Case Closed on Over €7 Million in Allegedly Illicit Funds

February 18, 2025

On February 17, 2025, the Economic Affairs Court made a decision to close proceedings regarding criminally obtained assets in relation to a WIDEN client.

The WIDEN client had earned income by creating and selling NFT artwork. These artworks were sold in cryptocurrency, which was later exchanged for euros and transferred to a Latvian financial institution. Due to this, a criminal investigation was initiated, leading to the seizure of funds exceeding €7 million. Subsequently, a separate proceeding of proceeds of crime was initiated.

In its ruling, the court stated that without a thorough investigation, it could not assess the origin of the NFT artworks, as this would require an analysis of the objective elements of a criminal offense—an issue beyond the scope of the current proceeding.

The court also referred to precedents established in other cases:
“In legal practice concerning procedure of proceeds of crime, it has been confirmed that the objective elements of the criminal offense outlined in Article 195 of the Criminal Law cannot be established within such proceedings. Consequently, they cannot serve as grounds for recognizing seized financial assets as illicit (Riga Regional Court, January 20, 2022, Decision No. KA04-0235-22/23; March 31, 2022, Decision No. KA04-0386-22/23). Moreover, a court does not assess a person’s culpability under Chapter 59 of the Criminal Procedure Law. Therefore, it also cannot evaluate the argument that an individual is likely laundering another person’s illicitly acquired financial assets, as this pertains to the objective elements of the criminal offense outlined in Article 195, Section 3 of the Criminal Law (Riga Regional Court, February 6, 2023, Decision No. KA04-185-23/8).”

From this, it follows that legal precedent is solidifying around the view that proceedings of proceeds of crime cannot be based on Article 195 of the Criminal Law—that is, the criminal offense underlying the origin of funds being money laundering. If the origin of the funds is alleged to be money laundering, then it must be investigated in the main criminal case, rather than in a separate proceeding of proceeds of crime.