segment rates under Code Section 430(h)(2). The notice also provides guidance on the interest rate for 30-year Treasury securities under Code Section 417(e)(3)(A)(ii)(II) (for plan years in effect before 2008) and the 30-year Treasury weighted average rate under Code Section 431(c)(6)(E)(ii)(I).
June 17, 2025: The IRS issued Revenue Ruling 2025-13, providing prescribed rates for federal income tax purposes for July 2025, including but not limited to:
Short-, mid-, and long-term applicable federal rates for July 2025 for purposes of Code Section 1274(d).
Short-, mid-, and long-term adjusted applicable federal rates for July 2025 for purposes of Code Section 1288(b).
The adjusted federal long-term rate and the long-term tax-exempt rate, as described in Code Section 382(f).
The federal rate for determining the present value of an annuity, an interest for life, a term of years, a remainder, or a reversionary interest for purposes of Code Section 7520.
June 17, 2025: The IRS published improvements to its Pre-Filing Agreement (PFA) program to provide greater tax certainty for large business and international taxpayers. The PFA program allows taxpayers under the Large Business and International Division jurisdiction to resolve potential tax issues before filing their return. The program is meant to offer certainty, reduce audit risk, and encourage voluntary compliance.
Key enhancements include:
A redesigned PFA landing page with program statistics, a streamlined process overview, and direct navigation to dispute prevention resources.
New step-by-step instructions to submit a PFA request, including response time expectations and post-submission next steps.
A dedicated PFA page regarding Likely Suitable Issues and Relevant Documents will help taxpayers identify if a PFA request is appropriate for their situation.
Updated program guidelines to help businesses strategically align their PFA submissions with tax filing deadlines.
The IRS also released its weekly list of written determinations (e.g., Private Letter Rulings, Technical Advice Memorandums, and Chief Counsel Advice).
Lindsay Keiser, a summer associate in the Washington, DC, office, also contributed to this blog post.
STIR(red) and SHAKEN: How McLaughlin is Changing TCPA and TRACED Act Enforcement
Well, well, well—McLaughlin Chiropractic v. McKesson has truly stirred up the legal landscape—or better yet, shaken an imbalanced tower of FCC interpretations and court splits surrounding one of the most litigated federal statutes: our beloved TCPA. And TCPAWorld is no stranger to this ever-shifting landscape—or the tangled web of regulations that define both compliance and the defense of what has become a cash cow of litigation.
In McLaughlin Chiropractic v. McKesson, the Supreme Court held that the Hobbs Act does not bind district courts in civil enforcement proceedings to an agency’s interpretation of a statute. Rather district courts must independently determine the law’s meaning under ordinary principles of statutory interpretation while affording appropriate respect to the agency’s interpretation. And for companies navigating the FCC’s STIR/SHAKEN framework under the TRACED Act, that’s a big deal.
The TRACED Act (Telephone Robocall Abuse Criminal Enforcement and Deterrence Act) was Congress’s response to the flood of illegal robocalls and spoofed caller IDs. It gave the FCC stronger enforcement tools and required STIR/SHAKEN (Secure Telephone Identity Revisited and Signature-based Handling of Asserted Information Using toKENs) protocols, which require voice service providers to digitally sign and verify caller ID information, making it harder for bad actors to disguise their numbers..
Until now, challenging the FCC’s interpretation of the TRACED Act or its implementation of STIR/SHAKEN was considered nearly impossible at the district court level. The Hobbs Act gave federal court of appeals exclusive jurisdiction to review FCC orders, and many courts treated the agency’s interpretations as binding—regardless of context.
That’s where McLaughlin makes a difference because district courts now have greater freedom to evaluate how the FCC reads and applies the TRACED Act.
This shift is particularly important in litigation involving STIR/SHAKEN. McLaughlin opens the door to as-applied challenges in enforcement actions or private lawsuits. If you’re being sued, the district court can evaluate the FCC’s interpretation of the TRACED Act. Since the TRACED Act is a statute passed by Congress, it is not easily challenged unless there’s a constitutional issue. But how that statute is interpreted and enforced—especially through FCC rules like STIR/SHAKEN—is very much in play.
In the end, McLaughlin clarifies that courts have a duty to interpret statutes for themselves, not simply follow the agency’s lead. And in the TCPA landscape where regulatory rules can dictate millions in liability, it’s critical.
FDA Opens Public Comment Period for Chemical Post-Market Assessment Regulation
On June 18, 2025, FDA announced its proposed “method for post-market assessments of chemicals in the food supply.” This “Post-market Assessment Prioritization Tool” will give chemicals an overall score that will be used to rank each post-market chemical assessment in order of priority. We previously reported on FDA’s proposed systematic process for post-market assessment of chemicals in foods, which had its comment period extended to January 21, 2025.
According to FDA’s proposed method, a chemical’s overall score will be calculated from a Multi-Criteria Decision Analysis (MCDA) which will use four Public Health Criteria and three Other Decisional Criteria. The Public Health Criteria are toxicity, change in exposure, effects on a susceptible subpopulation (e.g., children), and availability of new scientific information. The Other Decisional Criteria are external stakeholder attention, other government decisions, and public confidence in the U.S. food supply.
The total score of the Public Health Criteria is given equal weight to that of the Other Decision Criteria, as they both get a score of 1-9 and then the two are averaged to calculate the chemical’s overall score. FDA’s press release points to how the Environmental Protection Agency (EPA) similarly prioritizes certain substances for risk evaluation, though notably the EPA criteria are already specified in the Toxic Substances Control Act (TSCA) § 2605(b)(1)(B) and are “without consideration of costs or other nonrisk factors.”
The proposed prioritization method will be open to public comments until July 18, 2025 under Docket No. FDA-2025-N-1733. In a departure from past practice, there is no Federal Register notice announcing the establishment of this docket for receipt of public comments, only a link in FDA’s announcement to the docket on www.regulations.gov. By way of contrast, see FDA’s August 2024 Federal Register notice announcing a public meeting and soliciting public comment on FDA’s Post-Market Assessment of Chemicals in Food (89 Fed. Reg. 65633, Aug. 12, 2024).
Texas Governor Signs ‘Make Texas Healthy Again’ Bill Mandating Food Warning Labels
On June 22, 2025, Texas Governor Greg Abbott signed SB 25 into law to require on-pack warning labels for food and beverage products that contain any of the substances listed within the bill, including titanium dioxide and FDA approved food colors such as Red 40. As we previously reported, the Texas House passed SB 25 on May 26, 2025, with bipartisan support and backing from the Department of Health & Human Services Secretary Robert F. Kennedy, Jr.
The law adds Sections 431.0815, 431.0816, and 431.0817 to Subchapter D, Chapter 431 of the Texas Health and Safety Code. The law requires companies to either remove or place a warning label “in a prominent and reasonably visible location” on any product that contains any of the 44 listed substances. The warning label must read: “WARNING: This product contains an ingredient that is not recommended for human consumption by the appropriate authority in Australia, Canada, the European Union, or the United Kingdom.” This requirement applies to food product labels “developed or copyrighted” on or after January 1, 2027. In addition to seeking an injunction, the Attorney General may impose a civil penalty of up to $50,000 per day for each individual food product that violates this requirement.
Notably, Section 431.0815 states that a warning label must disclose the use of any of the listed substances “if the [FDA] requires the ingredient to be named on a food label and the ingredient is used in a product intended for human consumption.” This language was included following an amendment made by Representative Lacey Hull on May 25, 2025.
The law will take effect on September 1, 2025. Although the law is specific to products sold in Texas, it is expected to create widespread implications for the food and beverage industry.
Alcohol Consumption Limit Expected to be Removed from Dietary Guidelines
Sources have reported to Reuters that the U.S. government intends to remove its recommendation within the Dietary Guidelines for Americans (DGA) that adults limit alcohol consumption to one or two drinks per day. Instead, the DGA, 2025-2030 are expected to include a generalized 1-2 sentence statement that encourages Americans to drink in moderation or limit alcohol intake.
The DGA are updated every five years by the US Department of Agriculture (USDA) and the US Department of Health and Human Services (HHS). The Guidelines have advised drinking no more than one to two drinks per day since 1990. The guidelines are still under development and subject to change, so it is unclear what effect the finalized recommendations will have on the alcoholic beverage industry.
Science Over Bias, a coalition of beer, wine, and spirits interests, released a statement to Reuters and other media members saying the Dietary Guidelines for Americans has not yet been published and should be based on “sound scientific evidence” and “free from bias.”
Understanding Cryptocurrency Forfeiture: A Guide to Digital Asset Seizure
Introduction
The rapid evolution of the digital economy has introduced new modes of value transfer, investment, and criminal activity, which has complicated the legal landscape of digital asset seizures. Federal, state, and local authorities have increasingly leveraged digital asset forfeiture as a tool to disrupt illicit activity, with the legal framework evolving rapidly—particularly following the establishment of the United States Strategic Bitcoin Reserve. This policy shift, emphasizing the retention of forfeited cryptocurrency as a long-term government asset, is underpinned by updated legal frameworks, advanced blockchain intelligence, and a renewed focus on victim restitution and law enforcement funding.
The Strategic Bitcoin Reserve marks a significant departure from prior practices, in which seized digital assets were typically liquidated at auction. The current administration empowers the government to retain a portion of forfeited cryptocurrency, aligning asset management with broader national security and financial stability objectives. This development has far-reaching implications for market participants, including businesses, investors, and individuals subject to asset seizure or forfeiture proceedings.
This article provides a comprehensive analysis of the current administration’s approach to cryptocurrency asset forfeiture, including statutory and regulatory frameworks, investigative methodologies, and the integration of forfeited digital assets into government reserves. The discussion aims to elucidate the legal and procedural considerations shaping asset forfeiture in the digital economy, and to examine best practices for compliance, risk mitigation, and defense strategies relevant to legal practitioners and industry experts navigating this rapidly changing field.
Statutory and Regulatory Framework
The statutory framework governing federal asset forfeiture, particularly as it applies to digital assets, is evolving rapidly. The legal foundation for asset forfeiture in the United States is based on a complicated web of statutes, regulations, and case law that have been adapted to address the unique characteristics of cryptocurrencies and other digital assets. Foundational authorities remain central, but recent policy developments have clarified and expanded their reach, especially in light of the growing prevalence of digital assets in criminal investigations and enforcement actions.
Key statutes relevant to digital asset forfeiture include:
18 U.S.C. § 981(a)(1)(A) & (C) (civil forfeiture of property involved in money laundering, fraud, and other specified unlawful activities). This statute allows the government to seize assets connected to a wide range of financial crimes, even in the absence of a criminal conviction, provided that the government can establish a preponderance of the evidence linking the property to illegal activity.
18 U.S.C. § 982(a) (criminal forfeiture following conviction for money-laundering predicates). Criminal forfeiture is typically pursued as part of a criminal prosecution, and requires a conviction on the underlying offense. The government may seek forfeiture of assets directly or indirectly involved in the criminal conduct.
21 U.S.C. § 853(p) (substitute-asset provisions allowing forfeiture of property unrelated to an offense when direct proceeds are beyond the court’s reach). This provision is particularly relevant in cases where digital assets have been transferred, dissipated, or otherwise rendered unavailable, allowing the government to pursue substitute assets of equivalent value.
31 U.S.C. § 9705 (Treasury Forfeiture Fund, authorizing agencies such as Internal Revenue Service Criminal Investigation, Homeland Security Investigations, and the Secret Service to retain and deploy forfeiture proceeds, and to support the Strategic Bitcoin Reserve). The Treasury Forfeiture Fund plays a critical role in managing and distributing proceeds from forfeited assets, including digital currencies.
28 U.S.C. § 524(c) (Department of Justice (“DOJ”) Assets Forfeiture Fund, applicable to Federal Bureau of Investigations (“FBI”) and Drug Enforcement Administration matters and permitting retention of forfeited assets for government use). This fund supports a range of law enforcement activities and now includes provisions for the retention of digital assets as part of the Strategic Bitcoin Reserve.
Recent executive orders and agency guidance confirm that digital assets—including cryptocurrencies and stablecoins—are treated as “property” for forfeiture purposes. The administration’s directive to retain forfeited cryptocurrency in the Strategic Bitcoin Reserve, subject to statutory requirements for victim restitution and law enforcement funding, underscores the importance of understanding the evolving legal obligations and rights under these rules. Additionally, the government has issued guidance clarifying the treatment of digital assets under existing forfeiture statutes, and courts have increasingly recognized the applicability of these laws to a wide range of digital asset types, including non-fungible tokens (“NFTs”) and decentralized finance (“DeFi”) tokens.
Congress and federal agencies continue to refine the legal framework governing digital asset forfeiture. Proposed reforms may further expand the government’s authority to seize and retain digital assets, while also introducing new procedural safeguards and transparency requirements.
Current Policy Drivers
The administration’s approach to cryptocurrency asset forfeiture is shaped by several key policy initiatives, each with direct implications for the legal and financial sectors. These policy drivers reflect a broader shift in the government’s strategy for managing digital assets, balancing the need for effective law enforcement with considerations of market stability, victim restitution, and due process.
Establishment of the Strategic Bitcoin Reserve.The government’s retention of forfeited Bitcoin and other digital assets as part of a national reserve, rather than immediate liquidation, is intended to preserve long-term value and support law enforcement operations. This policy shift necessitates careful analysis of the legal status and management of seized assets. The Strategic Bitcoin Reserve is designed to serve as a hedge against inflation, a source of funding for future enforcement actions, and a tool for enhancing national security. By holding digital assets rather than selling them at auction, the government can avoid flooding the market and potentially depressing asset prices, while also benefiting from potential appreciation in value. This approach also aligns with international trends, as other countries explore similar strategies for managing seized digital assets.
Emphasis on Victim Restitution and Law Enforcement Funding.Executive orders and agency protocols mandate that forfeited assets be used first to compensate victims. Remaining assets may be allocated to the Strategic Bitcoin Reserve or used to fund law enforcement initiatives, including investments in blockchain intelligence tools and training. The government has established structured liquidation policies to ensure that a portion of seized assets is preserved in reserve, while only liquidating assets when necessary to meet operational funding needs or to provide restitution to victims. This approach creates a self-sustaining budget cycle for law enforcement, enabling agencies to reinvest proceeds from liquidated assets into ongoing investigations and capacity-building efforts.
Expansion of Blockchain Intelligence and Public-Private Partnerships.The administration’s investment in advanced blockchain analytics and partnerships with exchanges and stablecoin issuers has accelerated the identification, freezing, and seizure of digital assets. Public-private collaboration is critical to the success of these efforts, as exchanges, wallet providers, and other virtual asset service providers (“VASPs”) play a key role in detecting and reporting suspicious activity. The government has also worked closely with international partners, such as Europol and the Guardia Civil, to coordinate cross-border investigations and asset recovery efforts. These partnerships have led to the dismantling of major criminal networks and the recovery of substantial amounts of illicit digital assets.
Reform of Asset Forfeiture Laws and Structured Liquidation Policies.Recent reforms have amended DOJ and Treasury protocols to authorize long-term Bitcoin retention rather than immediate liquidation. The government has established secure custody solutions for holding seized assets and implemented policies that align liquidation with market conditions, ensuring strategic sales instead of default post-seizure liquidation. These changes are designed to maximize the value of seized assets, minimize market disruption, and enhance transparency and accountability in the management of government-held digital assets.
Investigative Tools and Enforcement Practices
Federal agencies employ a range of investigative techniques to trace and freeze cryptocurrency assets. Understanding these practices is essential for legal practitioners and industry experts, as the sophistication of law enforcement’s digital asset investigations continues to increase. The following is an overview of key investigative tools and enforcement practices currently in use:
Tracing Illicit Cryptocurrency Flows.Law enforcement relies on advanced blockchain analytics tools, such as Chainalysis Reactor, TRM Labs, and Elliptic, to trace digital assets across multiple blockchains, identify links to criminal activity, and map the flow of funds. These platforms integrate with sanctions lists, open-source intelligence, and proprietary databases, enabling the visualization of complex transaction patterns and the identification of wallets associated with illicit activity. Investigators can follow the movement of funds through mixers, tumblers, and privacy coins, often uncovering sophisticated money laundering schemes. Legal professionals and industry participants must assess exposure and respond to inquiries related to such investigations, including requests for information, subpoenas, and search warrants.
Freezing Assets via Exchanges and Stablecoin Issuers.When assets are traced to exchanges or stablecoin wallets, law enforcement may collaborate with these platforms to freeze funds. Centralized stablecoin issuers (e.g., Tether, Circle) can freeze or burn tokens associated with illicit activity, while exchanges may restrict withdrawals or transfers from accounts flagged as high risk. Legal practitioners often advise on compliance protocols, the risks of account freezes, and the legal remedies available, including challenging the basis for a freeze and seeking the release of legitimate funds. The development of internal policies for responding to law enforcement requests and managing reputational risks associated with asset freezes is also critical.
Legal and Procedural Steps.Law enforcement typically seeks seizure warrants from courts, presenting evidence of a nexus to criminal activity. Upon judicial authorization, assets are transferred to government-controlled wallets or frozen in place. The process may involve ex parte applications, emergency restraining orders, and coordination with multiple agencies. Practitioners must be familiar with the statutory process for contesting seizures and asserting the rights of potential claimants, including filing claims under the Civil Asset Forfeiture Reform Act (“CAFRA”) and pursuing motions to suppress evidence obtained through unlawful searches or seizures.
Physical Seizure of Cold Wallets.Agencies are increasingly adept at identifying and securing hardware wallets, seed phrases, and other cold storage devices during searches. Investigators may use digital forensics tools to extract wallet information from computers, mobile devices, and physical storage media. Best practices for safeguarding digital assets, maintaining secure backups, and responding to search warrants or subpoenas involving physical crypto storage are essential considerations. Legal implications of providing or withholding access to private keys and recovery phrases should also be carefully evaluated.
International Collaboration and Asset Sharing.Cross-border investigations and asset sharing with international partners are now routine. Law enforcement agencies frequently work with counterparts in Europe, Asia, and other regions to trace and recover digital assets linked to transnational crime. Mutual legal assistance treaties (“MLATs”), joint task forces, and information-sharing agreements facilitate the coordination of investigations and the repatriation of seized assets. Navigating the complexities of international enforcement and asset recovery requires attention to compliance with foreign legal requirements and the negotiation of asset-sharing agreements.
Emerging Technologies and Future Trends.The landscape of digital asset enforcement is constantly evolving, with new technologies and investigative techniques emerging on a regular basis. Artificial intelligence, machine learning, and advanced data analytics are increasingly being used to detect patterns of illicit activity and predict future threats. The government is also exploring the use of blockchain-based evidence management systems and digital asset custody solutions to enhance the security and transparency of seized assets. Staying abreast of these developments is critical for legal and industry professionals to adapt to new enforcement practices and regulatory requirements.
Recent Representative Cryptocurrency Forfeiture Actions
Recent enforcement actions underscore the government’s increasing sophistication in tracing and recovering digital assets. These cases illustrate the practical application of investigative tools, the importance of public-private collaboration, and the evolving policies surrounding the Strategic Bitcoin Reserve:
Cryptocurrency Confidence Scams (2025).The DOJ last week seized more than $225.3 million in cryptocurrency linked to investment fraud and money laundering schemes. These funds are associated with “cryptocurrency confidence scams” that deceived victims into believing they were making legitimate investments. The cryptocurrency was part of a sophisticated money laundering network that executed hundreds of thousands of transactions to obscure the origins of the stolen funds. The FBI and U.S. Secret Service (“USSS”) played significant roles in tracing and seizing the illicit funds, marking the largest cryptocurrency seizure in USSS history. More than 400 suspected victims lost funds, with reported losses exceeding $5.8 billion in 2024 alone. The DOJ emphasized its ongoing commitment to protecting the public from cryptocurrency scams and recovering stolen funds for victims.
Colonial Pipeline Ransomware Recovery (2021).The DOJ traced and recovered approximately $2.3 million in Bitcoin paid as ransom, demonstrating the power of real-time blockchain analysis. Investigators were able to follow the movement of funds through multiple wallets, ultimately seizing the private keys associated with the ransom payment. This case set a precedent for the use of blockchain analytics in high-profile cybercrime investigations. These developments highlight the importance of strategic legal responses to investigations and asset recovery, including negotiation with law enforcement and the pursuit of civil claims for the return of seized assets.
Pig Butchering Scam Takedowns (2023-2024).U.S. law enforcement, in collaboration with stablecoin issuers and exchanges, froze and seized hundreds of millions of dollars in digital assets linked to large-scale scams. These operations involved the use of advanced analytics to identify fraudulent accounts, the rapid freezing of assets by centralized platforms, and the coordination of victim restitution efforts. Legal and compliance professionals play a key role in developing internal controls to detect and prevent fraud, contesting or mitigating the impact of asset freezes, and ensuring adherence to reporting requirements and best practices for cooperating with law enforcement.
Operation Spincaster and International Seizures (2024-2025).Joint operations with international law enforcement and blockchain analytics firms have dismantled global scam networks and resulted in significant cryptocurrency seizures. These cases often involve complex cross-border investigations, the use of mutual legal assistance treaties, and the negotiation of asset-sharing agreements between countries. Multi-jurisdictional enforcement actions require careful navigation of conflicting legal requirements and the protection of interests across multiple jurisdictions.
Spanish Guardia Civil Cryptocurrency Seizure (2025).In a landmark operation, Spanish authorities, supported by U.S. law enforcement and blockchain intelligence firms, seized more than EUR 27 million in cryptocurrency from a transnational criminal organization. The operation spanned multiple provinces and involved the freezing of assets on several major exchanges. This case highlights the growing importance of international collaboration and the role of advanced technology in asset recovery.
Other Notable Cases.Additional recent actions include the seizure of assets from darknet marketplaces, the recovery of funds from ransomware attacks targeting critical infrastructure, and the dismantling of money laundering networks operating through DeFi platforms. These cases demonstrate the government’s commitment to pursuing illicit actors across the digital asset ecosystem and the need for businesses to maintain robust compliance programs.
The DOJ last week seized more than $225.3 million in cryptocurrency linked to investment fraud and money laundering schemes. These funds are associated with “cryptocurrency confidence scams” that deceived victims into believing they were making legitimate investments. The cryptocurrency was part of a sophisticated money laundering network that executed hundreds of thousands of transactions to obscure the origins of the stolen funds. The FBI and U.S. Secret Service (“USSS”) played significant roles in tracing and seizing the illicit funds, marking the largest cryptocurrency seizure in USSS history. More than 400 suspected victims lost funds, with reported losses exceeding $5.8 billion in 2024 alone. The DOJ emphasized its ongoing commitment to protecting the public from cryptocurrency scams and recovering stolen funds for victims.
These cases highlight the importance of sophisticated legal analysis in navigating rapid, intelligence-driven seizures and the evolving policies surrounding the Strategic Bitcoin Reserve. Experience in handling high-profile forfeiture actions is essential for providing strategic advice and effective representation in complex cases.
Procedural Mechanics of Crypto Seizure and Forfeiture
The procedural mechanics of crypto seizure and forfeiture involve a combination of technical investigation and legal process. The process typically begins with the identification of suspicious activity, often through the use of blockchain analytics tools that trace funds to specific wallet addresses. Investigators may follow assets through multiple transactions, exchanges, and privacy-enhancing technologies, building a comprehensive picture of the flow of funds and their connection to alleged criminal activity.
Once sufficient evidence is gathered, law enforcement may seek to freeze assets by working with exchanges, stablecoin issuers, or other virtual asset service providers. This can be accomplished through court-ordered seizure warrants, emergency restraining orders, or compliance protocols that enable rapid restriction of high-risk accounts. In some cases, stablecoin issuers may freeze or burn tokens associated with illicit activity, while exchanges may restrict withdrawals or transfers from flagged accounts.
Prosecutors typically seek judicial authorization—through a Rule 41 warrant, civil forfeiture complaint, or other legal process—detailing the evidence and technical methods for securing assets. The government must demonstrate probable cause or a preponderance of the evidence linking the assets to criminal conduct, depending on the type of proceeding. Legal professionals play a critical role in responding to such actions, asserting rights throughout the process, and challenging the basis for seizure when appropriate.
After assets are seized or frozen, the government is required to provide notice to potential claimants. This may be accomplished through blockchain messaging, publication in official channels, and direct service to known parties. Claimants have a statutory period to contest forfeiture under the CAFRA or other applicable laws. The process may involve filing claims, participating in administrative proceedings, and litigating contested issues in court.
Following adjudication or default, assets may be returned to victims, liquidated, or retained in the Strategic Bitcoin Reserve. The government’s structured liquidation and custody protocols are designed to ensure transparency, maximize asset value, and protect the interests of victims and legitimate owners. Contesting forfeiture, seeking asset return, negotiating settlements, and navigating the complexities of government asset management policies are key areas of focus. Experience in high-stakes forfeiture proceedings, compliance with strict notice and claim requirements, and the development of strategies for recovering or protecting digital assets are essential for effective legal practice in this area.
Possible Legal Defenses to Cryptocurrency Forfeiture
A range of legal challenges may be asserted in cryptocurrency forfeiture proceedings, including constitutional, statutory, and procedural defenses. The unique characteristics of digital assets present both opportunities and challenges for claimants seeking to protect their property rights. Key defenses include:
Fourth Amendment Challenges.Clients may contest seizures as unreasonable searches, particularly where warrants are based on probabilistic blockchain analysis or lack specificity regarding private keys. The use of advanced analytics and artificial intelligence in tracing digital assets raises novel questions about the reliability and admissibility of evidence. While courts often uphold the use of blockchain analytics, lawyers continue to litigate issues related to overbroad warrants, lack of particularity, and the protection of privacy interests in digital wallets and private keys. There have been successful challenges to the scope of search warrants and the methods used to access encrypted devices and storage media.
Eighth Amendment Proportionality.The forfeiture of highly appreciated digital assets can be challenged as an excessive fine, especially when asset values far exceed alleged criminal proceeds. The volatility of cryptocurrency prices and the potential for significant appreciation between the time of seizure and forfeiture raise important questions about proportionality and fairness. Developing proportionality arguments, presenting expert testimony on asset valuation, and navigating the evolving case law in this area are critical. Recent court decisions have recognized the need to consider the relationship between the value of the forfeited assets and the gravity of the underlying offense.
Innocent-Owner Claims (CAFRA).Third parties may assert lack of knowledge or involvement in criminal conduct. The distributed and pseudonymous nature of crypto custody can complicate these claims, particularly with multi-signature wallets, custodial arrangements, and DeFi platforms. Developing and presenting robust innocent-owner defenses, including documenting the source of funds, demonstrating lack of control over tainted assets, and challenging the government’s tracing methodologies, is essential. Practitioners should also be aware of the procedural requirements for asserting innocent-owner claims and the potential for negotiated settlements.
Procedural and Technical Defenses.Challenging government tracing methodologies, contesting the timeliness of proceedings, and disputing the identification of tainted assets is critical. As blockchain investigations become more sophisticated, it is important to ensure that procedural and technical rights are fully protected. Experience in challenging the admissibility of digital evidence, contesting the use of proprietary analytics tools, and advocating for greater transparency in government investigations is increasingly important. The use of expert witnesses, preservation of digital evidence, and development of technical defenses based on the unique features of blockchain technology are also key considerations.
Other Potential Defenses.Additional defenses may include challenges based on lack of jurisdiction, violations of due process, the improper application of forfeiture statutes to novel digital asset types, or the statute of limitations has expired. Identifying all available defenses and developing comprehensive strategies for protecting interests in forfeiture proceedings is a critical aspect of legal practice in this area.
Policy Considerations for Practitioners and Lawmakers
The evolving landscape of digital asset forfeiture raises several policy considerations relevant to practitioners, lawmakers, and the broader legal community. As the legal and regulatory framework continues to develop, it is essential to consider the broader implications of current policies and to advocate for reforms that promote fairness, transparency, and efficiency.
Balancing Enforcement, Victim Restitution, and Due Process.While rapid asset freezes are vital for disrupting criminal networks and preventing the dissipation of illicit funds, they must be balanced with procedural safeguards and prompt opportunities for claimants to contest forfeiture. The government’s emphasis on victim restitution is commendable, but it is equally important to ensure that innocent owners and legitimate businesses are not unfairly deprived of their assets. Ensuring due process at every stage—including timely notice, access to judicial review, and the opportunity to present evidence and challenge the government’s case—is essential.
Strategic Asset Management and Custodial Risk.The government’s retention of large cryptocurrency reserves introduces market and security risks, including the potential for price volatility, hacking, and mismanagement. The implications of custodianship, staking rewards, airdrops, and structured liquidation policies must be carefully considered. The development of secure custody solutions, transparent asset management protocols, and independent oversight mechanisms is essential to mitigate these risks and to maintain public confidence in the government’s handling of digital assets.
Funding Law Enforcement and Avoiding Improper Incentives.The use of forfeited assets to fund law enforcement raises transparency and conflict-of-interest concerns. While self-sustaining budget cycles can enhance the effectiveness of digital asset investigations, they may also create incentives for overzealous enforcement and the pursuit of revenue at the expense of due process. The impact of these funding mechanisms should be critically assessed, with support for fair and transparent processes and reforms that promote accountability and the responsible use of forfeiture proceeds.
International Coordination and Best Practices.As cross-border investigations increase, harmonizing doctrines and adopting best practices—such as enhanced judicial oversight, victim claims portals, and standardized asset-sharing agreements—are essential. The complexity of international asset recovery requires close collaboration between governments, private sector partners, and civil society organizations. International coordination requires navigating conflicting legal requirements, negotiating asset repatriation agreements, and advocating for the adoption of global standards for digital asset forfeiture.
Future Directions and Legislative Reform.Ongoing legislative and regulatory reforms are likely to further shape the landscape of digital asset forfeiture. Proposed changes may include enhanced procedural protections for claimants, greater transparency in asset management, and the development of new tools for tracing and recovering digital assets. Active engagement in policy discussions and advocacy for reforms that balance the needs of law enforcement, victims, and legitimate asset holders are essential for the continued evolution of the legal framework.
Conclusion
As the legal landscape for digital asset forfeiture continues to evolve, the integration of digital assets into national policy, the expansion of investigative tools, and the retention of forfeited assets in government reserves all present new challenges and opportunities for the financial ecosystem and legal profession.
Remaining at the forefront of legal developments is essential for protecting property rights, asserting effective defenses, and adapting to the rapidly changing digital economy. A comprehensive approach includes compliance with evolving statutory and regulatory frameworks, the development of robust internal controls, effective responses to law enforcement inquiries, and the litigation of complex forfeiture proceedings. Strategic guidance on risk management, asset recovery, and the development of best practices for digital asset custody and management is increasingly important.
Looking ahead, continued innovation in both technology and policy is anticipated, with new tools and legal doctrines emerging to address the unique challenges of digital asset enforcement. Legal and industry professionals must remain vigilant and informed to navigate the future of digital asset forfeiture with confidence and clarity.
State of Employment Law: Meal and Rest Break Laws Vary Significantly from State to State
As reported earlier this week, Minnesota recently passed laws that mandate a meal break of at least 30 minutes each shift and rest breaks of at least 15 minutes for every four consecutive hours worked. While federal law generally does not mandate meal or rest breaks, several states require one or both.
Nineteen states require employers to provide meal breaks and nine states require employers to provide rest breaks. However, employers may struggle to develop a one-size-fits-all multi-state policy for meal breaks, as state laws vary significantly.
For example, in Colorado, employers must provide a 30-minute meal break to employees scheduled to work a shift of at least five hours. In contrast, employers in Illinois only have to provide a 20-minute meal break, and only to employees who work at least seven and a half hours.
In Nevada, employees must work eight hours to earn a 30-minute meal break. New York mandates longer minimum lunch breaks for factory workers than non-factory workers and Maryland only requires lunch breaks for retail workers.
Some states mandate when the meal break must be taken, while others are silent on timing. Arkansas does not require meal breaks, but if an Arkansas employer provides meal breaks shorter than 30 minutes, then they must be counted as hours worked.
A consistent multi-state rest break policy is likely easier to implement, as most states that require rest breaks require 10 minutes of break time for every four hours worked.
E-Verify Users Must Now Generate Status Change Reports to Identify Terminated Work Authorizations
Employers enrolled in E-Verify must now generate Status Change Reports to identify employees whose work permits have been terminated due to changes in temporary status protections or similar programs.
The recent termination by the Department of Homeland Security (“DHS”) of removal protections and employment authorization for several hundred thousand individuals covered by Temporary Protected Status and parole programs has resulted in situations where a worker’s employment authorization document (“EAD”) may appear valid despite having been revoked. Previously, E-Verify would issue Case Alerts to employers where an EAD had been revoked by DHS.
As per June 23, 2025 guidance issued on the E-Verify website, Case Alerts will no longer be used for EAD revocations related to the termination of parole or other humanitarian protected status programs. Employers now “should regularly generate the Status Change Report to identify E-Verify cases created with an EAD that is now revoked” on these bases. As per the guidance, employees whose EADs were revoked between April 9-June 13, 2025 would be reflected in Status Change Reports available as of June 20, 2025.
The guidance further states that employers should not create a new E-Verify case in the event an employee appears on a Status Change Report. Rather, “E-Verify employers must use Form I-9, Supplement B, to immediately begin reverifying each current employee whose EAD the Status Change Report indicated was revoked, or after your employee voluntarily discloses to you that their EAD has been revoked, and complete all reverifications within a reasonable amount of time.” In such situations, employees may still be authorized to work in the United States based on another status or provision of law and may provide other acceptable Form I-9 documentation to the employer to demonstrate employment authorization.
E-Verify will continue to provide Case Alerts for EADs that are expiring regularly and not as a result of changes in temporary status protections or similar programs.
California Delays NOP Requirements for Compostable Products
Earlier this month, the California Department of Resources Recycling and Recovery (CalRecycle) sent a letter to the Biodegradable Products Institute (BPI) that effectively delays, until June 30, 2027, a key requirement for “compostable” and “home compostable” products set to take effect next year. California’s AB 1201 required that after January 1, 2026, products labeled “compostable” or “home compostable” must not only pass tests specified under the law but must also be “an allowable agricultural organic input under the requirements of the United States Department of Agriculture [(USDA)] National Organic Program [(NOP)].” Although this requirement applies to any material that meets AB 1201’s broad definition of a “product,” the law principally affects plastic and plastic-coated products. To assure that products meeting California’s current compostability standards can continue to be labeled “compostable” or “home compostable” in California, BPI submitted a petition in 2023 to the National Organic Standards Board (NOSB) seeking recognition for compostable plastic and plastic-coated products under the USDA NOP. That petition is still pending. CalRecycle’s letter to BPI grants an extension for “products that contain synthetic substances that otherwise satisfy all requirements for lawfully being labeled ‘compostable,’ including the requirement that products meet an ASTM standard specification pursuant to section 42357(a)(1). This extension shall expire as of June 30, 2027.” Absent this action, many companies would have had to remove current “compostable” labels for their products at a time when other laws – notably SB 54, California’s Extended Producer Responsibility (EPR) law for packaging – require that products meet source reduction, recyclability, or compostability requirements by specific deadlines.
CalRecycle’s extension allows plastic and plastic-coated products that currently meet all requirements for being labeled “compostable” or “home compostable” in California, save for formal recognition by the USDA NOP, to continue to be sold in that state without changes to labels until June 30, 2027. After that date, companies must revise labeling for their “compostable” and “home compostable” products sold in California that are not listed as an allowable agricultural organic input under the requirements of the USDA NOP, unless CalRecycle grants a further exemption. On this point, CalRecycle explained that before June 30, 2027:
CalRecycle will evaluate whether to renew exemptions for products that would become compliant with PRC section 42357(g)(1)(B) pursuant to regulations then under consideration. CalRecycle may determine regulations to be under consideration if there is a pending NOSB rulemaking recommendation to the NOP, the NOP has decided to initiate rulemaking but has not yet done so, or the rulemaking process is underway. A renewed extension shall continue while such regulations remain under consideration but shall not extend beyond January 1, 2031.
CalRecycle’s action is good news for companies selling covered compostable products in California. However, the compostability legal landscape remains fractured, with some different – and inconsistent – state laws. Although other states have not adopted California’s added NOP obligations, states like Washington, Colorado, and others have their own restrictions for labeling and marking “compostable” products. CalRecycle’s 18-month extension is a positive step for many companies who have invested in compostable and home compostable products. Nevertheless, businesses offering compostable packaging and products nationally must be familiar with all applicable compostability requirements in developing their labeling and marketing materials.
Companies Gauge Impact of Return to Office
The prevalence of remote and hybrid work varies by industry, type of job, and job level in an organization’s hierarchy. A survey from Robert Half found that, from 2023 to 2025, the proportion of job listings with hybrid work jumped from 9 percent to 24 percent, while the proportion of job listings with fully remote work rose from 10 percent to 13 percent, and the proportion of job listings with fully in-person work dropped from 83 percent to 63 percent.
Quick Hits
Remote work and hybrid work remain a growing trend.
Some employers, including federal agencies, have implemented return-to-work policies during the last two years.
Employers with a return-to-work policy may want to measure its ongoing impact on employee retention, recruitment, and productivity.
In many industries, remote and hybrid work increased dramatically during the coronavirus pandemic in 2020 and 2021. After the pandemic subsided, some employers announced new policies requiring all workers to return to the office four or five days per week. On January 20, 2025, President Donald Trump issued an executive order requiring federal agencies to end remote work and order federal employees to be present in the office five days per week.
Some employers and managers hoped a return to the office would increase productivity, strengthen the corporate culture, and promote collaboration and innovation. Did the return-to-work policy bring the intended results, or did it have unintended consequences for employers and employees?
A 2023 survey from Unispace found that 42 percent of employers that mandated a return to the office experienced higher than normal turnover, and 29 percent had a harder time recruiting employees. Productivity increased at workplaces where the use of remote work increased, even before the pandemic, according to a 2024 study from the U.S. Bureau of Labor Statistics. About 31 percent of U.S. employees were engaged at work in 2024, up from 26 percent in 2000, according to a Gallup survey.
Many employees like remote work because it eliminates their commuting time and costs, like gas and parking. The time that would have been spent commuting can be spent on work-related tasks. Remote work also gives employees greater flexibility and time to handle personal and family matters, like medical appointments and school meetings.
For employers, remote work may increase employee retention and widen the talent pool for hiring. It also may lower spending on office space, utilities, commuter benefits, and office supplies. Likewise, it may lower payroll costs because some workers will accept a lower salary for a remote position that offers better work-life balance.
Common Legal Issues With Remote and Return-to-Office Work
Americans with Disabilities Act (ADA) Accommodation Challenges: Employers face potential disability discrimination claims when mandating office returns for employees with qualifying disabilities who request remote work as a reasonable accommodation. Failure to engage in the interactive process before applying return-to-work policies to employees with disabilities can create legal liability.
Discrimination Concerns: As with most other employment decisions, selectively applied return-to-office mandates might create a perception of favoritism or unfairness, potentially creating discrimination claims based on race, gender, age, disability, and other protected characteristics.
Compensation Equity Issues: Different pay structures for remote versus in-office employees, or employees working in diverse geographic regions, may create pay equity complications or discrimination claims.
Pay Transparency Compliance Issues: An increasingly complex web of state and local pay transparency laws mandate disclosure of salary ranges in job postings or by request from current employees. Some laws require disclosure in the jurisdiction if the job could be filled by a remote worker or if the worker will perform work at a location in the jurisdiction. Complying with these laws in the context of hybrid or remote work requires careful planning.
Productivity Measurement Liability: Methods used to monitor remote versus in-office productivity could create privacy or discrimination issues if not applied consistently.
Travel Time and Expense Reimbursement: A hybrid work arrangement can give rise to complexities regarding travel time for nonexempt employees, particularly where there may be ambiguity regarding whether travel counts as commuting time or on-the-clock travel time. Moreover, in some states where expense reimbursement is required for use of personal devices, internet service, and the like, ambiguities may arise with hybrid schedules allowing employees to work remotely on a flexible schedule.
Next Steps
Employers may wish to measure the impact of return-to-work policies on productivity, recruiting, retention, payroll, and other overhead costs. This can be accomplished with employee engagement surveys, accounting software, and gathering data on cost per hire, time to hire, and turnover rates in various corporate departments and locations.
Among other compliance steps, employers may want to consider:
Developing and consistently following written standards regarding remote, hybrid, or in-office work location obligations.
Implementing a consistent, documented interactive process for employees requesting remote work accommodations.
Reviewing compensation practices and conducting pay equity audits.
Mapping out pay transparency laws and complying with state and local mandates.
Developing clear metrics to measure productivity, regardless of work location.
Reviewing policies to ensure they don’t create unintended discriminatory impacts.
Creating clear guidelines about reimbursable remote work expenses.
This article was co-authored by Leah J. Shepherd, who is a writer in Ogletree Deakins’ Washington, D.C., office.
Supreme Court Provides Crucial Guidance on Venue for Clean Air Act Challenges
On June 18, 2025, the Supreme Court decided Oklahoma v. EPA and EPA v. Calumet, a pair of cases that focus on the Clean Air Act’s (CAA or Act) venue selection provisions.
The judicial review provisions of the Act send review of “nationally applicable” EPA actions to the DC Circuit and review of “locally or regionally applicable” EPA actions to the regional circuits. See 42 U.S.C. § 7607(b)(1). However, in an exception to that rule, venue may lie in the DC Circuit for regionally applicable actions that are “based on a determination of nationwide scope or effect.” In the Court’s two recent decisions, it explained that the CAA venue analysis called for a two-step inquiry. First, courts must decide whether the EPA action is nationally applicable or only locally or regionally applicable; if nationally applicable, the case belongs in the DC Circuit. Second, if locally or regionally applicable, courts must decide whether the case falls within the exception for “nationwide scope or effect” to override the default rule of regional circuit review.
In Oklahoma, the Court held that EPA’s disapproval of the Oklahoma and Utah state implementation plans (SIPs) belonged in a regional circuit, not the DC Circuit. At the first step, the Court found the SIP disapprovals were “[c]learly” “locally or regionally applicable.” The Court held that the disapproval of a SIP by its nature (and by statute) is always a locally or regionally applicable action. EPA cannot change that by grouping multiple state-specific disapprovals into one Federal Register notice. At the second step, the Court set forth a high standard that EPA must clear in order to show that a locally or regionally applicable action is based on a determination of nationwide scope or effect: That determination must lie at the “core” of EPA’s decision, i.e., it must serve as the most important part of EPA’s rationale. EPA receives no deference on this issue. If it is “debatable” whether such a determination lay at the core of EPA’s rationale, then the exception does not apply. In Oklahoma, the Court explained that the SIP disapprovals were based on a variety of state-specific facts and that EPA’s various nationwide determinations were not the primary reasons for disapproving the SIPs. Thus, the exception did not apply, and the litigation belonged in the Tenth, not DC, Circuit.
In Calumet, the Court reached a different conclusion regarding challenges to exemptions under the CAA’s renewable fuels program for fuel refineries. Although EPA’s denial of exemption petitions was “locally applicable,” the Court concluded that EPA had relied on national legal and economic determinations that applied “generically to all refineries, regardless of their geographic location.” Because those nationwide determinations provided the basis for denying the individual exemption requests, they lay at the core of EPA’s action and thus triggered the exemption to bring venue to the DC Circuit.
Together, these decisions clarify the line between national and local or regional EPA actions for purposes of venue under the CAA. Oklahoma suggests that actions grounded in state-specific facts (like SIP disapprovals) belong in regional circuits, even if decided in omnibus fashion or using a shared analytical framework. Calumet shows that when EPA applies a uniform national rationale not grounded in state- or region-specific considerations, challenges belong in the DC Circuit.
The Oklahoma decision will be particularly helpful in clarifying proper venue in other cases involving state plans. For example, under the current administration, EPA is proposing to approve state plans for “reasonable progress” on visibility improvement during the second planning period. Venue for any challenges to those EPA approvals will presumptively lie in the local circuits.
From Wall Street to Main Street: Investor Advocate Puts Private Funds on the 401(k) Horizon
On June 25, 2025, the SEC’s Office of the Investor Advocate (OIAD) released its annual report to Congress on its policy priorities for fiscal year 2026. The office was established by Congress to focus on retail investor issues and, in many years, its annual report draws limited attention. This year’s report is notable because it places the inclusion of private equity, private credit and other alternative strategies in retirement savings plans (such as 401(k) plans) on its short list of 2026 policy priorities. If retail investors are given greater latitude to invest in private funds through their retirement plans, they could become a significant new source of capital for private fund managers.
Although OIAD does not write rules, its work reflects the Commission’s agenda and shapes the final outputs. Its staff conducts research that can inform how the Commission designs rules, for example, by providing evidence of investor preferences to regarding particular asset classes and their level of understanding of common investment structures. This information could, in turn, be used to design any guardrails the SEC may impose or to support the cost-benefit analysis the SEC is required by statute to conduct.[1]
OIAD’s focus does not guarantee imminent rulemaking; however, history shows that themes highlighted in its reports frequently reappear elsewhere on the SEC’s agenda. The inclusion of private market issues in OIAD’s report provides further confirmation, alongside other recent changes at the SEC and elsewhere,[2] such as abandoning the previous informal limitation on closed-end funds’ investments in private funds as well as recent statements from the SEC Commissioners and staff, that easing the path for retail investors to invest in alternative assets through their retirement savings plans is one step closer to becoming a reality.[3]
[1] The economic analysis section of a rulemaking release is frequently nearly the same length as the legal section. SEC rules have been regularly overturned on the basis of flaws in the economic analysis, as opposed to the legal analysis. By taking the extra time to assemble strong economic evidence in advance of a rulemaking action, the SEC could help to create a rule that will survive legal challenge.
[2] For example, the United States House of Representatives recently passed a bill that would expand the definition of accredited investor to include additional categories of professional certification, which could expand the universe of eligible investors in private funds. Similar bills have been passed before only to languish in the Senate, but the near-unanimous approvals by of the House’s bills may indicate a broadly bipartisan coalition is developing in favor of increased access to private investments.
[3] Rule changes at the SEC are not the only actions that must take place before retirement plan investments in private funds become widespread. This would likely also require action by the Department of Labor (which, reportedly, could be the subject of a future executive order) as well as decisions by individual plan fiduciaries to add funds to their platforms. While the SEC’s actions alone will not change the environment for private fund managers, they represent an important step along the path.