First Circuit Lets SEC Seize $25M of Overseas Crypto Proceeds in Swiss Banker Case

SEC Snags Foreign Crypto Banker in Hidden-Asset Ruling

A federal appeals court just handed the SEC a powerful new tool for clawing back crypto-tainted funds parked overseas. By upholding a $25 million-plus judgment against a Swiss banker who never traded the tokens himself, the First Circuit made clear that anyone holding digital-asset proceeds—knowingly or not—can be forced to disgorge them, even if they sit outside U.S. borders.

The case began when the SEC accused Raimund Gastauer’s relatives of running an unregistered crypto offering that raised more than $80 million from U.S. investors through a network of offshore shells. After the alleged promoters fled and the money vanished into Swiss accounts, the agency sued Gastauer as a “relief defendant,” claiming he received at least $25 million that could be traced to the scheme. Gastauer fought jurisdiction, arguing he was a passive European banker with no U.S. contacts and no personal wrongdoing. The district court disagreed, froze his assets, and entered summary judgment; he appealed.

The three-judge panel affirmed in full. Writing for the court, Judge Kayatta ruled that U.S. securities laws reach anyone who receives ill-gotten proceeds, whether or not they participated in the fraud, so long as personal jurisdiction is proper. The judges found Gastauer had sufficient U.S. ties through repeated dollar-denominated transfers, U.S. bank accounts, and communications with American counterparties. Because the funds were still traceable, the court held that disgorgement remained an equitable remedy even after the Supreme Court’s Liu decision narrowed the SEC’s penalty powers. Gastauer’s “I’m just the banker” defense collapsed.

In plain English, the ruling tells crypto players that moving money through foreign accounts no longer shields it from U.S. regulators. If the government can trace investor dollars to your wallet or vault—anywhere in the world—you may have to give them back, win or lose on the underlying fraud charges.

For markets, the decision tilts authority further toward the SEC at the expense of both decentralization narratives and offshore structuring. Exchanges and DeFi protocols that custody or route customer assets now face higher compliance costs and potential secondary liability; traders who park gains abroad must weigh the new risk that any future enforcement wave could vacuum up those holdings. Stablecoin issuers and OTC desks operating across borders should expect tighter KYC and monitoring, because the opinion effectively imports U.S. tracing rules into every correspondent bank relationship.

Bottom line: the SEC just proved it can reach across oceans for crypto cash—ignore that reach at your balance-sheet’s peril.