[hef19898]

In your example, no, the account owner wouldn't have a right to remove the money if the account and not the computer holding the password, was legally seized by the government. The government so cannot use those funds as they please neither until a legal decision allows them to do (RICO maybe, or anti-Mafia laws in Italy allow for that after court decisions). Also in your example, the bank in a different jurisdiction will get requests from the government in question to freeze the account, which might or might not be followed through depending on bi-lateral agreements and which country is asking on which basis for the account being freezed.

I have no idea why crypto would be treated any different.

[once_inc]

There is no third party to have agreements with. There is only the government, the account holder, and the private key.

[hef19898]

You forgot the courts. The government seizing stuff (which can be a problem in itself) doesn't mean the government can spend / use the stuff as they see fit. Courts have a say in that.

[DocTomoe]

That's the point: In my example, an actual seizure of the account has not happened. Just because a state actor declares an item seized does not make it so - seizure implies having taken possession of the item at question (see, e.g. [1]). This clearly has not happened in the crypto case.

[1] https://www.law.cornell.edu/wex/seizure