My question is; is this actually right? I think this assets are supposed to auction or sold off?
In majority of cases they do sell seized assets, but afaik they don't have to do it if they think they can use it some other way, like for example seized cars. And even if there wa a rule that they have to sell it, they could easily change that law in order to keep whatever they want.
Entities up above will think ten times before doing anything, and then choose what suits them (not the crypto space by any means) best. It was always like that and it will stay that way..