Legal Issues of Non-Conviction-Based Confiscation of Digital Assets Obtained Through Criminal Means

Abstract

The article discusses the issue of confiscation of property in relation to criminally discovered digital assets (cryptocurrencies, tokens, NFT (Non-fungible token) and other electronic digital rights). Digital assets are a symbol of economic development, security and transparency, investment, and financial democracy. The article analyzes the role of digital assets in the legalization of proceeds from crime. The international The Financial Action Task Force (FATF) standards, of which the Republic of Kazakhstan is a member, are analyzed. One of the urgent legal problems today is the creation of a mechanism for the confiscation of digital assets. The article highlights the importance of creating this mechanism. Examples and cases from practice are analyzed, as well as samples from foreign countries, and the effectiveness of their application in the Republic of Kazakhstan is analyzed. The legal differentiation of the process of preservation and further effective use of digital assets after the mechanism of confiscation is carried out. The effectiveness and legality of storing confiscated digital assets on the Binance Kazakhstan digital asset exchange and the use of cryptocurrencies by law enforcement agencies in crypto exchanges are analyzed. The article explains the importance of secure storage of confiscated digital assets, transparency of information about stored digital assets, and the creation of mechanisms to regulate the emergence of full control over confiscated digital assets in the state. The article defines the significance for the Republic of Kazakhstan of the use of the institution of confiscation (non-conviction based confession) without a court verdict. A legal assessment is given of the conformity of the institution of confiscation of property without conviction with the presumption of innocence and inviolability of property rights.