Can the government "confiscate" your bitcoin?

Greetings,

I made this video following the recent press conference given by the FBI in the United States where they announced the 'confiscation' of an amount of bitcoin apparently linked to the Colonial Pipeline ransom loot.

The news seemed to have a negative effect on the market, manifesting as a sell-off, shortly after the announcement. I'm not sure why people think what they said warranted a sell-off of any kind.

Besides, the FBI, or anyone for that matter, cannot 'confiscate' your bitcoin unless you relinquish your keys to them. Leaving your crypto on a centralised exchange, which is what the 'hackers' did, is doing exactly that.

Ade