This is ridiculous, and since Bitcoin is a currency (rather than a commodity), this ruling can't be enforced.

For example, imagine that a bank robbery occurs. The thieves steal some $100 million worth of fiat, and then deposit a part of that money in a stock exchange to buy some equities.

According to the latest ruling, the cops will be confiscating the fiat from the person who sold the equities. They should be confiscating the equities instead.