Seizure of cryptocurrency during a search: what to do and how to protect your assets

A search at home or in the office is always stressful. If you hold crypto assets the situation is more complicated: law enforcement may try to gain access to wallets during the investigative action itself. Attorney Vitalii Petryk explains how crypto is seized, what your rights are and what to do to protect your assets.

Key points

• Cryptocurrency is recognised as property in criminal proceedings and can be attached or seized (Articles 98, 167-170 CPC).
• To seize crypto the investigation must hold a court ruling or act within a search authorised by a ruling.
• Without the private key or seed phrase access to a wallet is technically impossible – you are not obliged to provide them.
• Compelling disclosure of passwords and keys breaches the privilege against self-incrimination (Article 63 of the Constitution).
• Seized cryptocurrency can be returned by challenging the attachment or after the proceedings are closed.

Can cryptocurrency be seized during a search?

Yes – but only if the investigation has proper legal grounds. In Ukraine cryptocurrency is treated as property (a virtual asset) and falls under the general CPC rules on attachment and seizure of property (Articles 98, 167-170). A ruling of an investigating judge is a mandatory condition for lawful seizure.

In practice the investigation tries to seize physical media (phones, laptops, hardware wallets such as Ledger or Trezor) and written records of seed phrases or passwords. This is where most legal questions arise.

How do law enforcement technically gain access to crypto?

Possible routes of access to crypto assets:

• Seizure of a device with an open wallet: if during the search a phone or computer is unlocked and the wallet is open, the investigation can record its contents and transactions.
• Seizure of a hardware wallet: Ledger, Trezor and other hardware wallets are seized as physical evidence; without the PIN access to them is limited.
• Discovery of a seed phrase: if a seed phrase (12-24 words) is written down and found during the search, the investigation gains full access to the wallet.
• Request to a crypto exchange: if assets are held on a centralised exchange, the investigation may approach it through legal channels.

What NOT to do and what TO do when crypto is being seized

Do not:

• Move assets yourself during or immediately after the search without consulting a lawyer: this may be treated as concealment of property.
• Provide passwords, PIN codes or seed phrases without a court decision – you have the right to remain silent (Article 63 of the Constitution).
• Destroy media or attempt to wipe data: this worsens the situation and may add new charges.

Do:

• Call your lawyer at once: a lawyer has the right to be present during a search.
• Read the court ruling authorising the search: check the date, the list of property and the limits of authority.
• Record every action of the investigators: what exactly is being seized, which devices, whether a report is being drawn up.
• Demand a copy of the search report listing everything seized.

Can seized cryptocurrency be returned?

Yes. There are several mechanisms for returning crypto assets or lifting measures against them:

• Challenging the attachment (Article 174 CPC): if the attachment is disproportionate or lacks sufficient grounds, it can be challenged before an investigating judge.
• Application for the return of physical evidence: after the proceedings end, or once the evidential value has gone, the property must be returned.
• An acquittal or closure of the case: automatically lifts the attachment and is a ground for the return of the assets.

How to protect crypto assets in advance

A few practical steps to reduce risk:

• Store seed phrases separately from devices and not in digital form on the same gadgets.
• Use hardware wallets with a strong PIN.
• Do not keep all assets on one platform or in one wallet.
• Consult a lawyer about structuring asset storage in line with the law.

Frequently asked questions

Must I disclose my wallet password at the investigator request?

No. Article 63 of the Constitution guarantees the privilege against self-incrimination. Providing a password or seed phrase is self-incrimination. Without a court decision on compelled access you may refuse.

What if the investigation freezes my exchange wallet?

A centralised exchange complies with lawful requests from law enforcement. If your account is frozen, contact a lawyer to challenge the attachment or obtain permission for partial use of the assets.

Can the investigation take crypto from a cold wallet without my knowledge?

Without the private key or seed phrase, technically no. But a hardware wallet may be seized as physical evidence and held until the case ends.

Is there a difference between attachment and seizure of cryptocurrency?

Yes. Attachment restricts the disposal of assets while they remain with you. Seizure means the physical or technical taking of a device or assets. Both measures require a court decision.

How long can an attachment on crypto assets last?

Until it is lifted by a court or until the criminal proceedings end. It can be challenged and lifted earlier if the need has ceased or it is disproportionate (Article 174 CPC).

Read also: Attachment of cryptocurrency: how to lift it | A search at an IT company: rights and algorithm | Legal services

Has cryptocurrency been seized during a search or have your assets been attached?

Attorney Vitalii Petryk provides legal assistance in crypto asset cases, property attachment and criminal defence.

• Phone: +38 (096) 878-07-36
• Email: info@advokat-petrik.com
• Address: Kyiv, Holosiivskyi Avenue 132, RELE Business Centre

This article is informational and is not legal advice. To assess your specific situation, contact an attorney.