Can they also confiscate YOUR crypto funds if they wanted to??
This is nothing more than FUD which is now of course being used to drive down the price. The FBI got hold of the private key and was able to pull the funds, as could any other person who gets their hands on the PK.
Nothing was "hacked" nor could Bitcoin be "cracked". Here is an article with some background information about this, where you can also read speculations how this could happen:
How A New Team Of Feds Hacked The Hackers And Got Colonial Pipeline's Ransom Back