Reasoned findings on ownership, control and proceeds-of-crime nexus are essential before retaining frozen crypto and bank assets.

Retention of frozen bank funds, crypto assets and seized material under Section 17(4) requires specific, reasoned findings on the affected parties' role, ownership and control of the assets, third-party customer interests, and the nexus between the assets and alleged proceeds of crime. The notes state that explanations concerning cryptocurrency exchange operations, pool wallets and available information or control were not substantively addressed. The Adjudicating Authority must allow both sides to substantiate their claims and determine these material issues through a fresh reasoned assessment; without such findings, retention orders cannot be sustained.

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Issues: Whether the orders permitting retention of frozen bank funds, crypto assets and seized material under Section 17(4) could stand without specific findings on the appellants' role, ownership and control of the assets, and their nexus with alleged proceeds of crime.

Analysis: The retention orders did not substantively address the appellants' explanations that they operated cryptocurrency exchange platforms, the extent of information and control available to them, the ownership of assets held in pool wallets, the position of third-party customers, or the alleged connection between the frozen assets and proceeds of crime. The Adjudicating Authority was required to deal with these material questions and record specific, reasoned findings after allowing both sides to substantiate their claims.

Conclusion: The retention orders could not be sustained in the absence of reasoned findings on the material issues and required fresh determination by the Adjudicating Authority.

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