Rented apartment of Anatoly Kaplan, the founder of the most popular media resource about blockchain and cryptocurrencies in Russian language ForkLog, was searched by the agents of Ukrainian security service (SSU) on December 15, 2017.
Announced reason of the search was using online service ForkLog in criminal activities. SSU agents suspected that a group of Ukrainian and US nationals, engaged in fraudulent activities with bank cards, used ForkLog in order to exchange Bitcoin to Ukrainian national currency Hryvna.
This statement can be considered unreasonable and unproven, as ForkLog is only information resource dedicated to Bitcoin, Blockchain, and decentralized technologies. Forklog doesn’t provide exchange services and doesn’t have the required software.
Moreover, it wasn’t proved that suspects in criminal activity had any connection with ForkLog or its founder.
During the search SSU agents confiscated Mr. Kaplan’s notebook, several cold storage devices and other personal assets. According to Mr. Kaplan one of the agents made attempt to transfer Bitcoins to other address. The agent was stopped only by Mr. Kaplan’s lawyer who called the police because of attempted robbery.
This incident forced Mr. Kaplan to transfer a large sum of ETH to a newly created wallet next day. Mr. Kaplan also informed about failed attempt by an unknown party to withdraw 3,000 Hryvna ($110) from his personal bank card.
“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,” Anatoly Kaplan said.
At the same time, ForkLog’s Odessa office was searched too. As a result, all available cash, expensive equipment (10 iMacs) and a bottle of Kraken rum were confiscated by SSU.
Artem Afian, a founder and a partner of the Ukrainian law firm Juscutum, promptly expressed his intention to provide legal help to Anatoly Kaplan. Mr. Afian insisted that this incident was extremely significant for the cryptocommunity.
“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,” Artem Afian said.
Mr. Kaplan shared Mr. Afian’s opinion that incident with unproven search should be a sigh for cryptocurrency market.
“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,” Mr. Kaplan said.
“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,” Anatoly Kaplan’s lawyer added.
Despite of SSU agents searches, ForkLog continue operation and provide to the readers the latest news in the sphere of blockchain and cryptocurrencies.
The searches of IT companies’ offices and personal apartments of their founders started in 2015, when more than 2,500 highly qualified professionals were forced to leave the country after such inspections. IT sector lost approximately $40 mln due to law enforcement pressure. Equipment damage amounted to $9 mln.
Together with growth of cryptocurrencies in 2017, SSU started mining farms checking, although mining isn’t illegal in Ukraine.