The Belarusian Ministry of Justice decree on cryptocurrency seizures within enforcement proceedings is unclear and requires clarification. ForkLog said this, citing Denis Aleynikov, senior partner at the law firm “Aleynikov & Partners”.
According to the document (which is in ForkLog’s possession), to enforce the collection the bailiff issues a decision to arrest the debtor’s cryptocurrencies and, if necessary, transfers them to the enforcement body’s virtual wallet or to an exchange.
Aleynikov noted that the regulation is fragmentary and only Bitcoin falls under it, since only Bitcoin is defined in the law as cryptocurrency:
“The point is that in Belarus, crypto assets are defined as tokens under the law, and there is no talk of their seizure. That is, if the bailiff cannot prove that a hypothetical Litecoin is used in international circulation as a universal means of exchange, then it cannot be confiscated.”
The lawyer pointed out that under the law it is unclear who should prove that an asset belongs to a cryptocurrency, and the bailiff “will not be able to figure this out”.
Aleynikov also noted the poorly drafted mechanism for selling cryptocurrencies. The decree states that the transfer of cryptocurrency for further realization is carried out without establishing its value.
“The value of the realized cryptocurrency equals the actual amount of funds credited to the account of the enforcement authority,” the document says.
The expert stressed that it remains unclear who will determine the price of confiscated bitcoins and how this will be done:
“In effect, it’s framed like this: whatever you sold it for is the price. If its determination is opaque, the interests of the person from whom it is seized may suffer. The simplest scenario looks like this — they seize whatever they found. If they seized 10 BTC, they buy and sell 10 BTC for the amount they need.”
The seized assets must be sold through exchanges with their consent. If platforms refuse, the arrest is lifted, other restrictions are lifted on the basis of the enforcement officer’s decree and the cryptocurrency is returned to the debtor.
The decree will take effect on 17 May 2022.
Earlier in February, Belarusian President Alexander Lukashenko signed an order, envisaging the creation of a registry of virtual-wallet addresses used in illicit activity, and outlining the procedure for seizing cryptocurrencies.
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