December 18, Odessa, Ukraine – Bitconist has learned that on the morning of December 15, Ukranian authorities raided the personal residence and office of Forklog founder and CEO Anatoly Kaplan.
A representative of ForkLog, the popular Russian-language crypto news website, reports that Ukranian Security Service (SBU) agents, along with two civilian witnesses, arrived at Kaplan’s apartment in Odessa Friday morning with a warrant. During the execution of the warrant, Kaplan’s premises were searched, during which time the SSU agents confiscated a number of personal items including a notebook and several cold storage devices.
The reason given for the search was a criminal case involving a group of Ukranian and US nationals who were engaging in fraudulent activities involving bank cards. Specifically, the warrant alleged that suspects “exchanged Bitcoin to hryvna (Ukrainian national currency) using online service Forklog.”
Forklog sources have expressed their bewilderment over the charges, insisting that the company has never provided such services and, indeed, does not even have the kind of software and equipment that would be needed. Furthermore, none of the suspects involved in the case have been shown to have any connection whatsoever with Forklog or its founder.
The Search Takes a Disturbing Turn
In what is one of the most disturbing aspects of this situation, Kaplan asserts that one of the SSU agents attempted to transfer his bitcoins from his own storage devices to an unspecified address right in the middle of the search. The agent’s actions were stopped only when Kaplan’s lawyer called the police, alleging robbery.
The next day, however, approximately 305 ETH ($221, 734 USD) was transferred from Kaplan’s wallet – which was still in SSU custody at the time – to a newly created wallet. Kaplan also reported a failed attempt by an unknown party to withdraw 3,000 hryvna ($110) from his bank account using his personal bank card.
Kaplan issued the following statement on the incident:
I believe that this strange situation perfectly illustrates one of the possible scenarios for the state-cryptocommunity relationship. That is why we decided to make it public. It’s not as much about protecting my personal interests as it is about protecting the interests of the entire community. This sends a warning to everyone who is in any way connected to blockchain technologies. It does not matter if you are a public figure.
Right now we are trying to return what we believe was unlawfully seized from us. We find the attempts to transfer cryptocurrencies to wallets controlled by SSU agents to be an extremely strange practice. Other than ETH, large sums in several other cryptocurrencies were moved to freshly created wallets. As to Bitcoin wallets, the situation is not quite clear yet. During the search my lawyer has detected a score of other procedural violations, including turning off the camera.
At the same time that Kaplan’s personal residence was being searched, Forklog’s office in Odessa was also being searched. Confiscated during the search were 10 iMacs, all available cash, and a bottle of Kraken rum.
— crypto_profi (@CryptoProfi) December 18, 2017
Artem Afian, managing partner at Juscutum law firm, promptly expressed his firm’s intent to provide Kaplan with legal assistance. Afian insists that this incident is extremely significant for the entire crypto community:
Financial regulators might still be on the fence regarding cryptocurrency, not being ready to even legally define it yet. But at the same time Ukrainian law enforcement shows that cryptocurrency is a valuable enough asset to conduct an occasional raid in search for it. Traditionally searches and raids conducted on New Year’s eve are linked to jewelry shop heists. But this year cryptocurrency is trending.
Afian also added:
We have no reason to doubt that this search was completely useless in regards to the criminal case in question. By the same logic you could accuse a news channel of gun trafficking on the premise of it running a story about gun trafficking.
Speaking about the events leading up to the search, Afian highlighted the fact that the search was sanctioned only after an investigator made the claim that cryptocurrencies were being exchanged using Forklog. He bluntly asserted that the investigator’s claim is a result of “either blatant incompetence or deliberate obfuscation of facts.” He also noted that these searches were a well-known tactic of Ukranian law enforcement before the reform (pre-Euromaidan).
As to the next steps to be taken, Afian concluded:
We expect a prompt and proper reaction from the authorities and swift return of seized iMacs. As to the return of seized cryptocurrency and SSU agents’ legal liability, I can only say that this will be a highly emblematic and evincive case.
What do you think of this latest development? Will we see more questionable searches and seizures of crypto assets as governments struggle to figure out how to address cryptocurrency? Let us know in the comments below.
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