Maybe I’m wrong but I think the fediverse isn’t quite that fragile. Instances can always close new sign ups if they’re overwhelmed. More users means more donations and more people likely to self host, too.

I guess we could run into real issues if fediverse infrastructure doesn’t scale well (example: required server resources scale exponentially with more users instead of linearly)

In extreme circumstances instances can defederate from larger ones if their mod teams are overwhelmed (obviously this isn’t a good solution but it is something beehaw.org is doing/did with lemmy.world)

In the US, you are innocent until proven guilty. Civil asset forfeiture runs against this idea. The burden should be on the government to prove this stuff is ill-gotten gains, anything else is unamerican.