The High Court has granted the Criminal Assets Bureau’s application for an order over 2,013.96 Ether found in Neil Mannion’s cryptocurrency wallet, concluding that the Ether was likely bought with Bitcoin connected to criminal activity and that his evidence did not rebut the Bureau’s case.
The judgment, delivered by Ms Justice Stewart on 17 December 2018, concerns the Bureau’s second set of proceeds of crime proceedings against Mannion. The Ether was worth about €24,852 on 28 July 2016, when the Bureau sought the order. The court ordered the relief sought in respect of the Ether. It did not make a finding that the Bureau had breached Mannion’s rights: Justice Stewart held that the seizure and review did not breach his constitutional or legal rights.
Mannion had been convicted of drug offences and sentenced to six and a half years in December 2015; his sentence was upheld on appeal. In the earlier Bureau proceedings, a consent order was made over various assets, including Bitcoin. The Ether was not included. The judgment records that it had been purchased with Bitcoin in August 2014, when Ethereum had no established market. After Ethereum began trading, a Bureau analyst noticed the wallet during a later review and transferred the Ether to a wallet controlled by the Bureau.
Mannion argued that the earlier settlement had resolved his obligations to the Bureau and challenged the State’s access to his computer after the first proceedings. He maintained that the Ether had been bought with legitimately obtained Bitcoin and that the review interfered with his privacy. The Bureau argued that the Ether derived from criminal proceeds and that the review was lawful.
Justice Stewart found that the earlier consent order did not discharge any liability to the Bureau, which she described as a statutory body seeking to establish whether assets fell within its remit. She found the Ether had not been marketable before Ethereum began trading, but that an established market existed by the time of the earlier consent order. The failure to include the Ether in that case was an oversight, not bad faith or improper conduct, she held.
The court found that criminal and appellate proceedings were still ongoing when the Bureau reviewed the computer material in May 2016. It also concluded that the review took place within a reasonable period and did not breach Mannion’s privacy rights. Applying the approach in the Supreme Court’s decision in CAB v Murphy, Justice Stewart treated the Ether as the subject of the application, rather than evidence subject to the exclusionary rule in DPP v JC.
The Bureau had established a prima facie case that the Ether was connected to criminal proceeds, shifting the burden to Mannion. The judge cited his admission that there had been some cross-contamination between funds and found no substantial, reliable evidence to show the Ether came from legitimate funds. The Bureau’s application was therefore granted.