Originally Posted by Quentin

It's complicated.

The actions taken by the feds here were carried out under a warrant obtained on the basis of what appears to be clearly illegal action on the part of these sites. The sites were not UCG sites, so they could not claim exemption under the DMCA safe harbor as ISPs/OSPs by asserting that end users had uploaded the content in question. (Plus, the sites made no claim of adhering to DMCA anyway, so that argument was never available to them).

Seizure of property and assets prior to making an arrest is not that unusual in criminal cases, particularly criminal cases involving suspects located outside the U.S., but who have assets inside the U.S. You see this sort of thing all the time with organized crime cases, counter-terrorism measures, even sites/services that violate UIGEA. As part of the investigation, the feds seize assets, in part to force the accused party to respond to subpoenas and summons (as responding and defending themselves in court is the only way they are going to get their assets back), thereby making themselves available and known to law enforcement.

The WSJ article doesn't provide enough detail to say what law(s) this action was carried out under, but from the details they did provide, it seems pretty clear that this is a copyright infringement case at its core.