Honestly I'm not gonna shed a tear for a crypto scammer pig butchering slaver losing their stack.
That said, the seized funds should go toward making victims whole. If they lost Bitcoin, it should be returned as Bitcoin. If they lost fiat or shitcoins, give them the fiat value back. If there's anything left over, THAT can go into the SBR.
The idea that seizing stolen property means the state now gets to keep it is a really fucked up idea. If my car is stolen and then recovered, do they now have a strategic used car reserve?