However, in our case, the transfer of the information gave the authorities in the United States the ability to "cryptographic control" which has the power to unilaterally expropriate the appellant's property right, and this was the case in practice. This means that the transfer of the information gave the authorities in the United States the power and ability to immediately expropriate his property from the appellant. The same realization potential, simple, one-sided, and quite obvious that was granted to the authorities in the United States highlights the property element in the material being transferred.
Bitcoin's foundational features, as reviewed above, sharpen the gap between the example of "stealing a bank account password" and receiving the wallet's recovery kernels. The person who owns the reconstruction kernels also controls the coins, and he becomes the new owner. In contrast to the bank account, it is clear who owned it yesterday and today, even if someone obtained the password and carried out actions with it without authorization.
In this context, the defense referred to the indictment filed in Israel by the State Attorney's Office (Cyber Division), which accuses another defendant of stealing recovery cores "with the aim of permanently denying control of virtual currencies."
In this case, the US authorities also referred to the reconstruction nuclei as part of their request for seizure for the purpose of forfeiture there. The reconstruction nuclei themselves were indicated as occupied.
Relevant Computer Material - Mixed and Dual-Material
- In my opinion, the information about the "Bitcoin" found by the investigative authorities in Israel and transferred to the United States is considered "dual-essential" material. Indeed, this is not property in the classical sense of the word, but rather a technological tool that provides access to virtual assets. On the one hand, it is clear that it embodies information within the framework of evidence or investigation material, but on the other hand, almost in the same breath, it is information with proprietary characteristics and indicators. Therefore, in my view, and in light of Bitcoin's unique characteristics, the information transferred to the United States has integrated components: evidentiary but also proprietary. It is therefore a "mixed" material. Since the restoration nuclei have access to virtual assets, there is a property component in them. On the other hand, I do not believe that this is such a pro-dominant element that it has the power to cancel or overshadow the evidentiary component.
What is the law regarding "mixed" material in the context of the Legal Aid Law?
- This is a complex question. On the face of it, this is an intermediate hierarchy between a copy of an object on the one hand, and forfeitable property at the other end. According to the Legal Aid Law, and the case law that referred to it, it appears that this is an object whose owner may raise a proprietary claim regarding its right to the property. In the Mazar case, it was held:
"The two sections deal with different situations. Section 29 applies in the ordinary state of affairs where various documents are transferred in the course of the investigation proceedings, while section 30 of the Law - which refers to the provision of section 19 of the Law - applies when it comes to the object itself (or an original document), in respect of which a right holder may raise a contractual or proprietary claim of one kind or another, regarding his right to the property."