Confiscation can take place without a criminal conviction

Malta’s asset recovery law allows confiscation by the courts even without a criminal conviction if the suspect is unreachable and the assets are demonstrated to originate from criminal activity.

This was reiterated in a judgment handed down by Judge Giovanni Grixti in the case Chairperson of the Asset Recovery Bureau & Commissioner of Police vs Binance account with user ID 35650310, delivered on 8 July 2025.

A person reported to St Julian’s police station that they were defrauded through a cryptocurrency investment scam. The victim made a couple of small investments and received quick profits, which led to to larger investments being made.

Following this, the victim lost a significant sum of money when the website demanded additional deposits under false pretences.

Investigations led by the police in Malta, confirmed the site had all the hallmarks of a scam.

The police traced some of the fraudulent transactions on the Bitcoin blockchain to a Binance wallet. Following this report, Binance froze the account in July 2022, noting suspicious activity and confirming the wallet held €8,835 worth of virtual assets.

The suspect account holder, Sulaiman Bolaji Ayoola, contacted both Binance and the Maltese Police Force, claiming to be an innocent crypto trader. Despite this and also presenting screenshots, it was deemed that Ayoola failed to provide credible or verifiable information to prove that he is an innocent crypto trader.

This case was eventually brought forward under Article 43 of the Proceeds of Crime Act (Chapter 621 of the Laws of Malta). This allows the State to recover property that is suspected to be the proceeds of crime without needing a criminal conviction, provided certain legal conditions are met.

The court first acknowledged that such action is in rem, meaning it is directed against the property itself, not the person. It was directed specifically, against the Binance account and all virtual currencies contained in it.

The court emphasised that this type of action does not require a prior criminal conviction, and is instead designed to recover assets in situations where prosecution is not feasible, such as when the suspect is abroad or uncooperative.

The law empowers the Attorney General to initiate non-conviction-based confiscation proceedings when it is not appropriate or not possible to obtain a conviction. This can occur in three circumstances: The suspect is outside Malta or on the run; the suspect is deceased; and the suspect dies before criminal proceedings conclude.

In this case, the suspect, Sulaiman Bolaji Ayoola, was not in Malta and resided in Nigeria. Despite attempts by the Maltese authorities to cooperate via letters, no response was received from Nigerian authorities. This and other factors meant that prosecution in Malta was not feasible. This led the Attorney General to trigger the legal grounds for non-conviction-based confiscation.

In order for such action to succeed, the court highlighted two main conditions authorities must satisfy: The property was acquired through criminal activity;  the property meets the definition of “proceeds of crime”.

In its judgment the court found that the Binance wallet had received cryptocurrency obtained via a fraudulent investment scheme, which satisfies the first requirement. Furthermore, the methods of acquisition, transfer and retention of the funds matched the indicators of money laundering as defined under Chapter 373 of the Laws of Malta.

Moreover, as previously stated, the suspect also provided no credible explanation or evidence of legitimate ownership or business activity.

The court therefore was satisfied that the virtual funds were proceeds of fraud and money laundering, which qualifies them as confiscable assets under Article 43(2)(b) of Chapter 621.

Although no defendant appeared to contest the action, the court carefully examined the evidence to avoid confiscating property that may have been lawfully acquired.

The court also affirmed that the burden of proof lies on the State, even in non-conviction-based proceedings. This burden according to the courts had been adequately proven. The suspect’s failure to explain the source of the funds, and the suspicious structure of the transactions, supported the inference that the funds were proceeds of crime.

Therefore, with all this in mind, the court ruled that the Binance account and all virtual currencies within it, constitute property subject to confiscation under Article 43(2)(b) of Chapter 621. Furthermore, it ordered that the account and its contents shall be transferred to the Government of Malta and also imposed legal costs against the virtual account.