Ukraine's Cryptocurrency Arrest Procedures Break Down in Criminal Proceedings
Courts in Ukraine are applying different approaches to arresting cryptocurrency for the purpose of preserving evidence in criminal proceedings. In some cases, courts consider cryptocurrency as physical evidence that can confirm circumstances of a crime and therefore subject it to arrest. However, other judicial practices recognize funds in crypto wallets as individualized material objects, leading to the conclusion that they cannot be arrested.
The National Association of Advocates (NAAU), together with representatives from the National Police and ARMA, discussed problematic issues regarding searching, arresting, preserving, and returning virtual assets. A major concern is the actual execution of court decisions, as blocking funds on a crypto wallet does not guarantee their preservation since third parties may have access to them.
According to the NAAU, some investigative judges simultaneously issue decisions on the arrest of assets and their return to the victim. However, this possibility is not directly regulated by the current Criminal Procedure Code. In one case, a court obliged a crypto exchange to transfer arrested cryptocurrency to the victim's wallet for responsible storage.
Blockchain analytics materials are also a subject of discussion. While they allow tracking transfers between wallets and further movement of assets through exchanges or other services, the transaction record itself does not prove that a particular wallet was controlled by a specific person or that they carried out the corresponding operation.