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Can they also confiscate YOUR crypto funds if they wanted to??
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If they wanted to they can, it's easy as they write a letter to the exchange where our coins are with a gov order to freeze that money, shouldn't be a big deal for them to do it. But if the bitcoins are under our wallet then it would be a lil harder for them because they have to get access someway to our machine to access to the private keys of the coins.
The FBI has some advanced tools and zero days to access any device. So, if they want to get your coins they will be able to do it.
They don't need to do that, it was an abuse of authority if that be going to happen unless if there is a report in regards to illegal activities. but what I can say this is just a FUD, many people had spread the news like this trying to create attention and panic for the community. So if we know that we don't violate any and we secure our keys, we have no problem with that and our funds remain safe.