The mechanisms for the seizure and subsequent sale of digital assets envisaged in the decision of the Belarusian Ministry of Justice on the repurchase of cryptocurrencies as part of enforcement proceedings are incomprehensible and need to be clarified. Denis Aleinikov, senior partner at law firm Aleinikov & Partners, told ForkLog.

According to the document (available on ForkLog), for recovery, the bailiff orders the debtor’s cryptocurrencies to seize and “transfer them to the bailiff’s virtual wallet, if necessary,” or exchange them.

Aleinikov noted that the regulation is fragmented and only falls under bitcoin as it is registered as a cryptocurrency only in the legislation.

“The fact is that in Belarus, according to legislation, tokens are called crypto assets, but there is no mention of their withdrawal. That is, unless the bailiff can prove that the conditional Litecoin is used as a universal medium of exchange in international circulation, it cannot be confiscated.”

The lawyer stated that it is unclear who and how under the law must prove that an asset belongs to cryptocurrencies, and that the bailiff “cannot definitively figure this out.”

Aleinikov also pointed out the poorly written mechanism for selling cryptocurrencies. The decision says that the transfer of the cryptocurrency for further applications is carried out without determining its value.

“The value of the realized cryptocurrency is the actual amount of funds deposited in the account of the enforcement authority,” the document says.

The expert emphasized that it remains unclear who will determine the price of the seized bitcoins and how:

“Actually, it’s formulated like this: That’s how much they sell, that’s the price. With its incomprehensible definition, the interests of the person seized may be harmed. The simplest situation looks like this – what did they find from him, then they took it. If they buy 10 BTC, they get 10 BTC and sell as much as they need.”

Seized assets must be sold through exchanges with their consent. If the sites refuse, “the arrest is lifted, other restrictions are revoked based on the bailiff’s decision, and the cryptocurrency is returned to the borrower.”

The regulation will enter into force on 17 May 2022.

Recall that in February, the President of Belarus Alexander Lukashenko signed a decree providing for the creation of a register of addresses of virtual wallets used in illegal activities, as well as establishing the procedure for seizing cryptocurrencies.