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I think that disclaimer was added after this happened. In fact I think it was added because of this case.
This may be correct, but regardless in this case the fault lies solely with the law enforcement agency involved. If they do not understand how the technology works they have no business using that same technology as the basis to launch raids.
I'm not sure fault is the right word. Yes they apparently got it wrong (if OP on the issue is to be believed and who knows), but their job is to investigate these things based on often-unreliable information. The problem isn't really that they do that, it is that Bitcoin creates so such an enormous body of unreliable and dangerous information people may be reluctant to use it at all. This doesn't even need to involve law enforcement, at least not directly. As I said earlier, Coinbase has become much less useful to me since it has become apparent how they investigate blockchain taint meaning even innocent uses can put you under a cloud of suspicion. It makes me want to have nothing to do with it at all.
I am assuming, and I may be incorrect, that were a dealing with a jurisdiction where probable cause or something very similar is needed for before a law enforcement agency can do what was described in the OP, which was a lot more than merely investigate. Yes Bitcoin has serious shortcomings when it comes to coin taint and Coinbase is adding to the problem in a big way; however this does not absolve the law enforcement agency involved if they needed probable cause or something very similar.
What the OP actually may need is 1) A good lawyer, 2) The financial resources to pay for the lawyer and 3) The willingness to make an example out of the law enforcement agency involved in the courts.
Edit: Hueristic is right on. In many cases law enforcement agencies and large corporations take advantage of the fact that many of their victims cannot afford to fight back even though they are well aware of the fact that they are in the wrong. In these cases when the victim does has the resources to fight back they also have the ethical and moral responsibility to not only fight back but to also make an example out of the law enforcement agency or corporation involved in the courts.