In contrast to the voluntary track examined in the Adalah case, in our case the end of the matter testifies to its beginnings, and it is a deliberate move of exercising coercive governmental authority against a foreign entity, in a foreign country, and with regard to a foreign account, with the aim of seizing a person's property.
- In this context, it is appropriate to re-examine the matter from the perspective of the principle of reciprocity. Would Israeli law have favorably viewed the "voluntary" activity of the enforcement authorities of foreign countries - without being able to choose which countries, which authorities, and which enforcement actions - to apply to the authorities in Israel, so that they would exercise discretion regarding the infringement of property rights in Israel, when in the second stage the foreign authorities would have acquired control of the property in order to advance criminal proceedings in those countries, and all this without asking the Israeli authorities for permission and even without informing them of this? Not in advance and not after the fact? Moreover, when the victims in Israel were harmed by the enforcement actions, they could not defend themselves against them except by turning to the courts in the foreign country and according to its laws?
It is reasonable to assume that such activity would not have been accepted favorably by the Israeli authorities, who would have discovered a foreign enforcement authority operating in its territory as mature without authorization, coordination or notification.
- In light of this, it is doubtful whether the determination of the trial court, which found that the appellant was obligated to consider the fact that he did not appear in Israel, can stand. The order of things is the opposite. If action had been taken under the Inter-State Legal Aid Law, the injured party would have had the opportunity to defend himself according to the law applicable to his place of residence, whether as a claimant or as a suspect, the company would have been required to appear and clarify its position (for example, with regard to the sources of the assets), and it would have been possible to easily clarify the position of the local enforcement authorities (as allegedly presented in the proceeding here). Once the king's road has been bypassed, one should not complain to the victim who did not forgive the protections that exist to him in his place of residence, and who did not expose himself - without taking appropriate procedure - to the interrogations of the respondent and to the authority of Israeli law, to which there is no dispute that he is not subject.
- I did not find it necessary to give decisive weight to the fact that the appellant did not prove with admissible evidence and beyond a reasonable doubt that he was the owner of the account. Such proof requires his personal appearance in the Israeli court, which in order to oblige him, the respondent had to act in accordance with the Legal Aid between States Law, and request his appearance (subject to the protections set forth in section 26 of this law). Moreover, a requirement that a victim of a proceeding taken without authority prove his ownership and the violation thereof as a condition for clarifying the jurisdiction may leave the action without authority intact, contrary to the public interest that the court is entrusted with.
- When I came to the conclusion that the order was issued without authority, and in any case the decision not to revoke it could not stand, I did not address the question of reasonable suspicion and the question of whether the appellant is an uninvolved 'claimant' or a 'suspect' (by virtue of his claim of ownership of the wallet). Thus, I did not even consider the weight of the opinion he presented regarding the correctness of the purchase of the tokens in his wallet, nor the admissibility and weight of the documents of the Ukrainian law enforcement authorities, according to which there was no defect in his purchase of the tokens.
However, I have found it necessary to comment so as not to imply otherwise, that the evidence presented to me indicates a reasonable suspicion of the existence of the offenses being investigated, which justifies a thorough and vigorous investigation, and it is clear that my above determinations do not point to a flaw in the very existence and advancement of the investigation conducted by the respondent.
- The appellant argued that alternatively, the token of approximately 3,700,000 USDT, which was transferred to the account after it was frozen, should be released without him knowing that it was frozen, without this token having any connection to the suspicions of the interrogees (since it was not claimed that this token was connected to the stolen funds, according to the suspicion), and when it was claimed that the appellant's connection to the criminal affair was only by virtue of his claim that he was the owner of the wallet (i.e., not as involved in the criminal affair under investigation).
This is a weighty argument, since there is a basis for the distinction made by the appellant in this matter, and if the seizure of the account had been made with authority in the first place, there would have been room to present a specific reason for this perception and to clarify it as it should be.
- Before concluding, I found it necessary to return to the argument of the need for urgent investigative activity, in respect of which the trial court found that the respondent should not be expected to sit idly by. As stated, necessity does not confer authority. Between an action under the Legal Aid Law between States and an independent police action in a foreign country without coordination with the state authorities and in any case without their approval, the Israel Police has other options. These include, but are not limited to, drawing the attention of foreign enforcement authorities to suspected criminal activity in their field of activity, and in an appropriate case, even contacting them to conduct an investigation (as a kind of complaint), and possibly also coordinating joint activity of the various enforcement authorities.
- One last note, looking to the future. Indeed, as Dr. Wismonsky found in his book, in light of the challenges arising due to technological development, which has accelerated since the publication of his book in 2015 to an extent that was difficult to predict, "the territorial perception regarding the collection of digital evidence in the framework of a criminal investigation in cyberspace is expressed in a real impairment of the state's investigative ability in cyberspace. It creates a kind of veto rule according to which whenever the digital evidence is stored on a computer outside the territory, the collection of the evidence is an extraterritorial action that deviates from the rules of international enforcement authority" (Wismonsky, ibid., p. 155). However, there is no denying the merits of the territorial "veto rule," which has been at the basis of investigative law in Israel and around the world for many years. It is important to clarify that the opposite, i.e., relinquishing the territorial concept altogether, is liable to lead to a real violation of human rights by circumventing both the protections of the investigating country and those of the country in which the investigation is being conducted. Moreover, if this waiver applies to all countries, investigative chaos is liable to prevail, which will harm, and not advance, the goal of preventing and detecting offenses.
The solution is not found in the ad hoc initiative of one enforcement authority or another, nor in the encroachment of the boundaries of the law from case to case, but in detailed regulation both in domestic legislation and in international conventions. Such an arrangement has existed in various countries for some time now, and it should be advanced as quickly as possible in the State of Israel as well, while establishing real guarantees for the protection of human rights and access to the courts in appropriate cases.
- In the end, the appeal should be accepted. The decision of the trial court of November 27, 2025 is annulled, and with it the order of May 20, 2026 is canceled.
The Respondent will forward a notice of this judgment to Tether, and if requested, it will provide it with a translation.