At 8 in the morning on December 15, agents of Ukrainian security service (SSU) along with two civilian witnesses entered Anatoly Kaplan’s rented apartment and conducted a search. Mr. Kaplan is well-known in the crypto community as the founder of the most popular Russophone media resource on blockchain and cryptocurrencies ForkLog.
The alleged reason for the search was a criminal case involving a group of Ukrainian and US nationals who engaged in fraudulent activities with bank cards.
According to Ukrainian security service suspects “exchanged Bitcoin to hryvna (Ukrainian national currency) using online service ‘Forklog’”. Representatives of cryptomedia expressed bewilderment over this statement, noting that neither the main site, nor sites associated with Forklog have ever provided such services and do not even have the required software. Furthermore, none of the suspects were proven to have any connection with Forklog or its founder.
During the search SSU agents confiscated Mr. Kaplan’s notebook, several cold storage devices and other personal belongings. According to Mr. Kaplan one of the agents tried to immediately transfer his Bitcoins to a different address right in the middle of the search. The agent was stopped only when Mr. Kaplan’s lawyer called the police, alleging robbery.
Still, the next day a large sum of ETH was transferred from Mr. Kaplan’s wallet (http://etherscan.io/address/0x34972356af9b8912c1dc2737fd43352a8146d23d) to a newly created one (http://etherscan.io/address/0x5afacaa2c4e41db37dd792d1295226f0749bb784). Mr. Kaplan also reported a failed attempt by an unknown party to withdraw 3,000 hryvna ($110) from his personal bank card.
“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”, – says Anatoly Kaplan.
At the same time Forklog’s Odessa office was also being searched. As a result all available cash, expensive equipment (10 iMacs) and a bottle of Kraken rum were taken by SSU.
Artem Afian, Juscutum lawyer firm’s managing partner, promptly expressed intent to provide Anatoly Kaplan with legal help. Mr. Afian insists that this incident is extremely significant for the cryptocommunity at large.
“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.
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”, – comments Artem Afian
Mr. Afian also highlighted the fact that the search was sanctioned following the investigator’s claim that cryptocurrency was exchanged using Forklog media resource.
“On investigator’s part this is either blatant incompetence or deliberate obfuscation of facts. Such searches were a well-known M.O. of Ukrainian law enforcement before the reform (pre-Euromaidan). Many IT companies have already lived through this nightmare a few years ago even though today Ukraine’s accomplishments in IT sphere are celebrated even on state level.
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”, – concluded Anatoly Kaplan’s lawyer
The searches season in IT companies offices and personal apartments of the industry’s figureheads started as early as 2015, when more than 2,500 highly qualified professionals were forced to leave the country. One of the most illustrative cases was the search conducted in the apartment belonging to Kuna Bitcoin Agency’s founder Michael Chobanian. The alleged reason for that search was a criminal investigation pertaining to Bitcoin trade information located on Michael’s site.
According to various sources, the IT sector lost approximately $40 mln due to law enforcement pressure. Damage pertaining to destruction and seizure of expensive equipment amounted to $9 mln.
Due to exponential growth shown by cryptoindustry in 2017, SSU also started targeting mining farms, even though mining is not illegal in Ukraine.
Despite all odds Forklog will continue providing its loyal readers with quality content and latest news from the world of blockchain tech and cryptocurrencies. Stay tuned.