The government has no right to hold on to it or sell it off for its own benefit.
Of course they do. The law decides the right, not someone with the username headingnorth.
It's sad and scary to know there are so many sheep like yourself who think the government can do whatever it wants,
and no one should ever dare question them. That is the anti-thesis of what bitcoin is about and why it was created.
Someone like yourself would feel right at home in North Korea or Saudi Arabia. I wouldn't be surprised if you are from one those places.
What is right in a country is decided by law. Whether you like this or not changes nothing. In your case, the majority of the stupid decides what is allowed and what is not.

My man wants the government to give back money to drug addicts and drug sellers, great example of western education.

Giving back money to drug addicts would greatly benefit crackheads like yourself,
so why are you complaining? You get
free govt money to buy more crack and meth!
In that case the seized asset should be given back to the victims. The government has no right to
hold on to it or sell it off for its own benefit.
They can give it back to the right owners; that's if they know who it belongs to or if it's in a case where the owners are clean and can come forward to challenge the government in court and prove they own something in those seized coins. Then they can receive it back, but if they can't do that, then it will come down to selling it in auction, or they will later be left to decide what to do with it.
The US government can't even account for its own bitcoin holdings that were seized from various sources including Silk Road.
About 150,000 bitcoins are still unaccounted for. They have never provided proof of funds (ie: public addresses) for the missing amount.
They have never provided a proper explanation of what happened to it.
The US government also hasn't conducted an audit of its gold holdings in over 50 years.
I would not trust them to hold anything of value in a strategic reserve for long. It will eventually get embezzled.