Issue link: https://maltatoday.uberflip.com/i/1537460
MALCOLM MIFSUD Mifsud & Mifsud Advocates 8 maltatoday | SUNDAY • 13 JULY 2025 LAW Confiscation can take place without a criminal conviction MALTA'S asset recovery law allows confiscation by the courts even with- out a criminal conviction if the sus- pect is unreachable and the assets are demonstrated to originate from crim- inal activity. This was reiterated in a judgment handed down by Judge Giovanni Grix- ti in the case Chairperson of the Asset Recovery Bureau & Commissioner of Police vs Binance account with user ID 35650310, delivered on 8 July 2025. A person reported to St Julian's po- lice station that they were defrauded through a cryptocurrency investment scam. The victim made a couple of small investments and received quick profits, which led to to larger invest- ments being made. Following this, the victim lost a sig- nificant sum of money when the web- site demanded additional deposits un- der false pretences. Investigations led by the police in Malta, confirmed the site had all the hallmarks of a scam. The police traced some of the fraud- ulent transactions on the Bitcoin blockchain to a Binance wallet. Fol- lowing this report, Binance froze the account in July 2022, noting suspi- cious activity and confirming the wal- let held €8,835 worth of virtual assets. The suspect account holder, Su- laiman Bolaji Ayoola, contacted both Binance and the Maltese Police Force, claiming to be an innocent crypto trader. Despite this and also present- ing screenshots, it was deemed that Ayoola failed to provide credible or verifiable information to prove that he is an innocent crypto trader. This case was eventually brought forward under Article 43 of the Pro- ceeds of Crime Act (Chapter 621 of the Laws of Malta). This allows the State to recover property that is sus- pected to be the proceeds of crime without needing a criminal convic- tion, provided certain legal conditions are met. The court first acknowledged that such action is in rem, meaning it is di- rected against the property itself, not the person. It was directed specifical- ly, against the Binance account and all virtual currencies contained in it. The court emphasised that this type of action does not require a prior criminal conviction, and is instead de- signed to recover assets in situations where prosecution is not feasible, such as when the suspect is abroad or uncooperative. The law empowers the Attorney General to initiate non-convic- tion-based confiscation proceedings when it is not appropriate or not pos- sible to obtain a conviction. This can occur in three circumstances: The suspect is outside Malta or on the run; the suspect is deceased; and the sus- pect dies before criminal proceedings conclude. In this case, the suspect, Sulaiman Bolaji Ayoola, was not in Malta and re- sided in Nigeria. Despite attempts by the Maltese authorities to cooperate via letters, no response was received from Nigerian authorities. This and other factors meant that prosecution in Malta was not feasible. This led the Attorney General to trigger the legal grounds for non-conviction-based confiscation. In order for such action to succeed, the court highlighted two main con- ditions authorities must satisfy: The property was acquired through crim- inal activity; the property meets the definition of "proceeds of crime". In its judgment the court found that the Binance wallet had received cryp- tocurrency obtained via a fraudulent investment scheme, which satisfies the first requirement. Furthermore, the methods of acquisition, transfer and retention of the funds matched the indicators of money laundering as defined under Chapter 373 of the Laws of Malta. Moreover, as previously stated, the suspect also provided no credible ex- planation or evidence of legitimate ownership or business activity. The court therefore was satisfied that the virtual funds were proceeds of fraud and money laundering, which qualifies them as confiscable assets under Article 43(2)(b) of Chapter 621. Although no defendant appeared to contest the action, the court carefully examined the evidence to avoid con- fiscating property that may have been lawfully acquired. The court also affirmed that the bur- den of proof lies on the State, even in non-conviction-based proceedings. This burden according to the courts had been adequately proven. The sus- pect's failure to explain the source of the funds, and the suspicious struc- ture of the transactions, supported the inference that the funds were pro- ceeds of crime. Therefore, with all this in mind, the court ruled that the Binance account and all virtual currencies within it, constitute property subject to con- fiscation under Article 43(2)(b) of Chapter 621. Furthermore, it ordered that the account and its contents shall be transferred to the Government of Malta and also imposed legal costs against the virtual account. The court first acknowledged that such action is in rem, meaning it is directed against the property itself, not the person. It was directed specifically, against the Binance account and all virtual currencies contained in it.