ONTARIO COURT OF JUSTICE

DATE: 2026 02 19

IN THE MATTER OF an Application for Extension of a Detention of Seized Items pursuant to s. 490(2) of the Criminal Code

Before Justice J.R. Lalande

Heard on February 18, 2026

Reasons for Judgment released on February 19, 2026

G. McInnis....................................................................................... counsel for the Applicant

T. Hicks........................................................................ counsel for the Respondent, Mr. Xu

Lalande J.:

Overview

[ 1 ] The Respondent is under investigation for financial offences, including possession and laundering proceeds of crime, as well as failure to register as a money service business under the Proceeds of crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). It is believed that the Respondent was operating a sophisticated cryptocurrency investment business in Ontario with ties to Taiwan.

[ 2 ] In mid-November 2025, the Respondent’s property was seized by police. Some was taken when he was arrested for an allegation of attempt murder and other property was seized during the execution of two subsequent warrants. Among other things, the seized property includes over $35,000 in cash, some 2.5 million in Matrix Layer Protocol cryptocurrency tokens (valued at approximately $1.7 million USD at the time of seizure), 11 cellular phones, 24 computer tablets and a large cache of financial documents. Most of the documents were found stacked in piles. There were approximately 23 piles. Each is four to six inches high. Much of the documentation is written in Cantonese or Mandarin and some appears to contain a significant number of seed phrases for cryptocurrency wallets and transactions. Based on a preliminary review of some of the cryptocurrency wallets and ledgers, the police believe that the operation involves hundreds of millions of dollars.

[ 3 ] The police have now held the Respondent’s property for three months and no charges have been laid. On behalf of the investigating agency, the Crown brings an application under section 490(2) (a). This application seeks to extend the detention of the seized materials for a further nine months. This would bring the cumulative detention of the property to one year – the maximum duration permitted by subsection 490(3) in the absence of proceedings being initiated, consent or as further permitted by a judge of the Superior Court under paragraph 490(3)(a).

[ 4 ] The Crown argues that extending the period of detention for the maximum term is necessary when considering the extensive work required to translate the evidence and to analyze it within the context of the large-scale investigation. The Crown also points out that further investigative steps will undoubtedly be required, such as tracing identifiable funds.

[ 5 ] Mr. Hicks, on behalf of the Respondent, agrees that the threshold for extending the detention has been met but submits that fairness concerns should be considered when determining the duration or terms of the extension. Here, it is argued, these concerns warrant imposing a tight timeline on the investigation in the range of 30 days. In support of his position, Mr. Hicks submits that this case is distinct from the precedents relied on by the Crown. In the defence argument, a key feature is that the original warrants in this matter are sealed, leaving the Respondent “in the dark”, such that he elected to not cross-examine the affiant assuming that many of his questions would not be answered.

The Law

[ 6 ] Although there is agreement that the detention should be extended and it is the duration that is at issue, it is helpful to review some of the legal principles involved in assessing an application to extend a detention order .

[ 7 ] Section 490(2) requires a justice to determine whether, having regard to the nature of the investigation, further detention of seized property is warranted for a specified period. The inquiry is a narrow one. While some consideration may be given to the conduct of the enquiry, the central focus is on the nature and needs of the ongoing investigation ( Tennina, 2008 ONCA 498 at para 5 ).

[ 8 ] The evaluation is not intended to encroach upon investigative or prosecutorial discretion but aims to balance the legitimate needs of ongoing investigations with the property rights of individuals by preventing undue delays in the detention of property through inaction or improper motive ( Tennina , at paras 5–6 , McNamara, 2006 OJ No 1194 (SCJ) at para 23 ). The law is clear that extraneous concerns relating to the investigation, or the reasonableness of police actions are of no import ( McNamara, at para 23). Likewise, considerations as to the pace or quality of investigative steps, as well as the manner of investigation, are beyond the jurisdiction of the application judge ( McNamara, at para 30, (Re) Application for Extension of a Detention of Seized Items Pursuant to s490(2) of the Criminal Code, 2021 ONCJ 691 at para 17 ).

Discussion

[ 9 ] To begin, I accept the evidence presented as part of the Crown application, which was unchallenged. It is clear in reviewing the application that the need for further time to examine the evidence seized during the investigation in November of 2025 is well-founded and the Respondent’s concession that some further time is warranted is a very reasonable one.

[ 10 ] However, having reflected on the positions advanced by the parties, I disagree with the Respondent’s suggestion to limit the period of detention to a further 30 days for the following three reasons.

[ 11 ] First, in my view, 30 days would be woefully insufficient to meet the needs of the investigation given the vast amount of information that is required to be translated and processed. With respect, imposing this timeframe based on the concerns articulated by the Respondent would have the effect of prioritizing extraneous factors at the expense of the central question set out in subsection 490(2) (a), being the nature of the investigation.

[ 12 ] Second, while the warrants and materials have been sealed and are not available to defence, there is no requirement that they be. As the Crown correctly pointed out, the right of disclosure does not crystallize until proceedings have been instituted. While section 490(1)(a) contemplates detention of things seized for any investigation, preliminary hearing, trial or other proceeding, by their very nature, applications under section 490(2) (a) focus exclusively on investigations. This is clear in the wording of the subsection and when considered alongside subsection 490(1)(b) which refers to the alternative scenario where proceedings have been instituted. In other words, these applications take place in the absence of any proceedings and therefore without a state disclosure obligation.

[ 13 ] Despite the absence of a disclosure obligation in relation to the investigation, the proceedings remain fair, in my view, as the application process itself requires that a sufficient degree of information be provided in advance of the hearing. Here, there were significant materials filed. They include a 108-page application record containing, among other things, various investigative reports and charts. The materials set out in detail the steps taken by the investigators in relation to the seized property.

[ 14 ] Third and finally, any investigation may or may not include typical applications for judicial authorization such as warrants or production orders. These applications may or may not be sealed depending on the nature of the investigation. While respondents in applications under subsection 490(2) (a) may, on occasion, have access to prior judicial authorizations where such authorizations were not sealed and accessible to the public, in my view, others are not entitled to recourse in the form of shortened detention periods to compensate for this lack of information. This would run afoul the central considerations in relation to the nature of the investigation and significantly overshoot the intended protection of property rights contemplated by the legislative scheme. Practically, it would amount to an inappropriate evaluation of the police conduct and disrupt investigations with the imposition of punishing timelines.

[ 15 ] Focusing on the investigation itself, I agree with the Crown that a further nine months is warranted in this matter. To be frank, when considering the scope of the investigation as it was presented, nine months may be an ambitious timeline. I base that conclusion on Ms. McInnes’ explanation that the police are faced with a vast amount of information in this matter. Much of the documentary evidence will need to be translated before it can be reviewed. As I set out earlier, once those documents are reviewed, as well as the data extracted from the dozens of devices and the various cryptocurrency seed phrases, the evidence will need to be assessed in the context of the overall investigation. Inevitably, further investigative steps, such as the tracing of funds, will be required.

[ 16 ] Finally, I appreciate that, in the absence of proceedings being initiated, granting an extension of nine months allows for the maximum period of detention contemplated under section 490(3). This is not a decision that I came to lightly. However, the reality is that investigations surrounding financial crimes are increasingly complicated and this case, which involves a large-scale international operation based on hundreds of millions of dollars’ worth of cryptocurrency, provides a good example. Without losing sight of the need to protect individual property rights, it strikes me that the one-size-fits-all timelines found in section 490 were legislated at a point in time when litigation of this nature and legislation such as the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (S.C. 2000, c. 17 ) did not yet exist. Likewise, the current legal landscape also imposes significant pressure to move a case forward in a timely manner from the date an information is sworn. When considered in this context, it makes good sense to me that, in complex matters such as this one, prosecutors and investigators thoroughly prepare their case during the pre-charge phase and do so with appropriate timelines. This allows the prosecution to fully assess the viability of their case and to ensure that, if proceedings are instituted, they proceed efficiently from the outset.

Conclusion

[ 17 ] The period of detention for all items will be extended for a further nine months as of the date of initial detention.

Released: February 19 2026

Signed: Justice J.R. Lalande