Successful defense of major crypto company against asset freezing

Our Dispute Resolution team achieved a victory in having the arrest of our client’s funds, who provides fiat (traditional currency) transaction services, lifted.

The prosecutor conducting the pre-trial investigation had decided to impose an arrest on the client’s assets after the individuals recognized as victims in the investigation purchased crypto assets, subsequently transferred them to unidentified third parties, and claimed to have lost their property because of criminal activity.

The appellate court examined our client’s complaint against the pre-trial judge’s order, which had extended the temporary restriction of property rights on the client’s funds held in an electronic money institution’s account.

The court found that there was no evidence that the client had unlawfully acquired the victims’ funds; the victims had merely used the fiat services provided by the client and later voluntarily converted their funds into cryptocurrency and transferred them to third parties. Accordingly, the court, agreeing with the arguments presented by our team, established an important precedent that there is no basis to impose a temporary restriction on the client’s property rights to secure the return of allegedly unlawfully obtained assets.

The court overturned the first-instance decision and dismissed the prosecutor’s request to extend the temporary restriction of property rights, fully lifting the measure.

This ruling is the first of its kind concerning the arrest of fiat funds connected to the transfer of crypto assets during a pre-trial investigation. It will gain precedential significance in other similar judicial and pre-trial proceedings, particularly in addressing issues related to the protection of victims of fraud and the potential legal consequences for companies providing crypto-related services.