Hefetza Claim 65435-03-26 State of Israel v. Artyom Nadurenko - part 3

(See: Manger, p.  262-261)

30. In the world of cryptocurrencies, trading with Bitcoin is very similar to trading in the distant past using silver and gold. Bitcoin is a creation of computer programming based on a mathematical algorithm that created a computer communication protocol shared by thousands of computer systems that make up a network.  Together, these systems act as decentralized digital ledgers (blockchains), independently documenting and verifying each and every transaction.  In this framework, which is free from government agencies and is based on a private mechanism of conventions, there is no private entity that can fake a Bitcoin transaction without imposing itself, beforehand, on most of the systems on the network - a move that does not seem realistic.  The movement of each Bitcoin coin is documented from its inception in each of the channels of the blockchain systems, in a way that allows any user of the network to track the currency transfers between the various digital wallets of private entities, who are able to maintain anonymity (see in this regard: A.  82202-07-25 Block v.  State of Israel, para.  2 [Nevo] (March 8, 2026)).  The number of bitcoins has been pre-limited to 21,000,000, creating a permanent shortage of coins, along with the ease of holding and transferring them.  (See:Christin R.  Böhme, et al., Bitcoin: Economics, Technology, and Governance, 29 J.  Econ.  Persp.  213 (2015)).  In view of the similarity between the structure of Bitcoin trading and the ancient trading of precious metals, it is therefore no wonder that Bitcoin has been nicknamed "digital gold" (Isaiah Austin, The "Digital Gold" narrative sells Bitcoin short, Bitcoin Magazine, May 12, 2025, https://tinyurl.com/3ccrcj42).
31. Bitcoin currencies are not tied to any centralized entity, such as a financial corporation or a country. The reliability of these currencies as economic value, which incentivizes investment by individuals, is derived from the multi-armed decentralization mechanism and the power of the mathematical algorithm that created the coins as a virtual economic asset, limited their number, and designed trading protocols through them, which prevent counterfeiting.  Accordingly, the value of the coins is derived from the amount of conventional money that a party to the transaction is willing to pay for them.  These features distinguish bitcoins from cryptocurrencies that are created using similar technology - those that fall, for example, into the category of "stablecoins", which includes the currency associated with Tether, whose value is pegged to the US dollar (for more information: Jess Cheng, How to Build a Stablecoin: Certainty, Finality, and Stability through Commercial Law Principles, 17 Berkeley Bus).    J.  320 (2020)).  The reliability of cryptocurrencies associated with financial companies is derived, among other things, from the company's belief, that its operation is somewhat similar to that of a bank.  Trading using cryptocurrencies associated with a company is therefore more similar to conventional trading that is carried out using securities or ordinary money (see in this regard the statements of the US Securities and Exchange Commission, as they appear in the report of the Committee for the Examination of the Regulation of the Issuance of Cryptocurrencies to the Public, Interim Report 53 (2018)).  Companies that issue cryptocurrencies must therefore maintain a reputation as a legitimate and reliable financial entity.  Hence the incentive of the companies to cooperate with official state bodies, such as the police, which are responsible for law enforcement, the prevention of criminal and terrorist acts, and the thwarting of money laundering carried out by criminals and criminal organizations.  Such an incentive does not exist in Bitcoin's decentralized network - a coordinated multi-participant mechanism that is not controlled by a single entity.
32. As a result, transfers of large sums of money to a conventional bank account from Bitcoin wallets raise suspicions of money laundering - which creates a reluctance to carry out such transactions with the banks. This reality creates an incentive for those interested in opening digital wallets to do so with companies such as Tether.  Naturally, this incentive exists not only for legitimate investors but also for criminal elements who want to hide the source of their money.

0

33. The detection and seizure of digital wallets by the police, when it comes to enforcing the criminal law, encounters many difficulties. Bitcoin is not a currency or a bill of money that you can touch to grasp: it is a virtual asset that does not have a defined geographical location.  This property can be accessed mainly by a computer operated by the property owner or by someone who has the password generated by the property owner.  The voluntary disclosure of this slogan by a criminal suspect in the course of his interrogation is relatively rare.  Obtaining this password through computer programs is usually impractical, due to the length of the password and the way it was created, which are intended to make it difficult to discover in order to secure the digital wallet owner's money and to protect his privacy.  A criminal suspect is also not obligated to disclose this slogan to his interrogators, since he enjoys the right to remain silent and the immunity from self-incrimination (see: section 2(2) of the Criminal Procedure (Testimony) Ordinance); Sections 47(a) and 52 ofthe Evidence Ordinance [New Version], 5731-1971; as well as Criminal Appeal 663/81 Khoury v.  State of Israel, IsrSC 36(2) 85, 90-92 (1982); Additional Criminal Hearing 3898/90 Zilberberg v.  State of Israel, IsrSC 46(2) 24 (1992); Daniel J.  Seidmann & Alex Stein, The Right to Silence Helps the Innocent: A Game-Theoretic Analysis of the Fifth Amendment Privilege, 114   L.  Rev.  430, 475-480 (2000)).
34. Similar difficulties face the police in the search and seizure of digital wallets associated with a financial company that holds cryptocurrencies. However, in such cases, voluntary cooperation with the company, according to the outline that was done in this case with Tether, or some other agreed outline, may help the police.  This is especially true in light of the desire of at least some of such companies to maintain their reputation as legitimate and law-abiding financial entities, and in this way protect the value of the cryptocurrency traded by them.
35. This is the place to move on to a discussion of the legality of voluntary outlines as mentioned.

The Specific Certification Requirement - When?

36. A public authority is entitled to act only within the framework of the provisions of its powers established by statute (High Court of Justice 1/49 Bejarano v. Minister of Police, IsrSC 2 80 (1949) (hereinafter: the Bejarano case)).  These powers are sometimes formulated in a general and broad manner, such as section 3 ofthe Police Ordinance.  In other cases, such powers are formulated in a focused manner, such as the power of a police officer to arrest a person without a court order (see and compare: Section 23 ofthe Criminal Procedure Law (Enforcement Powers - Arrests), 5756-1996).  In this framework, the action of a governmental authority that comes to detract from the right of the individual - a coercive action that the individual opposes - must be based on an explicit authorization given to the authority by law or by virtue thereof.  In the absence of such authorization, the authority's action will have no legal validity (see: Additional Administrative Hearing 5519/15 Younes v.  Mei HaGalil Regional Water and Sewage Corporation Ltd., paragraph 23 of the judgment of Deputy President   Hendel [Nevo] (December 17, 2019); High Court of Justice 4455/19 Tabka Association - Justice and Equality for Ethiopian Immigrants v.  Israel Police, paragraph 15 of the judgment of President E.  Hayut and paragraph 4 of the judgment of [Nevo] (January 25, 2021) (hereinafter: the Tabka case); Assaf Harel, Dual-Essence Bodies and Officers, at p.  68 (2nd edition, 2019)).  On the other hand, insofar as it is not a coercive governmental act, it is possible to suffice with general authorization (see: Adalah case, paragraphs 41-42).
37. In order to decide whether we are dealing with a coercive governmental act, we must examine the intensity of the coercion that derives, inter alia, from what the court called in the Adalah case "a disguised administrative act and coercion in practice" (see: the Adalah case, paragraph 43 of the judgment of Vice-President Meltzer).  Such an administrative act is a governmental action that comes under the guise of an action that is not coercive, but in practice is perceived by its recipients as having a coercive significance - when the individual may be concerned about regulatory sanctions that will be applied against him or of the revenge of the administrative authority, if he does not respond to its request.  A clear example of such action is the decision of the Attorney General of the United States Government, which has since been rescinded, according to which the federal government will not enter into contracts with a corporation that refuses to provide law enforcement with the information they need, based on legal privilege of one kind or another (see: Richard A.  Bierschbach & Alex Stein, Overenforcement, 93 Geo.  L.J.  1743, 1775n.152 (2005)).
38. This important distinction was summarized in the Adalah case in the following words:

"As described above, in situations where we are not dealing with a 'disguised governmental act' and in fact coercion, which is liable to be nullified due to the absence of statutory authorization, it is certainly possible that a completely voluntary action, the result of which is entirely dependent on the exercise of independent discretion on behalf of the external party to which it is turned - does not require individual and explicit authorization for this purpose in the law, and therefore it would suffice, for example, to have the residual power granted to the government by virtue of section 32 of the Basic Law: The government.  For example, according to this approach, the Cyber Department's requests to external platform operators are not substantially different, for example, requests from Israeli security and diplomatic bodies from their foreign counterparts, so that they may act, for example, to thwart the plots of hostile foreign elements seeking to harm the State of Israel, abroad, or in Israel (on the actions of authorities by virtue of the general authority in section 32 of Basic Law: The Government, or by virtue of section 17 of the Interpretation Law - see: Shimon Shitrit The Government: The Executive Branch, Commentary on the Basic Law: The Government Chapter 18 (Yitzhak Zamir ed., 2018)) (Adalah case, para.  50).

39. The legal doctrine created by this distinction would be well understood if it was represented in the analytical framework of rights, freedoms, and powers constructed by Hohfeld (see Wesley Newcomb Hohfeld, Some Fundamental Legal Concepts as Applied in Judicial Reasoning, 23 Yale L.J. 16, 30-33 (1913)).  When a state punishes a corporation that refuses to cooperate with it in the enforcement of criminal law by not granting any franchise or by removing it from the list of those eligible to enter into contracts for the provision of services or goods to the state, it deprives that corporation of its right to compete for the franchise or contract on terms equal to all competitors.  The denial of this entitlement stems from the state's exercise of legal power - an act that unilaterally changes the status of the individual's rights.  For this reason, it must be ensured that the state has been authorized by the explicit language of the statute to exercise its power, as it has chosen to do.

The situation will be completely different when the state does not pose any threat to anyone, as happened in the case before me.  In this case, the Israel Police did not use any legal force against anyone and did not change the status of the rights of the respondent or the company.  Tether.  What was exercised by the police was its freedom of action (privilege) which, as distinct from power, does not create any subordination in anyone and does not detract from his rights.  On the other hand, "freedom" is the "lack of right" to interfere with the realization of liberty by its owners; and the Hochpaladian phrase "lack of right" (no-right) accurately describes the legal status of the respondent in question in the framework of the tripartite relationship that includes him, the Tether, which acted, as it did, of its own free will, and the Israel Police.  The respondent has no right - and never has had - any right to prevent the Israel Police from trying what it tried and succeeded in doing vis-à-vis the Tether.  As to the legal relationship between this company and the respondent - these are not the concern of the Israel Police and cannot detract from the freedom of action granted to it within the framework of the Section 3 30Police Ordinance.

40. The present case is therefore no different from the one discussed in the Adalah case, in which the cyber unit that operated in the Israeli Ministry of Justice persuaded the owners of various internet platforms to remove anti-Israeli content from the platforms. This persuasion was voluntary and came within the boundaries of the legal freedom that was given to the unit.  This freedom did not include the power of coercion, as opposed to voluntary persuasion, and in any case did not detract from anyone's rights.  What happened in that case, and here too, is what usually happens in the world of freedoms: each party makes use of its own freedom and acts as it sees fit, being influenced, on a factual level, by what the other factor decides to do or not to do within the boundaries of its own freedom.  For this reason, the aforementioned activity of the Cyber Unit did not require specific statutory authorization, and therefore approval was given for its reliance on general authorization in a wording similar to that of Section 3 of the Police Ordinance.  As a result, Adalah's claim of infringement of freedom of expression (which in any case was not hers) was rejected.  Without coercion, there is no harm.
41. The existence of formal authority with the authority is not recognizable. The basic concept is that the authority must exercise its authority not only in the case of its mothers (see: the Bejarano case), but also for the purpose for which the authority was granted and for practical reasons (see: Dafna Barak-Erez, Administrative Law,   2, 635 (2010)).  In the present case, given the reasonable suspicion that the digital wallet in question was connected to criminal activity - a suspicion that is not in dispute - the Applicant acted, without a doubt, for practical considerations when she requested what she asked of Tether.
42. As already pointed out by me, the Applicant has not exercised any governmental power which could have changed the legal status of Tether. However, if we had thought that there was doubt in this matter, we should have examined whether we are dealing with "an administrative act disguised and coercive in practice" (Adalah case, paragraph 43 of the judgment of Deputy President   Meltzer).  The question is whether Tether could have understood the Applicant's request as having coercive significance, while fearing regulatory sanctions of one kind or another.  In my opinion, the answer to this question is no.  First, Tether is a foreign corporation that does not operate in Israel and is not subject to Israeli law; therefore, the Applicant - the Israel Police - does not have a "regulatory sword" or similar means that could have threatened this company.  Second, Tether itself demanded to receive an Israeli judicial order in order to freeze the wallet; and even for this reason, the Applicant's action, which complied with Tether's demand, cannot be considered a coercive act.  Therefore, there is not even a shadow of a doubt as to whether this is a governmental act that constitutes coercion, and which therefore requires explicit statutory authorization.  From this it clearly emerges that in the circumstances of the present case, it is possible to suffice with the general authority of the police, which is set forth in section 3 of the Police Ordinance.
43. Section 3 of the Police Ordinance, quoted above, defines, in detail, the general functions of the Israel Police (see: Criminal Appeals Authority 10141/09 Ben Haim v. State of Israel, IsrSC 65(3) 305, 328 (2012)).  This section constitutes the basis for the powers of the police to take any action that advances its missions without imposing anything on the individual.  The provisions of this section therefore enabled the police to contact Tether with a request for voluntary cooperation, in the framework of which the wallet would be frozen in accordance with the company's decision (as opposed to the police's action as an act of governmental coercion).  This conclusion is also supported by the opinion of the majority justices in the Tabaka case, President   Hayut and Vice President H.  Meltzer.  My opinion on the matter discussed in Parashat Tabka differed from that of the majority, however, as we have learned long ago, "to follow the multitude" (Shemot 23:2).
44. I will not ignore the possibility that Tether does not act of complete free will, since the very existence of the police's request - which comes on behalf of the State of Israel - to freeze its wallet puts pressure on it in terms of reputation, and may even threaten its business. It can certainly be assumed that Tether freezes digital wallet accounts out of various interests that affect its judgment, and not necessarily for a purely voluntary motive.  However, such pressures do not amount to coercion: the "game" played by them is a game of interests.  In my opinion, there is no doubt that Tetherhas an interest in maintaining good and proper relations with the State of Israel and its arms.  Such an interest could certainly have provided the company with a reason to accede to the Applicant's request, but similar to what we know from contract law, it does not amount to a detraction from its free will.  As stated in the context of contract law, "in everyday life, few contracts are concluded out of absolute freedom of will" (Gabriela Shalev and Effi Zemach Contract Law, at p.  281 (2019); Civil Appeal 6234/00 A.P.  In Tax Appeal v.  Bank Leumi Le-Israel Ltd., IsrSC 57(6) 769, 787 (2003)) - and this is also the case in our case.  As noted, this matter is no different from the issue that was discussed and decided in the Adalah case: the Ministry of Justice's cyber unit appealed to various operators of the websites to remove anti-Israeli content.  Some of these operators, obviously, chose to remove the offensive content in order to maintain good relations with the State of Israel as a powerful body.  However, the existence of such an interest and its exploitation by the state for its own benefit do not amount to detracting from the free will of the operators.
45. This is the place to move on to the question of the legality of the freeze order that was used by the Applicant in her application to Tether. Before I do so, I will briefly discuss the normative framework necessary for the matter.

Freezing Order - The Normative Framework

46. Section 1 of the IPC defines "object" for the purposes of its perception as a term that includes its natural and basic meaning, "including a certificate, document, computer material or animal". Accordingly, the language of the term has been interpreted extensively, in a way that also applies to a balance of credit in a bank account as something that can be frozen and seized by virtue of a judgment (see: Miscellaneous Criminal Applications 5015/99 Association of Independent Jurists v.  State of Israel, IsrSC 55(1) 657, 665 (1999)).  It was also held that a decision regarding the seizure of an object may come by virtue of various pieces of legislation (see: Miscellaneous Applications Criminal 3190/14 Shimon v.  Israel Police, para.  6 [Nevo] (June 25, 2014)).  In this framework, as stated in section 32 of the IPC, there are five independent grounds for the seizure of an object by the police; and these are: the existence of a reasonable basis to assume that an offense was committed with that object; a person is about to commit an offense with it; the object may serve as evidence in a legal proceeding due to a criminal offense; the object is given as a reward for committing an offense; or as a means of committing it (see in this regard: Miscellaneous Criminal Applications 5605/21 Shteiwi v.  Israel Police, Paragraph 8 [Nevo] (September 9, 2021); Miscellaneous Applications Criminal 7992/22 Nuri v.  State of Israel, para.  7 [Nevo] (March 1, 2023)).  Alongside these grounds, an additional cause of seizure was formulated in the case law by virtue of the provision set forth in section 26(a) of the Prohibition of Money Laundering Law, 5760-2000 (see: Criminal Appeals Authority 4526/18 Elovitch v.  State of Israel, para.  12 [Nevo] (August 5, 2018) (hereinafter: the Elovitch case)).  When the power to seize an object comes by virtue of section 32 of the IPC, as a rule, although not necessarily, it requires a judicial order (see: Elovitch, paragraphs 13-17; and compare: Miscellaneous Criminal Applications 6686/99 Ovadia v.  State of Israel, IsrSC 55(2) 464, 475 (2000); Criminal Appeal Authority 7600/08 Avram v.  State of Israel, para.  12 [Nevo] (August 13, 2008) (hereinafter: the Avram case); Miscellaneous Criminal Applications 8353/09 Magalnik v.  State of Israel, para.  7 [Nevo] (November 26, 2009); Miscellaneous Applications Criminal 9420/16 Shmuel v.  State of Israel [Nevo] (January 16, 2017).
47. In our case, as stated, the Magistrate's Court decided to issue an order, at the request of the police, to freeze the digital wallet, which allegedly belongs to the respondent, which is held by Tether. This is by virtue of the authority enshrined in sections 32, 34 and 43 of the Prevention of Money Laundering Law.  In a parenthetical article, I will add that in my own understanding, the authority to search a digital wallet, and by the way, seize a digital asset, is also found in sections 23, 23A and 24 of the PSDP, when they are read together.  In addition, I do not see any difficulty in the Magistrate's Court issuing a formal order confirming the powers of the police to act within the framework of section 3 ofthe Police Ordinance for Voluntary Cooperation with any external entity that has the power to bring about the freezing of a digital asset tainted by criminality.  Such orders have intra-state territorial application in the following sense: they constitute a reference to the seizure of the digital asset, the freeze of which was requested by the police in a voluntary proceeding, if and when it is transferred to its possession.

Therefore, it is clear, in my opinion, that the new freeze order, which the Applicant presented in the hearing that took place before me - and earlier, before the courts below - is an order that is properly drafted and does not give rise to any problem of authority.

48. and back to the original freezing order issued in the present proceeding by the Magistrate's Court. The Magistrate's Court's decision regarding the issuance of such an order was given ex parte on the standard police application form.  The content of this form includes instructions that may be believed to be directed at Tether, although this is not explicitly stated.  According to the respondent, who, as stated, relies on the District Court's ruling, the wording of this order has a defect of deviation from authority that necessitates the invalidity of the order.  On the other hand, the Applicant agrees that the order is not drafted "optimally" (transcript of the hearing of April 20, 2026, p.  7, Q.  2-1; p.  16, s.16), however, according to her, it is possible and appropriate to allow it to be corrected in light of the nature of the defect and the sequence of events in the fraud case in which we are concerned.
49. I am of the opinion that the law applies to the Applicant in this matter as well; I will elaborate.

The Defect in the Wording of the Order and Its Result

50. The defect in the order can lead to the conclusion that this is an action that amounts to exceeding authority - the authority of the applicant and the authority of the Magistrate's Court (see and compare: Yitzhak Zamir, Administrative Authority, Vol. 5 - Grounds for Legal Review 3631-3632 (2020) (hereinafter: Zamir); see also: Yoav Dotan, Judicial Review of Administrative Discretion, Vol.  I, 375-376 (2022)).  However, this defect can be classified as an honest technical error that occurred in the exercise of the authority.  In such a case, there is a functional test in which "the function imposed on the court [...] and whether he would have fulfilled this function when he decided to amend the registration order as it was amended, and not according to the approach: what is the content of the order he gave and whether this content is consistent with the definition of a 'registration order' in the law" (High Court of Justice 203/57 Rubinsky v.  Authorized Officer under the Condominiums Law, IsrSC 12 1668, 1674 (1958); and see also: Zamir, 3639-3637).
51. In the circumstances of the present case, the role played by the Magistrate's Court concerned the issuance of an order regarding the freezing of the wallet at the request of the Applicant. Ostensibly, the flaw in the wording of the order fell within the framework of the exercise of the court's function.  However, even if it appears on the face of it that the Magistrate's Court purported to order actions to be taken outside the territory of Israel, it is clear to any reasonable person that it did not have the authority to instruct a foreign company located outside Israel's borders to do anything (see and compare in this regard: Civil Appeal 1062/20 State of Israel v.  Simon, para.  33 [Nevo] (November 11, 2021); Civil Appeal Authority 778/03 Inter-Lab in Tax Appeal v .  Israel Bio Engineering Project, IsrSC 57(5) 769, 773 (2003)).  The Magistrate's Court was evidently aware of this and therefore held, inter alia, that "the order is not binding on Tether" (paragraph 44 of the Magistrate's Court's decision).
52. Despite the aforesaid, a review of the freeze order alone, as drafted, shows that it includes binding provisions directed at any financial corporation - a wording that also includes Tether. This literal understanding of the order leads to the conclusion that the Magistrate's Court exceeded its territorial jurisdiction.  The problem is that even if I go a long way and leave it in favor of the respondent, because this is the case - the defect in the order does not lead to its nullity from the question.  As I will explain shortly, we are dealing with a defect that can be corrected by issuing a new order that is properly drafted.
53. This type of amendment is the result of the doctrine of "relative nullity" that has taken root in our districts and has found its place not only in the place of birth - administrative law - but also in criminal law (Criminal Appeals Authority 2413/99 Gispan v. Chief Military Prosecutor, IsrSC 55(4) 673, 687 (2001) (hereinafter: the Gispan case); Criminal Appeal 10189/02 Anonymous v.  State of Israel, IsrSC 60(2) 559, 567 (2005); Yaakov Kedmi on Criminal Procedure - Part Two - Post-Indictment Proceedings -  1232 (updated edition, 2009)).  This doctrine has also been applied to search and seizure warrants (see: Miscellaneous Criminal Applications 9022/16 Grika v.  State of Israel, para.  5 [Nevo] (December 22, 2016); Criminal Appeals Authority 4526/18 Elovitch v.  State of Israel, paragraphs 24-26 [Nevo] (August 5, 2018)).  At the same time, this doctrine has laid out its scope for various types of defects in the authority's decisions that include deviation from authority (see: Criminal Appeal 866/95 Susan v.  State of Israel, IsrSC 50(1) 793, 816 (1996); Gispen, at p.  686; High Court of Justice 1555/05 Levy v.  Tel Aviv District Regional Rabbinical Court, paragraph 45 of the judgment of Justice A.  Procaccia [Nevo] (July 16, 2009) (hereinafter: the Levy case)).
54. The theory of relative nullity distinguishes between the existence of a defect in the decision of an authority or a court - and the result of the defect. The result of such a defect depends on the circumstances of the case, the essence of which is the nature of the defect and its consequences, including infringement of vested rights (see: Gispen, at p.  685; the Levy case, paragraphs 45-46; Criminal Appeal Authority 523/13 Dezanashvili v.  State of Israel, paragraph 33 of the judgment of Judge   Melcer [Nevo] (August 25, 2015); Appeal Petition/Administrative Claim 5106/14 Bat Yam Municipality v.  Sasson et al., para.  10 [Nevo] (September 3, 2015); Criminal Appeals Authority 2696/17 Shor v.  State of Israel, para.  27 [Nevo] (June 17, 2021)).  Therefore, the degree of severity of the defect is likely in the circumstances of one case to lead the court to the conclusion that the decision is null and void, and on the other hand, that it should be left in place.  In addition, the court is entitled to "maneuver between many types of relief as is required in the circumstances of the case.  Among other things, even if there is a serious flaw in the administrative decision, the court can refrain from declaring nullity and suffice with returning the matter in question to the authority that made the decision, with an instruction to correct the defect or reconsider the matter in light of the court's comments" (Yitzhak Zamir, Administrative Authority, Vol.  4 - Procedures for Judicial Review, 2998-2999 (2017)).
55. And what is the meaning of the striking? In the circumstances of the present case, it can be easily seen that the defect in the wording of the original order does not lead to the annulment of the order from the plaintiff.
56. As stated, the deviation from the Magistrate's Court's jurisdiction was expressed in the order that was directed at Tether. However, the Magistrate's Court did not think that we were dealing with an order that would obligate Tether to do or refrain from doing anything (see: paragraph 44 of the Magistrate's Court's decision).  The Applicant, in the length and breadth of the proceedings that took place - from the proceeding in the Magistrate's Court, to the hearing in the District Court, and ending with the hearing before me - did not argue that the order obligates Tether to freeze the digital wallet managed by it.  In any case, this order could not force anything on Tether , as it is a foreign company that is not subject to Israeli law.
57. Already in the hearing before the Magistrate's Court, the Applicant clarified that "she does not claim that the court order issued on May 20, 2025 [the freeze order]...  Binding Tether ...  and the basic concepts are that being a foreign corporation, it is not bound by the orders of the Israeli court" (paragraph 3 of the Applicant's response of November 23, 2025), but that "in fact, it grants authority and gives a binding order vis-à-vis the Israel Police and not towards Tether...  He does not have coercive power against society" (ibid., paragraph 5).  Later, in her position before the District Court, the Applicant reiterated these words by declaring that "I have conveyed the correct court comments and there is work on the design of the order, because the order itself, in its generic format, as it is constructed from a miraculous system of the Israel Police, gives the impression that there is a coercive order without extraterritorial authority...  That's not what the warrant does.  It is not for nothing that we have clarified that the order itself is directed at the police and receives authorization from the court" (see: Minutes of the hearing in the District Court of February 19, 2026, p.  4, paras.  18-22); and that "there is no doubt that the order itself is not the source of the authority that came and forced T[T] to come and carry out the act of freezing" (ibid., p.  5, S.  7-8).  The Applicant also argued this within the scope of the application for leave to appeal (see, inter alia: paragraphs 64 and 76 of the main arguments for the Applicant's application for leave to appeal).
58. Not only that. Tether also did not see the order as a binding decision.  This is because the Applicant clarified that the freezing of the funds in the wallet was carried out by the Company voluntarily, following the Applicant's request on May 19, 2025 - when only later did the Applicant send the formal order to Tether (paragraph 67 of the main arguments for the Applicant's request for leave to appeal).  The respondent was also aware of this, since, as he argued in the District Court, "[the] date on which the token was blocked was on May 19, 2025" - that is, before the order was issued - and that after the respondent contacted the company for the purpose of clarifying the matter, "the company's response was that it froze the assets of the appellant [the respondent - S.] following the request of the Cyber Department of the Israel Police" (paragraph 2 of the appeal of December 18, 2025, which was submitted on behalf of the respondent to the District Court).
59. From now on, the order issued by the Magistrate's Court was not the one that caused the freezing of the digital wallet, and Tether did not consider itself obligated to act on that order anyway. The freeze order was, in fact, directed at the Israel Police and declared its ability to act as it did in order to meet Tether's demand to present it with a formal reference from an Israeli court so that it could plan its steps and decide whether or not it wished to cooperate with the State of Israel.  Such a requirement, as part of Tether's policy, which was openly published on the company's website, is found in the contractual and proprietary relationship between each and every investor in Tether cryptocurrencies and Tether.  As noted, these relations are not the concern of the Israel Police.
60. In these circumstances, it is clear to me that it is possible and proper to order the correction of the defect that occurred in the wording of the original order in a manner that will enable the Applicant to request the Magistrate's Court to issue before it a new order that is properly drafted - in accordance with the updated wording presented to me - which will be addressed to the Israel Police, as opposed to a foreign company.

Conclusion

61. The Israel Police acted in accordance with Section 3 ofthe Police Ordinance when it created a voluntary cooperation with Tether, in the framework of which the company froze the digital wallet that the respondent claims belongs to it.
62. The flaw in the wording of the original freeze order did not cause any miscarriage of justice and does not impair the validity of the order against the Israel Police as a reference to its own actions. Therefore, the District Court should have allowed the Applicant to correct the defect in the Magistrate's Court in order to obtain from that court a new, properly drafted order, which is directed at the Israel Police and does not purport to impose any obligations on Tether or any other foreign entity.
63. The application for leave to appeal is therefore granted. I cancel the decision that is the subject of the application and return the hearing to the District Court in order to rule on the respondent's other arguments in the appeal filed by him.
64. Until the amended order is issued by the Magistrate's Court, the original freezing order, in its proper sense, will stand.

Granted today, May 19, 2026.